Liontrust Responsible Capitalism Report 2024 - Flipbook - Page 128
RESPONSIBLE CAPITALISM – REVIEW AND ASSURANCE
OVERSIGHT AND ACCOUNTABILITY
Liontrust’s Responsible Capitalism and stewardship-related practices
are overseen by the Group’s Board, executive directors and its
Responsible Capitalism Committee. Liontrust’s Compliance, Risk,
and Legal teams provide oversight and act as second lines of
defence for the Responsible Capitalism team, which carries out the
Group’s ESG, sustainability, and stewardship work for the PLC and
which helps Liontrust’s investment teams report on ESG.
APPOINTMENT OF LIONTRUST INTERNAL AUDITORS
In Q4 2021, Liontrust appointed Grant Thornton as third party,
external auditors to undertake a four-year plan of audits across
Group departments. Audits began in August 2022, focusing on the
Responsible Capitalism team and on the Group’s culture. Preliminary
reports on these first audits were provided to senior management in
Q1 23. Since then, Grant Thornton has followed up and continued
to monitor points raised in its initial review to ensure that actions are
taken to make the Group’s internal processes as robust as possible.
AUDIT OF RESPONSIBLE CAPITALISM
In August 2022, Liontrust undertook an internal audit, led by Grant
Thornton, on its Responsible Capitalism team, which has undergone
considerable change since April 2022. The internal audit was
undertaken to ensure, among other things, that correct oversight
is in place for Responsible Capitalism; that the team is effectively
working to evidence Group statements on ESG integration; that
ESG, sustainability and stewardship-related policies are robust and
reflect what the Group is doing and says it does; and that the team
is sufficiently resourced for its purpose. The Responsible Capitalism
team, along with other Group departments, continues to work with
the internal auditor to help facilitate the review and implement any
actions necessary. The audit will continue over the next few years to
ensure effectiveness of systems and governance structures.
AUDIT OF LIONTRUST’S KEY ESG METRICS
Liontrust engaged KPMG LLP to perform independent limited
assurance over certain metrics of its gender diversity, proxy voting
and GHG Scope 1 and 2 information for the calendar year 2023 (a
similar review was done and reported on for calendar year 2022).
Specific metrics in scope for limited assurance are detailed in the
KPMG Limited Assurance report on page 132. The Delta symbol
used in this report denotes the specific metrics that were assured.
COMPLIANCE AND SIGN-OFF
For all client, investor and stakeholder communications, Liontrust
has a sign-off process through its Compliance and/or Legal teams.
These processes are followed for all information that the Responsible
Capitalism team produces for external consumption to ensure that
information is correct, that reporting standards are met, and the
correct compliance procedures are followed.
128 - Responsible Capitalism Report 2023
INTERNAL ANNUAL REVIEW OF MATERIALS
In the first quarter each year, the Responsible Capitalism team
undertakes a review of its proxy voting guidelines and related
policies. Updates to these were made in 2023 (and in 2022, as
reported in last year’s Responsible Capitalism report.) All updates
and changes are approved by the Responsible Capitalism
Committee and are seen by the Board members who attend the
Responsible Capitalism Committee meetings – namely, the Chair
and the Board member with oversight for Responsible Capitalism.
Other Board members attend the Committee meetings as they
see fit.
RATIONALE FOR THIS APPROACH
Liontrust has internal compliance and sign-off to ensure adherence
to required regulations and laws regarding marketing and
providing information to clients, investors and wider stakeholders.
The Group believes these processes and systems effectively
monitor and ensure adherence to requirements. Liontrust employed
the help of external auditors to ensure that its internal systems are
functioning well and to understand how the Group can improve
these, if at all, going forward.
EXTERNAL REPORTING ON RESPONSIBLE
CAPITALISM-RELATED ACTIVITIES
Liontrust reports in a number of ways during the year on its
Responsible Capitalism activities, which cover ESG, sustainability,
and stewardship. A description of the reports that Liontrust produces
for clients on these areas can be found in the section on Clients in
this report.
ENSURING FAIR, BALANCED, AND
UNDERSTANDABLE REPORTING
Liontrust makes every effort to ensure that its reporting, factsheets,
marketing materials, and communications with clients, investors
and stakeholders are accurate. The Group aims to communicate
in language that is clear, relevant, engaging and useful. Liontrust
undertakes internal and external audits, research and tests
communications to understand what is effective and is well received
by clients and investors.
IMPROVING STEWARDSHIP
Continual oversight and review of Liontrust’s Responsible Capitalism
activities and reporting help ensure the Group integrates ESG
considerations in its investment processes (where applicable),
engages with holdings (as per each team’s investment process),
votes its proxies (as required), and communicates clearly on each
step of its processes. Both internal and external audits ensure the
Group is aware of any Responsible Capitalism or stewardshiprelated areas that could improve and serve to give the Group
assurance that it is utilising best practice across these areas.