The Active Ownership team engage with companies and vote on behalf of our clients to maximize the value of their investments, using knowledge from our equity and credits investment analysts, RobecoSAMs sustainability investing research analysts and the sustainability insights we have gained through RobecoSAM's annual Corporate Sustainability Assessment (CSA) of more than 3,900 companies. We are convinced that engaging with companies on the most material sustainability issues enhances their competitiveness and profitability, as well as generating measurable benefits for investors, companies and society at large. In short, our ambition is to continuously raise the bar for corporate sustainability practices.
The outcomes of our engagement efforts are communicated to our analysts, portfolio managers and clients, enabling them to incorporate this information into their investment decisions.
Our overall approach to engagement is based on:
Shareholder engagement with companies in our clients' portfolios
SMART (Specific, Measurable, Attainable, Relevant, Time-bound) engagement objectives and progress tracked quarterly
Promoting market best practices through active membership in collaborative platforms such as ICGN, PRI, Interfaith Centre for Corporate Responsibility (ICCR), the Carbon Disclosure Project, ACGA and Eumedion
Providing detailed confidential engagement reports directly to the client, as well as reports that are suitable for distribution/reporting to the client's own stakeholders (i.e. pension fund beneficiaries)
We run two engagement programs:
Value Engagement: A proactive approach focusing on material sustainability themes that have the most potential to create value for shareholders. These themes are selected in close cooperation with Robeco's analysts and portfolio managers located around the globe, based on the financial materiality analysis conducted by RobecoSAM's sustainability investing research team. By discussing sustainability risks and opportunities with companies and providing them with insights into investors' expectations of corporate behavior, we encourage them to adopt better practices. We believe companies with sustainable business practices can create a competitive advantage and are more likely to be successful over the long run, ultimately contributing to the risk-return profile of their securities.
Enhanced Engagement: Focusing on companies that severely and structurally breach principles of the United Nations Global Compact in the areas of human rights, labor, environment and anti-corruption. Enhanced engagement might ultimately lead to exclusion of a company from our investment universe if it does not improve its ESG behaviour and does not lift the breach(es), after our engagement.
Please read more in our engagement policy and our stewardship policy:
The reach of this engagement effort is broad and its value intensifies at different stages of the process as companies become more involved in bilateral dialogues based on the results of the assessment. At the first stage of the annual process, invitations to participate in the assessment reach over 3,500 of the largest companies worldwide by free-float market capitalization, sending a strong signal about the issues that matter for sustainability investors to all industries across the globe. 942 companies participated actively in the assessment in 2017 and participation rates have been increasing year on year, reflecting a growing interest by corporates in evaluating their sustainability progress compared to their peers and investors' expectations. By taking a best-in-class approach, RobecoSAM does not exclude any industries and so engages in dialogues with a wide range of companies about improving their sustainability performance in a number of general and industry-specific corporate sustainability issues.
Each year, RobecoSAM assesses over 4,000 companies in total, based on publicly-available information and information provided by the companies. All assessed companies are entitled to receive their individual benchmarking scorecard and participating companies can also request in-depth follow up dialogues with RobecoSAM analysts or different performance reports highlighting major strengths and weaknesses in their sustainability performance. RobecoSAM regularly offers free-of-charge webcasts to present new methodology and highlight major observations from its assessment, providing companies the opportunity to ask questions during a live Q&A with RobecoSAM. Since 2016, RobecoSAM also offers companies access to a number of web-based tools that leverage RobecoSAM’s database to benchmark themselves against their industry or customized peer groups, and gain access to leading practice examples from other companies. Companies interested in even more detailed benchmarking can request a number of other customized reports, depending on the level of detail needed. In total, more than 250 companies were involved in these bilateral follow-up or in-depth dialogues in 2017.
In summary, by progressively intensifying our dialogue with companies that demonstrate a strong interest in improving their performance and by increasingly focusing this dialogue on the most material issues, we believe that RobecoSAM can maximize the value and impact of engagement activities and make a meaningful contribution to companies' efforts to improve their sustainability and financial performance.