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Storebrand ASA

PRI reporting framework 2017

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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]

Storebrands policy for enagement and active ownership states that resources will be channelled and prioritised to the following companies

- companies where Storebrand's equity share is over 3% in Norway and 0.7% in Sweden

- companies involved in controversial cases, including governance, environmental and social issues

- companies where the equity share of indivdual funds is over 5%

Storebrand will mainly address the following topics: incentive structures, capital utilisation, board composition, board member ownership, corruption and economic crime, human rights and international humanitarian law, severe climate- and environmental degradation.

Activities will be prioritised with respect to significance of ownership, risk and/or relevance to value creation, including positive impact. Activities will normally be decided and conducted by responsible portfolio managers (equity and fixed income) and/or ESG analyst. The Engagement Committee oversees framework and policies in this area in addition to supervise, select and prioritize all engagement cases .There is a special focus on theme proactive engagement. It is also a place where active ownership/engagement best practice is discussed. The commitee includes financial analysts as well as ESG analysts and the head of Storebrand Asset Management.

Policies/procedures specific to ESG analysts: 3500 companies are monitored by a sustaniability data provider  to detect potential violations with the Storebrand Standard. The data provider is also in contact with these companies to include all company measures and corporate behaviour changes regarding all potential violations of the Storebrand standard. Potential violaiton cases where posibilities for changed corporate behaviour are detected are sent by the ESG team to the Engagement Committee for review. The ESG team will also send for review potential theme engagement cases that are detected as opporuntity or risk for an industry during our biannual sustainbility rating analysis of all companies in our investment universe.

 Prior to each engagement process, specific goals are established for the engagement process, in order to ensure clear communication with investees as well as ease the measurement of engagement success. ESG analysts record the level of engagement success in each engagement process. There are four steps, where the fourth level is aligned with the UN PRI definition of success: "The measures taken were all or mostly completed after Storebrand contacted the company". Hence, we can assume our engagement efforts have contributed to the improvement, although it is rarely possible to determine with certainty Storebrand's particular effect on the outcome.

In instances where the engagement process does not lead to the required improvement in reactive engagement porcesses, Storebrand may exclude a company from investments (Storebrand Standard). In case of exclusion, formal reporting procedures are in place to inform both company, portfolio managers, as well as in-house compliance officers.

Excluded companies are reviewed regularly (every six months), in order to request information on any improvements and/orseek to establish a dialogue.


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.

04.5. Additional information. [Optional]

The goals of each engagement have usually been  in the area of measures to remedy any violation of the Storebrand Standard (reactive engagement); measures to reduce the risk of recurrence; as well as reporting on these measures publicly. The specific goals may be adjusted, usually enhanced and/or detailed, as the engagement process proceeds.

Ideally, the measures taken by the company should meet best practice standards. However, a reactive engagement is terminated if the company complies with the initial requirements and the risk of recurrence is considered to be reduced to an acceptable level. Typically, we would expect company to meet industry average level.

Storebrand measures and registers all engagement with companies on the following internal scale.

Level 1: Company contacted (explanation of concerns+ request for company practice improvement); no response

Level 2: Comapny contacted; unsatisfactory response

Level 3: Company contacted: satisfactory response

Level 4: Company contacted: Improved business practice

In 2016 Storebrand's focus has been on increasing the amount of proactive engagements. These engagements can have different goals and a milestone evaluation approach (from basic to advanced practice) might be used; However, so far, we are measuring progress by using the same scale depending on how receptive the company is to achieve those goals.

The progress of engagement is discussed in a monthly meeting in the Sustainable Investment team including minimum requirements, alternative approaches to achieve or improve dialogue, and whether or not to escalate an engagement.

Escalation of  engagement, if the company does not meet our minimum requirements (or communicate such actions), after repeated attempts at dialogue. "Escalate" might be to contact excecutive level staff at domestic offices to obtain contact with headquarter staff, involve Storebrand executives in the dialogue, collaborate with other investors etc. As a last resort, the case will be presented before the Sustainable Investment Committee, to make a final decision on whether or not to exclude the company from investments. If excluded, the company is always informed of the decision, and contacted regularly afterwards to encourage improvement.


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