Liontrust engagement and voting report 2021 - Flipbook - Page 5
Governance Framework
The Chief Executive is formally responsible for ESG and Sustainability
throughout Liontrust. The Board regularly discusses ESG matters,
including the climate crisis and diversity, and addresses specific issues
if they arise.
The Board is responsible for Liontrust’s corporate obligations,
including as a United Nations Principles for Responsible Investment
(‘UN PRI’) signatory and the various other commitments we have
made on ESG issues, such as the Taskforce on Climate-related
Financial Disclosures (‘TCFD’).
The Portfolio Risk Committee is driving the integration of ESG
investment risk into the day to day monitoring processes of Liontrust’s
funds. The Risk team is integrating climate models into the capital
stress-testing processes used by the Board.
In 2020, Liontrust established a Sustainability and Stewardship
Committee (SSC), a subcommittee of the Management Committee
supported by the Sustainability and Stewardship Working Group,
to drive the adoption of sustainability throughout the business,
support the company in overseeing and monitoring policies and
procedures and address any issues as they arise. The SSC also
approves the engagement strategy, changes to Liontrust’s custom
voting framework and decisions to sign up to any sustainability
initiatives or campaigns.
Voting and engagement go hand in hand. Voting can act as an
escalation tool in cases where we believe that a company has
failed to give a satisfactory response to a given issue. We have
had success in following up on our voting to ensure our investee
companies understand our rationale for voting in a certain way.
For example, with Hilton Food Group we voted against the Chair
because of a failure to reach 33% females on its board of directors.
The individual was also considered over-tenured by the UK
Corporate Governance Code. Institutional Shareholder Services,
Liontrust’s proxy voting provider, recommended a vote against on
that basis. It was essential to engage with the company for it to
understand the reason for our vote and that we supported the Chair
continuing in his role due to the size of his holding in the company
(as aligned to the Economic Advantage team process). But we
wanted to see improvement in the gender diversity of the board
(see the voting section for more detail on this vote).
The ESG Regulation Working Group was also established in 2020
to ensure our applicable funds were best placed to comply with the
Sustainable Finance Disclosure Regulation (‘SFDR’), Autorité des Marchés
Financiers (AMF) Disclosures and other regulatory requirements.
This Report is designed to provide our clients and other stakeholders
with an insight into our approach and commitment to engagement
and voting – with a focus on outcomes. We hope you find it useful
in understanding Liontrust’s approach to these important issues.
Emma Howard Boyd has been appointed a Non-Executive Director
of Liontrust Asset Management Plc and she has extensive ESG
knowledge and expertise. Emma’s insights in this area help align
the firm’s sustainability strategy with best practices. Day to day
accountability for sustainability lies with the Management Committee.
Liontrust: Engagement and Voting Report 2021 - 5