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RobecoSAM AG

PRI reporting framework 2018

You are in Direct - Listed Equity Active Ownership » Engagement » Process

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. 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]

 

The answers above are related to engagement by the Governance & Active Ownership (GAO) team. "Materiality of ESG factors" is also used for CSA Engagement and conducted by the RobecoSAM Sustainability Investing Research team.

AO Engagement

Robeco's selection of engagement themes and engagement cases is based on an annual selection process. Themes and cases are selected in close collaboration with our investment teams, our clients and RobecoSAM's sustainability investing research analysts. By combining RobecoSAM's in-house sustainability expertise with our active ownership practices, and feeding the results back to our equity and fixed income portfolio managers, we truly integrate engagement into sustainability investing - setting the standard for the financial industry. Robeco's Active Ownership services are used by a broad client base.

Material themes for our value engagements are determined in collaboration between Robeco's Active Ownership Team, portfolio managers, analysts and RobecoSAM's Sustainability Investing research team. The focus is on long-term, financially material ESG factors that can affect a companies' ability to create value. Before starting a theme, we also inform our institutional investor clients in our thought process and involve them in the selection and design of our engagement themes.

For any given engagement theme, companies are selected based on the highest exposure to the engagement topic. Sectors and client holdings are a further important input at this stage of the process.

Each of our themes is refined using baseline research on the engagement topic. This is used to establish the starting point for individual companies, to keep the engagement focused, and to efficiently address the most material ESG factors. For each company SMART (Specific, Measurable, Attainable, Relevant, Time-bound) engagement objectives are defined.

In addition to the proactive engagement selection process for our value engagement program, we select companies for our Enhanced Engagement process that severely and structurally breach principles of the United Nations Global Compact in the areas of human rights, labor, environment and anti-corruption

CSA Engagement

Within CSA Engagement our approach differs from more conventional engagement strategies in that we engage primarily with sustainability leaders as well as companies aspiring to become sustainability leaders. Companies approach us to engage in a dialogue on how to continuously improve their sustainability performance and benchmark themselves against their peers. These companies set high standards for their industry peers, which in turn puts competitive pressure on the laggards, leading to improvements of corporate practices across the industry as a whole. The CSA provides a platform for companies to identify new sustainability trends on financially material sustainability issues in their industry and benchmark their own performance over time against their peers.


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 during and following your engagements activities carried out by internal staff.

04.3. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

04.4. Additional information. [Optional]

The answers above are related to both AO Engagement and CSA Engagement.

AO Engagement

The Active Ownership team identifies its engagement performance on the basis of measurable outputs and successes. We track the progress of all of our engagement activities on a quarterly basis, based on the SMART (Specific, Measurable, Attainable, Relevant, Time-bound) objectives established for each theme and individual company.

We generate confidential engagement reports as well as public quarterly engagement (and voting) summary reports that provide details of the results of our engagement and voting. Clients receive comprehensive voting and engagement reporting for their holdings under the mandated engagement and voting agreements.

In addition, in a monthly engagement meeting with all Robeco's engagement specialists, the progress of our engagement activities is monitored, discussed and evaluated. Ongoing improvements to the overall engagement process and approach are discussed in this meeting in a structured way.

CSA Engagement

Companies participating in RobecoSAM's Corporate Sustainability Assessment (CSA) are assessed annually, and receive a Benchmarking Scorecard to allow them to measure their progress over time in Economic, Environmental and Social themes. Media & Stakeholder Analysis reports highlight negative externalities to companies that have been identified by RobecoSAM and have led to a downgrade in a company's score - highlighting major topics of concern, misconduct, mismanagement or potential financial or reputational risks. Through dialogues with companies to follow-up on their performance, the issues key areas for improvement and issues are identified, best practices are shared and the investors' point of view (including the financial materiality of topics) are explained.


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. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements.

other description

          Collective power in combination with individual engagements.
        

05.3. Additional information [Optional]

The answers above are related to engagement by the Active Ownership (AO) team. The first three answers also apply to the CSA Engagement.

Recognizing the value of different forms of engagement, Robeco carries out individual engagements as well as collaborative engagements with other investment institutions. We believe that the best way to promote improved market practices is through active membership in collaborative platforms such as the ICGN, PRI, Eumedion, EFAMA, ACGA, ICCR. For each of these platforms we identify and prioritize our collaborative engagement activities.

Historically, we have found our success rate to be higher in individual engagements than in collaborative engagements. At this moment, the majority of our engagements are individual staff engagements. We know from experience, however, that specific collaborations can be very effective. We look for collaborations that are focused and well organized, and which add more power to our engagement approach. Where this is the case, we add collaborative engagement as an instrument within a certain engagement theme. This way, we combine our individual and collaborative engagement efforts to achieve the maximum possible engagement result. We prioritize collaborative engagement where we can combine these engagements with our individual engagements. Under these circumstances, we will always look to take an active role in these collaborations in the form of a (co) leadership position, and by contributing to policy documents, and outreach etc. Collaborative engagement via Eumedion and the ICCR are examples of effective and on-going collaborations.

Robeco and RobecoSAM have joined various collaborative networks with the purpose of promoting Responsible Investment principles and enhancing its effectiveness in implementing an ESG integrated investment and responsible ownership approach. The most relevant are provided below:

United Nations Principles for Responsible Investment (PRI), joined in 2006

Member of vote confirmation project group

Member of the Investor Engagements Advisory Committee

Lead member of the clinical trial transparency engagement group

Member of the Advisory Committee of the Labour Standards Engagement Group

Member of the UNPRI Reporting and Assessment Steering Committee

Member of the Advisory Committee of the Water Risk in Agricultural Supply Chain Engagement Group

Member of the Advisory Committee of the Sustainable Palm Oil Engagement Group

Member of the UNPRI Reporting and Assessment Steering Committee

United Nations Global Compact, joined in 2014, before this we were a signatory via our mother company Rabobank

United Nations Environment Program Finance Initiative (UNEP FI), joined in 2012

International Corporate Governance Network (ICGN), joined in 2005

Corporate Risk Oversight Committee (co-chair)

Institutional Investor Group on Climate Change (IIGCC), joined in 2009

Supporter of the Investor Statement on Climate Change

Member of the Corporate Engagement Working Group

Corporate Governance Platform Eumedion (governance network with international partners based in the Netherlands), joined in 2006

Board member

Chair of the investment committee, Active member of the investment committee

Active member of the legal committee

Active member of the audit committee

Active member of the research committee

Access to Medicines Initiative, joined in 2010

Investors Working Group member

Asian Corporate Governance Association (ACGA), joined in 2010

Active participation in collaborative initiatives, panels and company trips.

European Fund and Asset Management Association (EFAMA), joined in 2004

Member of the Working Group Responsible Investing

Actively involved in setting of codes.

Interfaith Centre on Corporate Responsibility (ICCR), joined in 2015

Member of the Global Health engagement group

Member of the Human Trafficking engagement group

Member of the Water engagement group

Member of the Food engagement group

Member of the Methane engagement group

Dutch Association of Investors for Sustainable Development (Vereniging van Beleggers voor Duurzame Ontwikkeling, VBDO), joined in 2016


LEA 06. Objectives for engagement activities

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

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take during and following your collaborative engagements.

06.3. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

other description

          Report progress against defined milestones and goals
        

06.4. Additional information. [Optional]

The answers to questions 6.1 to 6.3 are related to AO Engagement and CSA Engagement. In question 6.4, the answers are related to AO Engagement. For CSA Engagement, the first three answers are applicable in question 6.4.

AO Engagement

Robeco and RobecoSAM adopt the same approach to monitoring and evaluating the progress of individual engagement activities and those undertaken as collaborative activities:

As with our individual engagements, we track the progress of all our collaborative engagements, on a quarterly basis based on SMART objectives. We provide measurable engagement outputs and successes. We deliver confidential engagement reports as well as quarterly engagement (and, where relevant, voting) summary reports that provide details of the results of engagement and voting. These reports are delivered to our internal (portfolio managers) and external clients (institutional investors).

If we close a case unsuccessfully, we inform the company and our analysts and portfolio managers, so that they can incorporate this information in their analysis and investment decisions.

CSA Engagement

The overall approach of collaborative engagements is to focus on the CSA methodology, in order to leverage it to engage with companies on specific topics or developing sustainability trends or challenges. Outcomes are measured in terms of increased awareness amongst companies, as can be measured in their public corporate disclosures and information provided directly to RobecoSAM via the CSA. For example, RobecoSAM observed a significant improvement in disclosures on the topic of Tax Transparency after introducing it as a standalone criterion in 2014, when it was an underreported topic and not generally part of traditional sustainability research frameworks. In 2017, RobecoSAM introduced new questions on Policy Influence, another underreported topic that is gaining significant investor interest. By introducing these questions and requirements around disclosure, RobecoSAM hopes to see increased transparency to stakeholders on these issues by companies in the coming years. RobecoSAM reviews the number of companies reporting on newly introduced topics as part of its annual review process.


General processes for all three groups of engagers

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

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

09.2. Additional information. [Optional]

The answers above are related to both AO Engagement and CSA Engagement.

AO Engagement

Robeco has an integrated sustainability investing framework. 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.

CSA Engagement

The results from the annual RobecoSAM Corporate Sustainability Assessment (CSA) are shared with analysts and portfolio managers within Robeco and RobecoSAM, and are integrated into research processes, products and advisory services. The insights gained from the engagement activities with companies through the CSA form the foundation for RobecoSAM's Sustainability Investing Research approach, which in turn acts as a key input into integrating sustainability information into the various investment approaches across the Robeco group.

Since 2016, RobecoSAM has been publishing the percentile ranks of the scores derived from the CSA on the Bloomberg Professional platform, making selected results available to the broader investment community at no additional cost. The index constituent list for the Dow Jones Sustainability Indices (DJSI) are publicly available on RobecoSAM’s website, free-of-charge. On average, these lists are downloaded once an hour every day by investors, students, academics, companies and NGO’s from around the world.


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of your engagement activities.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

10.2. Additional information. [OPTIONAL]

The answers above are related to both AO Engagement and CSA Engagement.

AO Engagement

The Active Ownership team tracks all of the engagement cases in our value and enhanced engagement programs. These cases are reported on a frequent basis, including status changes on the pre-defined SMART objectives.

If we support other investors by co-signing letters, for companies out-side the program, we typically do not consider these as engagement cases. Only if we have defined specific goals with SMART objectives, we place such engagements in our program.

CSA Engagement

RobecoSAM tracks the number of direct company engagements through the Corporate Sustainability Assessment (CSA) in terms of the number of feedback calls, meetings and workshops held with companies. On a more granular level, RobecoSAM tracks the number of direct interactions with companies by email or phone through its dedicated CSA Helpline, which serves as an ongoing, free-of-charge line of communication between companies and RobecoSAM.

In 2017, RobecoSAM held over 250 individual feedback calls, meetings and workshops with companies that participated in the CSA. The CSA Helpline sent nearly 9,000 emails in 2017 and held over 500 phone calls with companies.


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