Prioritisation, planning and the scope for collaboration are important factors in shaping our engagement objectives and activities. Engagement prioritisation is done in a number of ways, such as: issues highlighted by ESG stock reviews, which form the part of every mainstream stock review; quarterly screening and monitoring of holdings; via the proxy voting process identifying issues; company events.

Throughout this, the RI team works with the relevant investment professionals. Engagement is also guided by their preferences, ideas and concerns.

The decision to intervene is prioritised based on our assessment of the significance of issues to the company, the risks to our clients, relative holdings, scope to effect change and opportunities to collaborate. Internal escalation procedures will be followed if the decision to intervene is made.

We take a proactive approach to engagement; there are different levels depending on the situation. We maintain thorough records of our engagements, including attendees, holdings, topics, questions, previous voting history and notes from prior engagements. The performance of companies with which we have engaged is subject to review per the investment process. Regular meetings with companies also serve to update us on progress. We recognise that some of the issues that we engage on are longer term themes.

Meetings before and after engagements take place to clarify aims and objectives for the engagement. Each meeting has one leader whose responsibility it is to draw together an agenda and lead discussion.

Meeting notes are uploaded to our research sharing platform where we maintain and disseminate notes and records of meetings. This allows the information to be distributed throughout the firm, specifically to the relevant investment professionals. This serves as a means on monitoring progress.

Where goals are not met, the matter may be escalated and the decision made to intervene (as described in LEA 01.04). Engagement outcomes may also result in an investment decision being made.

On a quarterly basis, we screen our preferred holdings according to various ESG criteria. The results of this are then distributed throughout the investment department. This serves as another way to highlight issues and prioritise company engagement.

We view proxy voting as one of the most powerful ways in which to signal disapproval of a company strategy. All decisions are taken in collaboration with our portfolio managers and analysts. Watchlists are maintained within ISS Proxy Exchange. This allows us to review performance where there have been ESG concerns and to reflect this in our proxy voting research and subsequent action which may or may not include engagement.

By virtue of the collaborative engagement there are regular opportunities to review and present outcomes to the wider group as part of a formalised process. This is a main benefit of group engagement. Internally, we maintain records of companies involved and the outcome of discussions. 

As with company engagement,  information gathered (as well as aims, progress, outcomes) are disseminated internally and, as appropriate, uploaded into the investment research platform per company, theme etc. to form part of portfolio manager/analyst investment and review process.

The RI team is embedded within the investment department and, as such, the work of the team – including engagement-related - form part of investment research and portfolio stewardship; investment decisions make be taken as a result of engagements. Summarised write-ups alongside meeting notes are circulated to relevant analysts and portfolio managers as well as being stored within the investment department’s research sharing platform.

Engagements are reviewed as part of the proxy voting and ESG stock review process. Insights passed on are monitored through their inclusion in internal review notes, at stock meetings and their use in the mainstream meetings of fund managers.

Our integrated investmen process means ESG considerations form part of company research and engagements. There were around 3,000 meetings led by fund managers and analysts from the investment department. The number of meetings led by members of the RI team numbered 166 last year, from 133 individual companies. The RI  engagements focus specifically on environmental, social and governance issues, whereas investment desk-led meetings tend to focus on operational and strategic concerns. The RI team engagements are tracked in full and the number is over and above any ESG-related matters discussed in the investment desk-led meetings.

As an illustrative example, of the c520 meetings held by the UK investment desk in 2016, c300 were relevant for companies held in the Threadneedle Ethical UK Equity fund, where ESG matters form an important part of the discussion.

RI team-led company meetings are recorded in a team calendar with meeting notes uploaded to our research-sharing platform, attached to individual companies and disseminated throughout the firm. As part of our (public) quarterly ESG report, we list all companies engaged with per quarter, alongside a selection of case studies.

For further information, please refer to LEA 11.05.