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Triodos Investment Management B.V.

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement » Outputs and outcomes

Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort

11.1. Indicate the amount of your listed equities portfolio with which your organisation engaged during the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion (to the nearest 5%)
Specify the basis on which this percentage is calculated

Individual / Internal staff engagements

213 Number of companies engaged
90 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Collaborative engagements

145
10 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. Indicate the proportion of engagements that involved multiple, substantive and detailed discussions or interactions with a company during the reporting year relating to ESG issue.

Type of engagement

% Comprehensive engagements

 

 

Individual / Internal staff engagements

 

 

Collaborative engagements

11.3. Indicate the percentage of your collaborative engagements for which you were a leading organisation during the reporting year.

Type of engagement

% Leading role

 

 

Collaborative engagements

11.5. Additional information. [Optional]

In our collaborative engagement efforts we focus on companies that are selected for investment by Triodos, although some collaborative engagements go beyond these.


LEA 12. Engagement methods

12.1. Indicate which of the following your engagement involved.

          Public policy engagement
        

12.2. Additional information. [Optional]


LEA 13. Engagements on E, S and/or G issues (Not Applicable)


LEA 14. Companies changing practices / behaviour following engagement

14.1. Indicate whether you track the number of cases during the reporting year where a company changed its practices, or made a formal commitment to do so, following your organisation’s and/or your service provider's engagement activities.

14.2. Indicate the number of companies that changed or committed to change in the reporting year following your organisation’s and/or your service provider's engagement activities.

Number of company changes or commitments to change

Individual / Internal staff engagements

16

Collaborative engagements

2

14.3. Additional information [Optional].


LEA 15. Examples of ESG engagements

15.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

Topic or ESG issue
          Basic labour rights
        
Conducted by
Objectives

Companies have the responsibility to protect the rights of workers, both in their own organisation and in their supply chain. Internationally operating companies often have complex supply and production chains. Protecting only the rights of their own employees is insufficient. Most controversies take place in the supply chain. An important area of improvement with regard to basic labour rights is wages. In many countries there is no minimum wage, or it is so low that workers and their families live in poverty. One of the topics that we are currently addressing is living wage.

Scope and Process

Together with ASN Bank and pension investor MN-Services we engage on this topic with 14 textiles and apparel companies. Two companies not targeted by this group but part of our investment universe are approached by us individually. These are VF Corp and TJX Companies.

Outcomes

Engagement will continue in 2017.

Topic or ESG issue
          Animal welfare
        
Conducted by
Objectives

In 2014, we started engaging for improvement of farm animal welfare practices in relation to the food retail and restaurant industries. Our goal was to improve the standards of at least five companies of the ten companies contacted. After two years of in-depth engagement with the companies contacted we were able to conclude that our goal has been achieved. In 2016, Triodos Research followed up with companies in the food retail and restaurant industries with whom we engaged and provided recommendations in 2014.

Scope and Process

Although the companies in our universe are making good progress, they still have to deal with a number of obstacles. Making improvements in their supply chain, for example, largely depends on the financial capacity of farmers to improve their practices. Having learned about these obstacles helps us to develop our own standards further. Whilst companies in our investment universe are already leaders in farm animal welfare, particularly for fresh meat and eggs, we expect to see the leading companies develop more initiatives related to dairy and processed food. We will therefore continue our engagement efforts with companies in our investment universe.

Outcomes

Five companies have significantly improved their practices, and have started new activities to improve farm animal welfare in their supply chain that go beyond the required legal minimum standards. Among the frontrunners with regard to improved performance are Colruyt, Whitbread and Whole Foods Market.

Topic or ESG issue
          Diversity
        
Conducted by
Objectives

Improve transparency about diversity

Scope and Process

In a letter sent in December 2016 to 104 investee companies, we call upon companies to publicly disclose their policy, programmes and targets on diversity within their organisation, to develop a target for board diversity, and to publicly disclose an evaluation of this policy and the actual achievements.

Outcomes

In 2017, we will follow up on this letter.

Topic or ESG issue
          Climate change
        
Conducted by
Objectives

End 2015, we sent a letter to all our investee companies (110), calling on them to speed up their efforts to bring a halt to climate change. In our letter we stated that for us, a corporate climate protection strategy starts with full support from the board. It requires boards to develop a climate strategy policy and to monitor progress. We called upon companies to disclose their strategy on climate protection, develop targets that are in line with the COP21 Universal Agreement, to disclose their roadmap to meeting these targets and their annual progress in this regard. Finally, we also called on them to refrain from lobbying against policies aimed at meeting the Universal Agreement.

Scope and Process

During 2016, we closely monitored the progress made by companies on these targets. We also called on companies to publicly report their CO₂ emissions, thus allowing us to monitor the total carbon footprint of our investment portfolio.

Outcomes

Twenty companies responded to our letter.

Topic or ESG issue
          Animal testing
        
Conducted by
Objectives

Raise awareness with company of our requirements on animal testing

Scope and Process

When we contacted Japanese personal products company Kao about animal testing in February 2016, it could not present an animal testing policy covering all company activities. It was therefore not eligible for investment.

Outcomes

In September 2016, the company sent us its newly published animal testing policy. The company now meets our requirements and as a result is now part of our investment universe.

Topic or ESG issue
          Bioethics policy
        
Conducted by
Objectives

Help company improve its sustainability performance.

Scope and Process

US biopharmaceutical company Baxalta focuses on therapies for the treatment of blood and immune system disorders and cancer. The company was spun off from healthcare equipment company Baxter, selected since 2011, in July 2015. As a result of this spin-off, the new company needed time to build its ethics and corporate social responsibility policies and programmes. Initially, the company lacked both an animal testing policy and a policy on genetic engineering and discussions were held about our requirements.

Outcomes

In February 2016, the company sent us its bioethics policy. With this policy in place, the company meets our strict requirements on animal testing and genetic engineering. During the year, however, we learned that the company has been acquired by Shire and have consequently removed it from our investment universe.

Topic or ESG issue
          Conflict minerals
        
Conducted by
Objectives

Improve supply chain management

Scope and Process

In 2016, we engaged with German wind turbine producer Nordex on the topic of conflict minerals. The company was newly assessed and approved for investment early 2016. The company stated not to be aware of the topic of conflict minerals but promised to look into this topic.

Outcomes

In a follow-up call in the fourth quarter we learned that the company is currently assessing the types and volumes of potential conflict minerals used. We will be informed once results from this assessment are available.

Topic or ESG issue
          Human rights
        
Conducted by
Objectives

Raise awareness of controversial aspects of project financed.

Scope and Process

Dutch development bank FMO is a close partners in many investment projects and engagement efforts. Therefore, we felt it necessary to question the company about its financial involvement with the Aqua Zarca project in Honduras. Civil protest against this project ended with the murder of one of the protest leaders.

Outcomes

As a result of broader criticism raised by multiple stakeholders about the project, the company decided to stop financing the project.

15.2. Additional information. [Optional]


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