Liontrust Sustainable Future Funds - Annual Review 2019 - Page 31



Our approach to engagement and voting
Engagement is integral to how we ensure we invest in high-quality
companies. Engaging with companies on key ESG issues gives us
greater insight, helps us to identify leading companies and is used
as a lever to encourage better business practices.
Our team has been engaging in this way for two decades, and we
have found this approach challenges and encourages companies
to proactively manage the wider aspects of their business, which, in
turn, protects their longer-term prospects.
Engagement is a resource-intensive process and our team conducts
sustainability research alongside traditional financial and business
fundamental analysis. This approach enables us to better target
engagement on material issues and integrate this into our financial
assessment of a company, maximising the information advantage
that engagement can bring to analysis.
Our team also conducts considered annual voting for companies
held in the portfolios, and we are very active owners. Our voting
policy is publicly available and our voting decisions and rationale
are also disclosed.
In 2019, we met with 185 companies face to face (of 247 holdings
across the funds) and raised 245 key ESG issues over the year, either
in direct meetings or through other forms of correspondence such as
letters and emails.
Examples include
Number of times issue raised with companies
2019
2018
2017
2016
Environmental
Climate crisis, water management
29 - 12%
18 - 8%
24 - 13%
28 - 21%
Social
Supply chains, employee issues
74 - 30%
38 - 17%
29 - 16%
50 - 38%
Governance issues
ESG and impact disclosure, corporate tax
73 - 30%
84 - 37%
41 - 22%
41 - 31%
Corporate Governance
Remuneration, auditors, diversity
69 - 28%
86 - 38%
93 - 50%
12 - 9%
245
226
187
131
Number of ESG issues raised
Priority engagement initiative versus reactive engagement (2019)
Impact/SDG (including climate crisis,
sustainable plastics)
Priority initiatives
Anti-bribery & corruption
Diversity
112
46%
133
54%
Workforce well-being
Transition to sustainable investment
Reactive engagement
Controversies, ESG impacts,
supply chains, tax
We met with
185
companies face to face
30 - Liontrust Sustainable Investment: Annual Review 2019
We raised
245
Key ESG issues
Liontrust Sustainable Investment: Annual Review 2019 - 31

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