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RBC Global Asset Management

PRI reporting framework 2017

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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

72 Number of companies engaged
10 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Collaborative engagements

49
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 addition to the engagement figures listed above, RBC GAM sent over 200 engagement letters to companies that did not meet our updated proxy voting guideline regarding the number of boards that are appropriate for a sitting CEO. The 2016 update stated that RBC GAM will generally withhold votes from directors who are current CEOs sitting on more than two boards (their own board plus one other). In order to minimize board disruption and allow both companies and directors time to adjust, this guideline was implemented in the RBC GAM Proxy Voting Guidelines with a two year grace period. The aforementioned letters served to notify boards with overboarded CEO directors of our updated guidelines


LEA 12. Engagement methods

12.1. Indicate which of the following your engagement involved.

12.2. Additional information. [Optional]

When appropriate, we will initially engage with an issuer through an engagement letter, outlining the relevant issues and communicating our desire to engage. For instance, in 2016, we distributed engagement letters to over 200 issuers, alerting them to upcoming changes to our proxy voting guidelines that have the potential to impact how we vote at those companies' meetings.

In some cases, our investment teams conduct site visits as part of company meetings and will discuss numerous topics, including ESG. We capture the contents and outcomes of such meetings through our internal tracking and via select teams’ client reporting.


LEA 13. Engagements on E, S and/or G issues

13.1. Indicate if your engagements in the reporting year covered E, S and/or G issues, providing an estimation of the breakdown.

Individual / Internal staff engagements

2.8 % Environmental only
4.2 % Social only
52.7 % Corporate Governance only
40.3 % Overlapping ESG issues
Total 100%

Collaborative engagements

0 % Environmental only
0 % Social only
100 % Corporate Governance only
0 % Overlapping ESG issues
Total 100%

13.2. Additional information. [optional]


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

3

Collaborative engagements

48

14.3. Additional information [Optional].

We have limited the figure listed above for our individual/internal staff engagements to only include actual changes or formal commitments to change. It should be noted that for many of our internal engagements, companies have committed to considering changes based on our ongoing engagement efforts, but have not yet made that change or made what we consider a ‘formal’ commitment to do so. In terms of collaborative engagements, we rely on figures provided to us by CCGG for all CCGG engagements.


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
          Executive Compensation
        
Conducted by
Objectives

Obtain further clarification regarding the company's compensation plan and practices, including its failure to disclose pertinent information on the plan and its decision to increase the compensation pool for the evaluated year, in order to inform our proxy voting decision.

Scope and Process

This was an issuer-specific engagement due to concerning elements in the issuer's compensation plan for the evaluated year. Given the outcomes of the engagement and ultimate proxy voting decisions, this engagement is considered ongoing.

Outcomes

The issuer clarified aspects of the compensation plan and how they directly related to the company’s operational structure and lines of business. We encouraged greater disclosure of the plan’s components and the rationale behind its design. The company has agreed to explore ways to improve its disclosure in this regard and we will continue to monitor its progress.

Topic or ESG issue
          Community Relations
        
Conducted by
Objectives

Obtain additional information regarding the issuer's management of relationships with local communities in the regions where it operates.

Scope and Process

This is an issuer-specific, ongoing engagement pertaining to the issuer's own set of specific circumstances and operations.

Outcomes

The company was able to demonstrate that its Board is educated and actively involved in this issue. Further, the company elaborated on its commitment to employ individuals from these communities and advised that it has opted to delay projects in the past when it did not obtain full support from its local partners.

Topic or ESG issue
          GHG Emissions and Reporting
        
Conducted by
Objectives

Communicate our desire for improved emissions reporting and transparency as the issuer is considered to lag behind its peers in this area.

Scope and Process

This was an issuer-specific engagement due to the company's performance on emissions reporting. Given our engagement objectives, this engagement is considered ongoing.

Outcomes

Emissions reporting and transparency as compared to the peer companies were discussed.  The issuer agreed to take our concerns to its Board and we continue to monitor its performance on this issue.

Topic or ESG issue
          Board Diversity and Experience
        
Conducted by
Objectives

To obtain commitment from the issuer to nominate additional independent directors with relevant operational mining experience to the Board.

Scope and Process

After extensive engagement over several years and in collaboration with a Canadian pension plan, we filed two shareholder proposals, one of which requested that the issuer nominate additional independent directors with operational mining experience to the Board.

Outcomes

Our filing led to further productive engagement, following which the company ultimately agreed to implement our proposal and nominated an experienced geological and mining engineer as an independent director of the board at the 2016 annual meeting. The company also agreed to nominate an additional independent director with operational mining expertise by the 2017 annual meeting.  This second director was actually appointed to the board in mid-2016 and will be subject to re-election by the shareholders at the 2017 annual meeting.

15.2. Additional information. [Optional]


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