Liontrust Responsible Capitalism Report 2024 - Flipbook - Page 31
RESPONSIBLE CAPITALISM AND LIONTRUST’S
WORK WITH SUPPLIERS
LIONTRUST’S SUPPLIERS AND PROVIDERS
In carrying out its function as an asset manager, Liontrust works
with a number of suppliers. Liontrust’s suppliers include ESG data
providers, trading platforms, research providers for investment
related information, proxy voting platforms, back office service
providers, and others. This section focuses on the relationship
Liontrust has with its most significant service providers in terms of
oversight and management of these contracts and the quality of the
service the suppliers provide.
Liontrust’s suppliers
Liontrust uses a wide variety of suppliers for back-office functions,
audit, legal, marketing services, and for investment research, data,
analysis and benchmarking. In terms of service providers for ESG
related data and proxy voting services, the group uses MSCI and
ISS, respectively.
How Liontrust works with its suppliers
Liontrust maintains a counterparty and selection process to govern
how it manages its relationship with each supplier. There is a risk
categorised approach to managing a counterparty, with more
significant relationships receiving more oversight. For example, our
banks are subject to a credit review on an at least monthly basis
and are integrated into our operational resilience planning.
The Group has set up the Operations and Outsource Oversight
committee to formally oversee the relationship with our outsourced
providers; the committee meets monthly. Our relationships with
other suppliers are managed by the relevant department but
always subject to requisite compliance legal and risk oversight.
The designated individual keeps in close contact with each supplier
and monitors and assesses the cost, timeliness and quality of
the service providers’ work, and feeds back to the supplier on
its performance. In most cases, the supplier (on their side) has a
relationship manager who oversees their relationship with Liontrust.
Engagement is generally undertaken with this person first and
escalated if needed.
As part of the selection process, the group expects to engage with
at least three potential suppliers and undertakes due diligence to
ensure that Liontrust receives what it needs and has contracted for
from each supplier, and appropriate controls are in place including
anti-bribery and slavery policies.
Inevitably, there are times when service providers don’t meet
Liontrust’s expectations in terms of their work. If these instances
happen repeatedly, Liontrust engages with the supplier to understand
what the issues are, if solutions can be found, and what the Group
can expect from the supplier going forward.
Liontrust has a procurement policy and process.
Communicating clearly with suppliers
Liontrust communicates regularly and clearly with its suppliers,
including those that provide ESG data, to ensure that the suppliers
understand what and how the data the suppliers provide is used by
Liontrust. This communication takes place during regular catch ups,
if and when problems arise, and during annual meetings. Liontrust
makes specific requests of its suppliers that provide ESG data – in
terms of breadth, scope, accuracy, and data storage – to enable
the Group to fulfil the ESG data needs of its investment teams.
Examples of engagements that Liontrust undertook with ESG-related suppliers in 2022
MSCI ESG Manager
Liontrust uses MSCI for a range of services, including licencing
for benchmarking and for the provision of ESG-related data and
information through the MSCI ESG Manager.
During 2022, Liontrust engaged with MSCI (ESG Manager)
services to discuss:
• MSCI’s customer service/customer support
• IT issues with the platform and with running reports
• Cost/value of the service MSCI ESG Manager provides
• Promptness of resolution of company controversies
• Data quality
Liontrust’s Responsible Capitalism team engaged MSCI ESG
Manager on a number of occasions in 2022 to request
clarification, ask for improved client servicing, ask for information
regarding data points, and to inform MSCI of incorrect data
points and IT problems with its online platform and systems. In
these instances, Liontrust contacted the client servicing team with
a query or concern.
On some of these occasions, MSCI rectified incorrect data
points, clarified its processes, and/or worked to get systems
back online. In other instances, Liontrust was less satisfied with
the service MSCI provided as the Group received no response,
a delayed response, or an unhelpful response. Liontrust escalated
engagement with MSCI on a number of occasions by going to its
relationship manager at MSCI. In response, MSCI acknowledged
that it did not always meet expectations. Liontrust will continue to
engage and encourage MSCI to service clients more effectively
in 2023.
• User friendliness of the systems
Responsible Capitalism Report 2022 - 31