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Colonial First State Global Asset Management (including First State Investments)

PRI reporting framework 2017

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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. 貴社に正式なエンゲージメントポリシーがあるかどうか示してください

01.2. エンゲージメントポリシーがカバーしている内容を示してください。

          We have an engagement and proxy voting policy and Global Stewardship Principles. They cover the escalation of engagements and proxy voting.
        

01.3. エンゲージメントポリシーのURLを記載してください。[任意]

01.4. エンゲージメントに対する貴社のアプローチの概要を説明してください。

Engagement with company management is a fundamental part of our teams' investment processes. Through company engagement, we seek to highlight areas for potential improvement and risk reduction, encourage improved disclosure on ESG issues, and commend companies that are making progress in this area. We have guidelines and principles for corporate engagement, which are publicly available on our website.

On occasions where our engagement activities with company management are unsuccessful, we may escalate the issue, for example by writing to, or meeting with, the chairperson or lead independent director, voting against directors who we believe are not providing appropriate oversight, or collaborating on further engagement with other like-minded investors. Ultimately we may choose to sell down holdings in companies where we lose confidence in the management of the business following unsuccessful attempts to engage.

01.5. 補足情報 [任意]


LEA 02. Reasoning for interaction on ESG issues

02.1. エンゲージメントの方法および対話を行う理由を明示して下さい。

エンゲージメントの種類

対話を行う理由​
単独/貴社内のスタッフのエンゲージメント
          To increase confidence in the company’s management
        

協働的なエンゲージメント

サービスプロバイダーのエンゲージメント

02.2. 補足情報。[任意]

Collaborative engagement opportunities are normally identified by the responsible investment team where either a firm-wide approach is taken (i.e. for engagement with regulators and corporate industry bodies) or the opportunity is directed at individual investment teams. 


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. 貴社内のスタッフが実行するエンゲージメント活動を特定し、優先順位を決定する正式なプロセスが貴社にあるかどうか示してください。

03.2. 貴社内のスタッフが実行するエンゲージメントを特定し、優先順位を決定する際に使用する基準を説明してください。

03.3. 補足情報。 [任意]


LEA 04. Objectives for engagement activities

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

04.1. 貴社内のスタッフが実行する貴社のエンゲージメント活動に具体的な目的を定義しているかどうかを記載してください。

04.2. 貴社内のスタッフが実行する貴社のエンゲージメントを受けた企業の行動を監視しているかどうかを記載してください。

04.3. 貴社内のスタッフが実行するエンゲージメント活動のためにマイルストーンと目標を貴社で定義しているかどうか示してください。

04.4. 貴社内のスタッフが行うエンゲージメント活動の進捗を監視のうえ評価するために以下のいずれかを実施しているかどうか示してください。

その他

          Engagement progress is incorporated into stock notes / quality assessments
        

04.5. 補足情報。[任意]

Engagement is governed by our engagement and proxy voting guidelines and global stewardship principles. Each team has its own process for setting objectives and monitoring engagements with all teams either doing one or more of the following:

  • Maintaining a company meeting database
  • Incorporating engagement outcomes in stock notes
  • Discussing engagements in regular team meetings (teams meet between two and five times a week)

When surveyed:

4.1 - One team set objectives for all engagements, three teams set objectives for the majority of engagements, three teams set the objectives for the minority of cases and one team does not set objectives.

4.2 - Three teams monitor company action in all cases and four do so in the majority of cases.

4.4 - One team defines and sets timelines milestones and goals, two track progress, one revises and revisits goals on a continuous basis, and four incorporates engagement outcomes into stock notes / quality assessments.


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. 協働的なエンゲージメントを特定し、優先順位を決定する正式なプロセスが貴社にあるかどうか示してください。

05.3. 補足情報 [任意]

We are currently developing a framework for identifying and prioritising collaborative engagements in Australia. 


LEA 06. Objectives for engagement activities

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

06.1. 貴社が関与する協働的なエンゲージメントに目的が定義されているかどうか示してください。

06.2. 貴社の協働的なエンゲージメントを受けた企業の行動を監視しているかどうか示してください。

06.3. 協働エンゲージメント活動に関連したマイルストーンと目標を貴社で定義しているかどうか示してください。

06.4. 貴社のエンゲージメント活動の進捗を監視し、評価するために以下のいずれかを実施しているかどうか示してください。

06.5. 補足情報 [任意]

When evaluating engagements we consider whether the company has changed the behaviour in question or whether it provided sufficient information to reassure us that the issue is being adequately managed. We also consider whether the process has added to our understanding of the industry, companies or issues in question.

When agreeing to participate in a collaborative engagement the relevant investment team undertakes to follow up with the company in individual meetings and to monitor progress. We have been concerned that letter writing campaigns without individual investor follow-up may ultimately undermine the effectiveness of collaborative engagements.

We are currently developing a framework for identifying and prioritising collaborative engagements in Australia. 


General processes for all three groups of engagers

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

09.1. エンゲージメントから得た考察を、貴社内の運用担当者や貴社外の運用会社と共有しているかどうかを記載してください。

エンゲージメントの種類

共有する考察
単独/貴社内のスタッフのエンゲージメント

協働的なエンゲージメント

09.2. 補足情報。[任意]

ESG engagement and proxy voting is performed by the relevant analysts and portfolio managers not by a separate team. As a result analysis of ESG issues which can influence an investment decision can also influence engagement and proxy voting activities or visa-versa. We strongly believe this integrated approach to company analysis and stewardship is critical to the full and consistent application of responsible investment principles. 

For collaborative engagements, progress is incorporated by the team(s) involved, however we only share the information with other teams where we believe the engagement is relevant to them. 


LEA 10. Tracking number of engagements

10.1. 貴社がエンゲージメントしている企業の数を追跡しているかどうかを記載してください。

エンゲージメントの種類
エンゲージメントの追跡
単独/貴社内のスタッフのエンゲージメント

協働的なエンゲージメント

10.2. 補足情報。[任意]

In terms of tracking individual engagements, five teams track the number of engagements in full, one team partly tracks the number of engagement, one indicated that they don’t track engagements but could provide a reasonable estimate and one did not track engagements.

In many cases engagement occurs as part of the ongoing relationship with companies that can take years to develop. For the most part ESG meetings are not held separately to meetings discussing the financial performance of the company and so for some teams narrowing engagements to ESG related interactions is not possible.

Each team has its own process for monitoring engagements with all teams either doing one or more of the following:

  • Maintaining a company meeting database
  • Incorporating engagement outcomes in stock notes
  • Discussing engagements in regular team meetings (teams meet between two and five times a week)

Outputs and outcomes

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

11.1. 報告年度に貴社がエンゲージメントを行った上場株式ポートフォリオの数を明示してください。

エンゲージメントを行った企業の数
割合(5%刻み)
この割合の計算基準を明記してください

 

 

単独/貴社内のスタッフのエンゲージメント

1000 Number of companies engaged
30 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

 

 

協働的なエンゲージメント

2
0 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. ESG問題に関連して報告年度中に企業と複数かつ現実的で詳細にわたる議論ややりとりを行ったエンゲージメントの割合を記載してください。

エンゲージメントの種類
総合的なエンゲージメントの割合(%)

 

 

単独/貴社内のスタッフのエンゲージメント

 

 

協働的なエンゲージメント

11.3. 報告期間の協働的なエンゲージメントの中で、貴社が主導したエンゲージメントの割合を記載してください。 [任意]

エンゲージメントの種類
主導的役割を果たした割合(%)

 

 

協働的なエンゲージメント

11.5. 補足情報。[任意]

There is some variability in how different investment teams define and capture engagements which makes it difficult to track from a whole of organisation level. The number of comprehensive engagements was estimated by two teams to be greater than 50%, by three teams as between 10-50% and by two teams as less than 10%, two teams could not estimate. 


LEA 12. Engagement methods

12.1. 貴社のエンゲージメントが以下のどの項目を含むか明示してください。

12.2. 補足情報 [任意]


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

13.1. 報告年度におけるエンゲージメントがESGを対象としたかについて明示するとともに、ESG問題のおおよその内訳を記載してください。

単独/貴社内のスタッフのエンゲージメント

25 環境のみの割合(%)
20 社会のみの割合(%)
50 コーポレートガバナンスのみの割合(%)
5 ESGが重複する割合(%)
Total 100%

協働的なエンゲージメント

40 環境のみの割合(%)
40 社会のみの割合(%)
20 コーポレートガバナンスのみの割合(%)
0 ESGが重複する割合(%)
Total 100%

13.2. 補足情報。[任意]

We can confirm that engagements covered all three areas however we do not track the number of engagements in this way consequently the breakdowns are estimates.


LEA 14. Companies changing practices / behaviour following engagement

14.1. 報告年度に貴社や貴社のサービスプロバイダーのエンゲージメント活動を受けて、企業が実務を変更した、または実務を変更するように正式に約束した事例件数を追跡しているかどうか明示してください。

14.3. 補足情報。


LEA 15. Examples of ESG engagements

15.1. 報告年度に貴社または貴社のサービスプロバイダーが実行したエンゲージメントの事例を挙げてください。

トピックまたはESG問題
          Board Experience
        
実行者
目標

Additional independent directors, preferably with ASX 100 board and US Medical Device Industry experience. 

対象範囲およびプロセス

Sirtex

Sirtex Medical is an Australian-based biotechnology company which engages in the development, manufacture, and distribution of liver cancer treatments.

Sirtex Medical sales have grown tenfold over the last decade as their sole product, SIR-Spheres, rapidly gained adoption by oncology centres in the US. This stellar run of growth catapulted Sirtex Medical from the small companies’ universe into the S&P/ASX 100 in a relatively-short period of time.

We met with Sirtex Medical’s Chairman and CEO to raise concerns we had regarding lack of top 100 listed experience among directors, given that Sirtex Medical was now a large cap company and would face new challenges and responsibilities.

We suggested recruitment of additional independent directors, preferably with ASX 100 board and US Medical Device Industry experience. We consider the structure of company boards to be important and we will engage with companies where we feel the board’s skills and experience could be strengthened. 

結果

Ongoing

トピックまたはESG問題
          Executive Remuneration
        
実行者
目標

Improved structure of remuneration 

対象範囲およびプロセス

Goodman Group

Goodman Group is Australia’s largest listed industrial property group. Its portfolio consists of more than 160 industrial and business properties across Australia.

At Goodman’s annual general meeting in November 2016 we voted against the Remuneration Report on the basis of proposed substantial equity grants as part of the remuneration structure, and for these grants to be based on a single metric, being EPS. We had concerns with the reliance on a single metric, the method of calculation of this hurdle, as well as the size of the equity grants being proposed.

We met with the head of the Remuneration Committee in late October to express our concerns and to listen to Goodman’s rationale for the size and structure of the proposed equity grant. Despite explanations for the proposal from the head of the Remuneration Committee, we remained opposed to the remuneration structure and, after informing Goodman of our intentions, voted accordingly. The company’s Remuneration Report subsequently received its ‘first strike’, with more than 25% of shareholders voting against it.

結果

Company received first strike. 

トピックまたはESG問題
          Capital management
        
実行者
目標

Improved capital management

対象範囲およびプロセス

Fraport

Fraport operates Frankfurt Airport, a key transport hub for Lufthansa, and also has exposure to faster-growing markets such as Turkey, Bulgaria and Peru. 

During the year we engaged with Fraport regarding their strategy and ways in which they could maximise shareholder value.  In November 2016 we wrote a letter to the Board making the following suggestions:

  • Pay a special dividend
  • Increase the dividend payout ratio
  • Refrain from international airport acquisitions
  • Recycle mature assets 

We will continue to engage with the Board on relevant issues, as we have done with multiple companies in the past. 

結果

We received a hand written letter from the chairman which we appreciated. The company does not agree with our suggestions however as long term shareholders we will continue to engage with the Board on relevant issues, as we have done with multiple companies in the past. 

トピックまたはESG問題
          Board diversity (age)
        
実行者
目標

Encourage board renewal 

対象範囲およびプロセス

Eurotunnel 

In December 2016 we met with the company regarding corporate governance practises at Eurotunnel.  

Of Eurotunnel’s eleven Board members, six are over 70 years old.   We highlighted that the US Class 1 freight railroads have done an exemplary job in terms of safety and productivity improvements in recent years. We suggested that introducing a Board member with that level of experience could be a positive.

結果

The company reassured us that they are conscious of this issue and are currently looking to address it.  In addition teh company highlighted their efforts to make the board more independent and diverse for example they have four female Board members. We welcome greater diversity at Board level, as we believe that the ability to draw on a range of skills, perspectives and experiences is beneficial to an organisation. We will continue to encourage moves in this direction.

トピックまたはESG問題
          Green Buildings
        
実行者
目標

Better understand and encourage the companies approach to green buildings.

対象範囲およびプロセス

Case study 1: Kilroy Realty

Kilroy Realty is a US REIT which owns and operates office properties on the US West Coast. We initially invested in the stock in 2013, as the company appeared well positioned to benefit from growing office demand from technology and media companies.

Kilroy is a leading developer and operator of LEED (Leadership in Energy and Environmental Design) properties. Its development projects are all built to LEED Platinum and Gold standards, and its stabilised property portfolio is 47% LEED-certified. LEED certification is of central importance to prospective tenants because the environments help tenants attract and retain the most effective employees, and sustainability is important to today’s modern workforce.

Kilroy’s dedication to green buildings has set new standards for office development in San Francisco. The company’s successful integration of solar panels at its 333 Brannan and Hundred Hooper developments inspired San Francisco City Council to make it a requirement that buildings under six stories must either have solar panels on solar-ready areas; or have a green roof (or “living”) roof. Global Real Estate Sustainability Benchmark (GRESB) has named Kilroy the top real estate company on sustainability in North America for the past three years. 

結果

Over time we have engaged with Kilroy’s management in order to fully understand their progress in this area of their business. Kilroy’s expertise at constructing high-performance buildings means that LEED Gold and Platinum certification costs Kilroy less (with cost differentials of 0.1% and 0.6% respectively) than the market average of between 1% and 2%, reinforcing their competitive advantage in this market. The company remains a core holding in our global portfolios. 

15.2. 補足情報。


Communication

LEA 16. Disclosure of approach to ESG engagements

16.1. 貴社がエンゲージメントに関する情報を積極的に開示しているかどうかを記載してください。

16.2. 一般に開示されている情報が、顧客や受益者に開示されている情報と同じであるかどうかを記載してください。

16.3. 貴社が一般に積極的に開示しているエンゲージメントに関する情報の種類を記載してください。

開示しているエンゲージメントに関する情報

          Approach to engagement by team
Engagement examples including information above
        

16.4. エンゲージメントの情報を開示する頻度について記載してください。

16.8. 補足情報。[任意]


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