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BlackRock

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement » Process » Process for engagements run internally

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

other description

          a track record of underperformance on ESG and financial metrics compared to peers
        

03.3. Additional information. [Optional]

We screen a subset of our portfolios representing broad regional indexes across the globe in which we have significant shareholdings on a quarterly basis. The intent of this screen is to identify laggards in managing ESG considerations to drive proactive engagement where there is a clear nexus between the ESG matter and financial risk. We prioritize individual engagements based on the materiality of the issue under consideration and the size of our holding (or the value at risk).


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take following your engagements.

04.3. Indicate whether your organisation defines milestones and goals for engagement activities carried out by internal staff.

04.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

04.5. Additional information. [Optional]

We assess the effectiveness of our engagements based on the achievement of our engagement goals, as amended once our understanding of the situation has developed. In setting our objectives, we work with portfolio managers and others internally and externally to build our knowledge of the issues, propose a sound course of action and define optimal outcomes (as perceived from the outside). Thus, the measures for each engagement will be different, and the course of each engagement is unique so not all options above apply to every engagement. Generally, we look to persuade the company that the status quo is not acceptable, put forward some ideas for addressing the issue and remain involved to encourage the delivery of fundamental change by management and the board. We are clear that we represent patient capital but that we are not infinitely patient and if we believe progress is not sufficient given the materiality of an issue we will escalate our engagement to a vote against management, possibly through opposing the re-election of the director/s we deem most accountable for the issue.  We remain open minded and adapt our position as we progress the engagement, where appropriate, based on information to hand and developments.


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