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Triodos Investment Management B.V.

PRI reporting framework 2018

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Outputs and outcomes

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

11.1. Indicate the amount of your listed equities portfolio with which your organisation engaged during the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion (to the nearest 5%)
Specify the basis on which this percentage is calculated

Individual / Internal staff engagements

108 Number of companies engaged
75 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Collaborative engagements

31
20 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. Indicate the proportion of engagements that involved multiple, substantive and detailed discussions or interactions with a company during the reporting year relating to ESG issue.

Type of engagement

% Comprehensive engagements

 

 

Individual / Internal staff engagements

 

 

Collaborative engagements

11.3. Indicate the percentage of your collaborative engagements for which you were a leading organisation during the reporting year.

Type of engagement

% Leading role

  Collaborative engagements

11.5. Additional information. [Optional]

In our collaborative engagement efforts we focus on companies that are selected for investment by Triodos, although some collaborative engagements go beyond these.


LEA 12. Engagement methods

12.1. Indicate which of the following your engagement involved.

          Public policy engagement
        

12.2. Additional information. [Optional]


LEA 13. Companies changing practices / behaviour following engagement

13.1. Indicate whether you track the number of cases during the reporting year in which a company changed its practices, or made a formal commitment to do so, following your organisation’s and/or your service provider's engagement activities.

Do you track number of companies that changed or made a formal commitment to change in the reporting year following your organisation’s and/or your service provider's engagement activities?

13.2. Indicate the number of companies that changed or made a formal commitment to change in the reporting year following your organisation’s and/or your service provider's engagement activities.

Number of companies
% of total portfolio

Individual / Internal staff engagements

3
2 % of total Portfolio

Collaborative engagements

0
0 % of total Portfolio

13.3. Additional information [Optional].


LEA 14. Examples of ESG engagements

14.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

ESG factors
ESG issue
          child labour
        
Conducted by
Objectives

Improve social supply chain standards of Renault.

Scope and Process

We have engaged with Renault about the company’s use and sourcing of conflict minerals since 2012 and in 2017, we also addressed the risk of child labour in the cobalt supply chain.

Outcomes

In December 2017, Renault informed us that it had joined the Responsible Raw Material Initiative (RMI), an initiative developed by the Responsible Business Alliance (RBA, previously known as EICC) to improve the mining sector. The RBA has longstanding experience in developing supply chain due diligence tools and has been the driving force behind the Conflict Free Smelter Initiative. Renault also stated that in regard to conflict minerals, it pursues due diligence in cooperation with suppliers, based on the OECD Guidelines for multinational enterprises, in order to ensure that the company sources minerals responsibly.

ESG factors
ESG issue
          Bangladesh Worker Safety
        
Conducted by
Objectives

Implementation and continuation of commitments by signatories to Bangladesh Accord for Fire and Building Safety’ and the ‘Alliance for Bangladesh Worker Safety’.

Scope and Process

In April 2017 a large group of global investors, coordinated by the Interfaith Center on Corporate Responsibility (ICCR), issued its 4th investor statement, calling upon signatories of the ‘Bangladesh Accord for Fire and Building Safety’ and the ‘Alliance for Bangladesh Worker Safety’ to meet their obligations under the Accord and the Alliance. The statement urged the signatories to keep up the pace of implementation and to commit beyond 2018 to complete the remediation process, to work with other stakeholders to support a living wage for garment workers and to create an environment in which workers can exercise their internationally recognised rights freely. In June, Triodos Research spoke with representatives of H&M and Carrefour, both signatories of the Accord.

Outcomes

During the conversation we learned that the new Accord includes additional commitments to ensure that workers’ rights to freedom of association are respected and that their safty is also protected. It opens the opportunity to broaden the scope of the current Accord into other related industries or suppliers, as suggested in the ICCR letter of April. Although the fund is pleased with the extended Accord, there are concerns about the next phase, beginning May 2018. The Bangladesh government’s support for the Accord activities seems to be decreasing as the Government aims to transfer the functions of the Accord to a national regulatory body. A second concern is the limited number of current signatories that have signed up for the new period. The fund will continue to support the ICCR, beginning in 2018 with a call on current signatories to remain committed to this important process, and to sign up for the new Accord period.

ESG factors
ESG issue
          Climate change
        
Conducted by
Objectives

Stimulate companies to commit to using 100% renewable energy and  to doubling energy productivity before a set deadline.

Scope and Process

We participate in the ‘RE100 investor group’, an engagement project on climate change led by ShareAction, a UK non-profit investor organisation. The project calls on companies to commit to using 100% renewable energy (RE100) and as of 2017, it also calls to commit to doubling energy productivity before a set deadline (EP100). ShareAction has sent letters to the following companies in the investment universe: Adidas, BMW, BNP Paribas, Deutsche Telekom, Ericsson, Ford, GAP, Heineken, PSA (Peugeot Citroën), Roche, and Renault.

Outcomes

In March, AkzoNobel announced its new ambition to commit to using 100% renewable energy by 2050. The company has decided to join the RE100 and is the second-largest electricity user in the RE100, with an annual consumption of around 16 Terawatt-hour. In 2018, ShareAction will continue this engagement, aligning the goals of engagement even more with the 2°C limit set in the Paris Agreement.

ESG factors
ESG issue
          Remuneration
        
Conducted by
Objectives

WPP has experienced shareholder opposition on CEO remuneration since 2011. We aim to stimulate WPP Group to moderate CEO remuneration, which we consider highly controversial.

Scope and Process

We contacted the company in July 2016 and discussed the changes in its new remuneration plan that would be introduced in 2017, the potential outcomes once the vesting period starts (in 2018) and potential adjustments. In addition, we exchanged views and recommendations on remuneration.

The revised remuneration plan that was brought to vote at the AGM in May 2017 shows important improvements, but also some major concerns remained.

Outcomes

Although the company’s current performance is still reason for concern, we decided not to exclude it for its excessive remuneration, because it proved to be open for shareholders’ concerns and it adjusted its policies and moderated its payments as of 2017. Shareholders have shown their appreciation of the company’s efforts by substantally lowering oppose votes, both for policies and practices.

We will however continue to take a critical stand regarding remuneration during our proxy voting and future engagement activities.

14.2. Additional information. [Optional]


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