Liontrust Sustainable Investment Annual Review 2022 - Flipbook - Page 41
Preserving and restoring nature
‘More than half of the world’s economic output – $44 trillion of
economic value generation – is moderately or highly dependent on
nature. Nature loss therefore represents significant risk to corporate
and financial stability.’ – Taskforce for Nature-related Financial
Disclosures (TNFD)
Objective: We will engage with investee companies to encourage
better information and reporting of natural capital impacts from their
activities, products and services, as well as policies and programmes
that preserve and restore nature and promote biodiversity. We will
also engage to understand better companies’ dependencies on
natural capital and how this might impact financial returns.
In 2023 we will:
• Explore and decide on collaborative initiatives related to nature
and biodiversity
• Use external tools and data to better assess nature-related risks
within our portfolios
• Select high-impact companies to target, including water companies
• Look to sign up to the Biodiversity Pledge
Ensuring worker well-being
How companies manage and look after their workforce through
direct operations, and workers further down their supply chains, can
directly affect overall business performance and corporate reputation.
Objective: 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. When it comes to encourage greater corporate diversity,
we look at gender and ethnic balance at a board level, senior
positions and within the workforce, as well as looking at efforts to
increase transparency and reduce pay gaps.
In 2023 we will:
• Look for data gaps and promote best practice on workforce
disclosure
• Encourage a target list of investee companies to disclose data for
the 2023 Workforce Disclosure Initiative (WDI)
• Continue to engage and/or use voting rights to encourage greater
board diversity where it is lacking.
Encouraging the transition to sustainable investment
To date, savings and investments have typically been geared
towards traditional investments that do not necessarily incorporate
ESG. However, as demand for sustainable and ESG-integrated
investments grows, and regulations to better classify what constitutes
‘sustainable’ investment follow suit, companies should play their part
to promote it to further accelerate the transition needed for a more
sustainable economy. Insurance companies have large investment
portfolios and as such their responsible investment policies can
have a large impact on the world from an environmental and social
perspective. So too can their responsible underwriting practices,
especially for more controversial areas of the economy.
In 2023 we will:
• Encourage further adoption of sustainable funds on financial
platforms
• Continue to push for comprehensive responsible investment
policies for insurance holdings
• Engage with insurance holdings on their underwriting policies
and practices for controversial areas of the economy and how
these are likely to evolve.
Objective: We will focus on determining which companies are
leading the way and which need to do more.
Liontrust Sustainable Investment: Annual Review 2022 - 41