Liontrust Sustainable Future Funds - Annual Review 2019 - Page 33



2019 priority engagement initiatives
Priority Initiative
SDG
Impact and Sustainable
Development Goals
Multiple SDGs including Goal 12:
Responsible Consumption and Production
Our approach
Target outcome
Highlights
SUCCESS
We continue to prioritise our efforts to quantify the main
impacts (good and bad) from the companies in which
we invest. We will engage with companies to disclose
their main impacts so we can report on these. This is an
evolving field and we are keen to build on the work we
have already done in this area. This includes engaging
with companies on the climate crisis to ensure strategy
is linked to reducing absolute greenhouse gas (GHG)
emissions.
Collaborate with other investors to look at
best practice on corporate disclosure on
impact and SDGs.
• Appraised several external research providers for impact metrics and
data for the funds.
Direct engagement with holdings on
improving disclosure of impact metrics and
what SDG targets the company is aiming
to contribute towards.
• We engaged with 44 companies to better understand their approach
on impact/SDG disclosure.
SUCCESS
• Engaged with 17 companies on the climate crisis to ensure they have
strategies in place to reduce absolute carbon emissions at a rate
consistent with limiting global warming to 1.5 degrees.
Encouraging sustainable
use of plastics
Goal 12: Responsible Consumption and
Production
We are looking for companies providing solutions to plastic
pollution as potential investments as well as encouraging
companies to reduce the amount of single use plastics they
introduce to the environment.
Encourage companies to adopt strategies
to reduce plastic pollution.
• We engaged with four companies on their plastic pollution strategies.
Although we see general progress in their approach, we do not feel that
our engagement has materially contributed to overall plastic pollution
reduction and will therefore continue to engage.
PARTIAL
SUCCESS
Anti-Bribery and
corruption
Goal 16: Peace, Justice & Strong Institutions
(Target 16.4 and 16.6)
Corruption is bad for people and ultimately bad for
business. We want to better understand how companies
can reduce the chances of being complicit in corruption
and encourage them to manage potential conflicts to the
best of their ability as ideas for how best to do this continue
to evolve.
Assess portfolios for companies with
weak policies or systems on bribery and
corruption and engage to improve.
• We engaged with two companies on the systemic risks of money
laundering in the financials sector and are now more confident in their
ability to mitigate the risks associated with bribery and corruption.
ONGOING
Worker Well-being
Increased corporate
diversity
Goal 8: Decent Work and Economic Growth
Goal 5: Gender Equality
• We are more confident in our holdings’ ability to mitigate risks stemming
from bribery and corruption.
• We were unable to set up a planned collaborative project with a
leading NGO.
How companies manage the human capital of their
direct operations, as well as workers further down
supply chains, can affect their long-term success. We will
engage to encourage companies to offer decent work
and pay living wages and to ensure they mitigate risks,
protect workers’ rights and maximise the opportunities to
support employees. We will also encourage companies
to use their influence to drive forward best practice further
down their supply chains.
Engage with companies on how they
manage human capital and encourage
best practice and worker-related KPIs.
• We engaged directly with 27 companies on supply chains and
employee-related issues.
SUCCESS
Maintain relationships with NGOs and
keep up to date with initiatives in the sector,
including signing up to the Workforce
Disclosure Initiative and encouraging
companies to disclose data on employees
and workers in the supply chain.
• We signed up to the Workforce Disclosure Initiative (WDI) and ensured
this was not just our team but Liontrust Asset Management Plc.
SUCCESS
We believe companies that are more diverse are better
able to prosper over the long term so we are engaging to
encourage greater diversity, looking at gender balance at
a board level and senior positions, and looking at efforts
to reduce any gender pay gaps.
Look at new ways to encourage companies
to improve gender and ethnicity profile of
boards and senior management.
• Stepped up voting to target the re-election of the Chair of the Nomination
Committee where gender diversity on the board is less than 30%.
Engage and vote where diversity is lacking.
Encouraging the transition
to sustainable investment
Goal 8: Decent Work and Economic Growth
32 - Liontrust Sustainable Investment: Annual Review 2019
NOT MET
Collaborate with an NGO on an initiative
related to financial services bribery and
corruption.
Individuals are having to take responsibility for their longterm finances, and adequate savings and pension provision
is critical. To date, the majority of saving has been into nonsustainable funds but as demand for sustainable investment
grows, companies should do all they can to promote it.
We will focus on determining which are leading the way
and which need to do more.
To better understand the responsible
investment policies of insurance and
investment companies held in the funds,
and ensure they are stepping up efforts to
become more responsible with regards to
unsustainable activities such as investing in
fossil fuel projects.
• We will engage with companies where we feel there are either
industry-related risks or company-related concerns or controversies.
• We requested that 15 holdings disclose data to the initiative.
• One company confirmed it would sign up, and we continue to engage
with those that did not sign up in 2019.
SUCCESS
• Gathered data to review the progress over the last four years of targeted
voting and engagement on board gender diversity (2016-19).
• Over this time, 36 companies in the funds increased board gender
diversity. We were able to support 21 companies where board gender
diversity was previously less than 30%. These companies had an
average of just 22% female boards but now have an average of 38%.
• We engaged with six insurance companies on their responsible
investment policies and have a better understanding of how they
implement them.
SUCCESS
Liontrust Sustainable Investment: Annual Review 2019 - 33

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