Liontrust Sustainable Future Funds - Annual Review 2017 - Page 29



E
ngagement is integral to how we ensure our
focus on high-quality companies: engaging with
companies on key ESG issues gives us greater
insight and helps us to identify leading businesses.
We have been engaging in this way for more than 17
years and have found this approach challenges and
encourages companies to manage the wider aspects of
their business proactively, which, in turn, protects their
longer-term prospects.
We meet companies face to face and correspond
through emails, telephone calls and letters. We interact
with a range of representatives, which might include the
Chairman or senior management and often also extends
to experts heading up sustainability strategy or other
core roles within an organisation. Ultimately, who we
engage with depends on the specific issue.
Engagement highlights in 2017
••In March, we wrote letters to 58 companies held
across our equity funds where we had withheld support
for proposals at the company’s AGM in 2016. Aside
from company-specific issues, there were three broad
areas where we withheld support: where there was
a lack of gender diversity, where we disapproved of
a company’s remuneration report or policy, or where
we felt there was an issue relating to the auditor. We
wrote to both the Chairman and investor relations for
each company, providing our voting rationale along
with a copy of our voting policy.
••Following the Grenfell Tower fire in June, we
conducted research and engaged with companies
in the portfolios that were potentially directly and
indirectly affected to ensure that they were taking
action to prevent future fire risks.
••We engaged with healthcare companies held in our
equity funds, looking specifically at how they attract and
retain talent, how they manage drug trials and the need
to balance patient safety and timeliness of results. We
also enquired about issues such as the EU adverse events
regulation, animal welfare standards and sales practices.
••We met with WWF’s Global Forest & Trade Network
to improve both the sustainability of timber sourcing by
Number of holdings
Number of meetings
a company held within our funds and also to improve
its public disclosure of policies and performance on
timber sourcing.
••Another key area of discussion with companies
was energy efficiency: we engaged with several
companies across the portfolios on this and in most
cases wanted more detail about their plans and
performance in this area.
••For our financial holdings, we asked questions
relating to customer satisfaction and how companies
mitigate the risks of mis-selling.
••We also began to discuss preparedness ahead of
the EU’s General Data Protection Regulation (GDPR)
regulations that come into force in May 2018.
••We collaborated with other investors on cybersecurity through our participation in the Principles for
Responsible Investment (PRI) engagement group as
well as directly engaging with companies on this issue.
••We continued to engage with investee companies
on corporate tax responsibility and collaborated
with other investors through the PRI group on corporate
tax disclosure.
2016
2017
Equity holdings
181
154
Fixed income issuers
101
88
Total
282
242
Total
243
226
-
69%
131
210
% of investee companies
Engagement
28 Liontrust Sustainable Future Funds: Annual Review 2017
ESG issues raised (meetings & direct correspondence)
Liontrust Sustainable Future Funds: Annual Review 2017 29





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