Liontrust Responsible Capitalism Report 2024 - Flipbook - Page 47
Engagements on other ESG-related areas
The team also engaged holdings on other ESG-related risks and opportunities. Examples of these include:
Company
What the
Group does
Date
Discussion topic
Discussion points
Crest Nicholson
Holdings
British house
building Group
January 2022
Cladding
The team met the CEO and CFO to discuss the ongoing cladding crisis.
Crest is remediating buildings with faulty workmanship or those that do not
comply with fire safety standards, having provisioned £42 million for this.
Crest also pays the Residential Property Developer Tax (RDPT), a 4% tax
aimed at remediating all buildings (as necessary) above 18 metres. The
Group is resistant to demands to add a third layer of expense to deal with
buildings that were compliant and are only now being deemed to fall foul of
regulation from the Royal Institution of Chartered Surveyors (RICS) building
surveys, fire inspectors, insurers or lenders.
Evotec
German drug
discovery and
development
company
March 2022
Employee
turnover
The team engaged Evotec on employee turnover. Evotec is a people
company; automation cannot take the place of the human functionality
the Group needs to continue its research. Evotec experienced higher staff
turnover in 2021 but does not expect this to continue. Turnover remains
less than at competitors. Salary increases, bonuses and stock incentives in
themost competitive geographical areas of its business (eastern and western
parts of the US) should help keep turnover at normal levels.
Cadence Design
Systems
American
computation
software
company
November
2022
Diversity and
reporting
The team met with Cadence’s independent Board member to discuss
a variety of topics including Board independence, Board diversity,
sustainability reporting and impact reporting. The Board of Cadence is
committed to improving its sustainability credentials and overall corporate
governance. The Group has committed to releasing metrics around energy
savings related to its software’s involvement in data centres. It has also
committed to 30% female representation on the Board.
Puma
German sporting August and
goods company November
2022
Links to Xingjian
region through
cotton supply
chain
The team met the CEO and Investor Relations to discuss the accusations of
Xingjian cotton being traced in some of the Group’s garments. The company
has repeatedly stated that it does not source from the region, and as part of
the Better Cotton Initiative condemned Human Rights abuse of Uighur people
in China. In a follow up meeting, the team engaged with the Group on the
laboratory testing that it carried out on the back of the accusations. While
the testing results were not conclusive, the Group explained that it is carrying
out ongoing testing and reaffirmed its efforts not to source from this region.
Global Compact-related controversies
Below is a list of some of the corporates held by the team that have been flagged by MSCI as failing or being on the watch list for
controversies against the Global Compact:
Company
Description of status
Engagement and conclusions
Alphabet
On the watchlist due to alleged pay and hiring discrimination
against female employees.
In September 2022, the team contacted the company to request
that it participate in the 2022 Workforce Disclosure Initiative
(WDI) Survey. The WDI aims to improve corporate transparency
and accountability on workforce issues.
Controversial weapons policy
The Sustainable Investment team excludes companies with any
confirmed involvement in “controversial weapons”, which are defined
as anti-personnel mines, cluster munitions, biological weapons or
nuclear weapons. This includes manufacturing or supplying key
components used in or the selling of controversial weapons. This
approach goes beyond the Group’s policy in this area.
The Sustainable Investment team publish further information in its
annual report available on our website: https://www.liontrust.
co.uk/fund-managers/sustainable-investment
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