Engagement is undertaken on our behalf by Hermes Equity Ownership Services (Hermes EOS). Engagement with companies is undertaken both for monitoring and influencing purposes and where relevant to address strategic issues relevant to long-term value. Hermes EOS' engagements address the major themes of environment and governance as well as social and ethical issues. Engagement is undertaken holistically, and it is typical for a number of issues across the themes of E, S and G to be discussed concurrently. For the major part of its engagement work, Hermes EOS sets objectives to be achieved at the outset of the engagement. Engagements are then monitored by reference to a system of milestones to ensure that satisfactory progress is made over a reasonable period of time.
Engagements for monitoring are undertaken to gather information on companies' processes to ensure that they adhere to best practice. Any perceived risks to shareholder value or reputational risks may then be taken forward as an engagement for influence with a view to influencing the desired change.