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ACTIAM

PRI reporting framework 2017

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You are in Direct - Listed Equity Active Ownership » Engagement » Process

Process

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

          Based on our focus themes climate, water and land; based on lack of transparency (e.g. carbon disclosure, CDP climate/water/forest disclosure)
        

03.3. Additional information. [Optional]

Internal staff engagements and lead collaborative engagements are equally important, however priority of these two are given over less substantial/more passive collaborative engagements.

Engagement in reaction to ESG impacts which have already taken place are responsive engagements. These are formally addressed through ACTIAM's Selection Committee, as they could lead to exclusion in case of unsuccessful engagement.

Proactive engagements relating to our focus themes climate, water and land are prioritised over other engagements. This can apply to both environmental as well as social issues within these focus themes. The focus themes were selected based on systemic risks for the planet and our portfolios. In determining the active ownership strategy for these focus themes, our exposures (holdings) were taken into account. When selecting target companies, geography/market are taken into account. Materiality of ESG factors (increasingly) plays a role not only in selecting engagement issues but also engagement objectives.


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]

ACTIAM formalised 5 milestones that an engaged entity can achieve:

0. Engagement not yet commenced.

1. First correspondence sent and acknowledgement of receipt given by entity.

2. Objectives of engagement discussed in more detail with the entity.

3. Entity responds with relevant information and / or commits to raising the issue internally.

4. Entity develops and publishes (externally or to ACTIAM) a credible strategy and / or formulates clear targets to address the issues.

5. Entity demonstrates that the strategy is being implemented and / or that the targets are achieved.

Progress of engagements is monitored according to this set of milestones and updated on a quarterly basis. This information is brought into the quarterly meeting of the ACTIAM Selection Committee and reported to clients as well as externally on ACTIAM's website (aggregated in case of the latter). If circumstances require so, objectives can be revised, however a company not willing to achieve the objectives is not a valid reason for revision. In such cases, in combination with the entity continuing to violate the Fundamental Investment Principles, ACTIAM can consider exclusion of the entity.


Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

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

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements

other description

          Engagement with leading companies in order to apply that knowledge to engagement with laggards.
        

05.3. Additional information [Optional]

Depending on the factors described in LEA 05.2, ACTIAM decides whether it will partake actively or passively. Active collaborative engagements can entail both a lead investor role or a supporting investor role with an active contribution, such as the drafting of documents, planning, organisational contributions, etc.

Please also see response under LEA 03.


LEA 06. Objectives for engagement activities

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

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take following your collaborative engagements.

06.3. Indicate whether your organisation defines milestones and goals related to engagement activities carried out via collaborations.

06.4. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

06.5. Additional information. [Optional]

ACTIAM formalised 5 milestones that an engaged entity can achieve:

0. Engagement not yet commenced.

1. First correspondence sent and acknowledgement of receipt given by entity.

2. Objectives of engagement discussed in more detail with the entity.

3. Entity responds with relevant information and / or commits to raising the issue internally.

4. Entity develops and publishes (externally or to ACTIAM) a credible strategy and / or formulates clear targets to address the issues.

5. Entity demonstrates that the strategy is being implemented and / or that the targets are achieved.

Progress of engagements is monitored according to this set of milestones and updated on a quarterly basis. This information is brought into the quarterly meeting of the ACTIAM Selection Committee and reported to clients as well as externally on ACTIAM's website (aggregated in case of the latter). If circumstances require so, objectives can be revised, however a company not willing to achieve the objectives is not a valid reason for revision. In such cases, in combination with the entity continuing to violate the Fundamental Investment Principles, ACTIAM can consider exclusion of the entity.

We monitor the actions of all companies addressed by a collaborative engagement if we have an active role at the company's engagement. Normally, within a collaborative engagement, other companies are addressed as well, where we are a passive supporter. In case of passive collaborative engagement, we (collaboratively) set objectives for the company, and we do monitor the actions companies take, however not through the abovementioned milestone system, as we cannot allocate the changes to our own active participation.


Process for engagements conducted with/on your behalf by service providers

LEA 07. Role in engagement process

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

07.1. Indicate if you play a role in the engagement process that your service provider conducts on your behalf.

07.2. Indicate the role(s) you play in engagements that your service provider conducts on your behalf.

07.3. Additional information. [Optional]

The role(s) we play in service provider engagements depend on our level of involvement. Some engagements are conducted completely by the service provider. In those cases, we discuss the rationale and objective of the engagement and assess whether that fits our policy and strategy. Frequency of monitoring and review depends on the type of engagement (more frequent and stringent in case of responsive engagements).

When we play an active role in engagements conducted by our service provider, all the above steps are executed.


LEA 08. Monitor / discuss service provider information

08.1. Indicate whether you monitor and/or discuss the following information provided to you by your service provider

Please select all that apply

08.2. Additional information. [Optional]

Please see answers under LEA 07.2


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

09.2. Additional information. [Optional]

Information about engagement progress (both qualitatively as well as milestone progress) is shared on a quarterly basis with the ACTIAM Selection Committee, comprising the CEO (in the role of Chair), CIO, Head of ESG Research and an external expert who is also a Professor of Ethics. Furthermore, there is an ongoing dialogue about engagements with the investment managers. In the case of positive selection engagements, dialogues with the companies are often conducted together with portfolio managers. Engagements can also be conducted together with external investment managers in case that is relevant, for example because of location or language matters.


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

Service provider engagements

10.2. Additional information. [OPTIONAL]

ACTIAM tracks the number of engagements on an ongoing basis and formally submits them on a quarterly basis to the ACTIAM Selection Committee. The number of engagements, as well as milestone progress, is also reported to clients as well as externally on our website. In 2016, ACTIAM built a new database to track the number and progress of engagements, allowing us to measure our impact and improve our engagement strategy.


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