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Teachers' Retirement System of the City of New York

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement

Engagement

Overview

LEA 01. Description of approach to engagement

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

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.4. Provide a brief overview of your organization’s approach to engagement

TRS has a very active engagement program that advances reforms to strengthen corporate governance, align executive pay with long-term performance, and promote sustainable business practices at select companies in which it is a shareowner. In fact, TRS is among the most active institutional investors in terms of filing shareowner proposals and also engaging with portfolio companies through letters and dialogue, often in collaboration with other institutional investors.

The Corporate Governance and Responsible Investment program, within the Bureau of Asset Management of the New York City Comptroller's Office, develops and implements TRS' shareowner initiatives programs, including engagement with management and directors at portfolio companies. Corporate Governance staff present the proposed programs to the TRS' Proxy Committee for review and approval. Most initiatives are done jointly with the other four public pension systems. 

01.5. Additional information [optional]


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

02.2. Additional information. [Optional]


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.

03.3. Additional information. [Optional]


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]

The overwhelming majority of engagement activities are structured around a request for specific reform and often take the form of a shareowner proposal and individual letters, for example to grant shareowners the ability to nominate directors using the company proxy,  to disclose political contributions, challenging excessive CEO pay at Bed Bath &Beyond, prompting executive pay clawbacks at Wells Fargo, calling for governance reforms at Mylan, advocating for climate change risk disclosure at Exxon Mobil, eliminating human rights abuses in the seafood supplychain, supporting increased disclosure of supplier diversity data, or to disclose the race and gender of the workforce by job category, including senior management. Progress in the advancement of these issues can be, and is, measured and is then reported by BAM to the various New York City pension systems, including TRS.

The principal exceptions are softer engagements, such as the Human Capital working group efforts, in which the Comptroller's Office, on behalf of TRS and the other NYC Pension Funds, has been part of a collaborative engagement of major retailers to better understand how they manage and measure human capital as a driver of value to be maximized and not just as a cost to be managed. This work is creating a foundation to engage more effectively with companies on human capital management. Engagement outcomes are reported to the TRS board and a summary is included in the Postseason Report to trustees that is also available to the public.


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

05.3. Additional information [Optional]

TRS, based on trustee interest and/or recommendations from the BAM's Corporate Governance and Responsibile Investment staff, approves participation in collaborative initiatives. In addition, the Comptroller's Office may participate in collaborative engagements on TRS behalf that are consistent with TRS' policies and priorities.

TRS works with other stakeholders to maximize impact in key ESG issues. Through ongoing dialogue with other large institutional investors, key issues are identified and a common strategy is developed to address the issues involved.

TRS is an active participant in several ambitious collaborative engagements, including leading the Boardroom Accountability Project launched by TRS and the other NYC Pension Funds, and participating in the Carbon Asset Risk initiative coordinated by CERES and the Human Capital Working Group led by the UAW Retiree Medical Benefits Trust. TRS also leads, and participates in, various other formal and informal collaborations, including encouraging less-resourced investors to co-file the sharewner proposals submitted by TRS.


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]

The Corporate Governance and Responsible Investment staff in BAM actively participate in collaborative intiatives on behalf of TRS and are responsible for monitoring progress and reporting back to the TRS' board. Summary results of the more signficant initiatives are also included in the Postseason Report that is disclosed publicly.

As noted previously, most collaborative engagements seek a specific set of reforms or disclosures, so progress measurement is relatively straightforward. Some engagements, however, are less focused on a discrete outcome, such as recent engagements around human capital and in some cases climate change.


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.

07.3. Additional information. [Optional]


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]

"Service providers" above represent membership and active participation in INCR and CII, as TRS does not retain service providers to engage on its behalf.


General processes for all three groups of engagers

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


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]


Outputs and outcomes

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


LEA 12. Engagement methods (Private)


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


LEA 14. Companies changing practices / behaviour following engagement (Private)


LEA 15. Examples of ESG engagements (Private)


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