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Triodos Investment Management B.V.

PRI reporting framework 2018

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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.

other description

          See LEA 03.3
        

03.3. Additional information. [Optional]

Company alerts (if these companies are selected for sustainable investing) are addressed as top 1 priority. We have a target to pick up alerts within one week. This often involves company contact. We promise our clients that we only invest in companies that meet our strict investment criteria. In case one of our investment criteria is likely to be violated by a company, we contact the company straight away to identify the severity of the issue and the measures a company undertakes to solve the issue.

Our second priority is engagement during the research process. Often company contact is required to determine if a company meets the investment criteria of Triodos. By asking questions we raise awareness for a topic within a company and we therefore consider this form of dialogue also as engagement.

The third priority is thematic engagement . We carefully assess the relevance of a  particular topic for Triodos and the potential impact on the investment universe and make an informed decision about whether or not to pursue an engagement opportunity when it arises. This form of engagement raises an opportunity to set clear engagement goals at the beginning and to measure the outcome of the engagement efforts. In 2016 we focused our thematic engagement activities on Animal welfare, Remuneration, Climate protection and Living wage.

The fourth priority is collaborative engagement. When an opportunity arises, we consider the relevance of the topic and our exposure through holdings. We may choose to be lead investor in contacts with companies that we have holdings in. The size of our holdings does not play a role in our decision making process.

The last priority is our proxy voting activities. The priority of proxy voting is steered by the AGM agenda. We do not have any influence on that. So in terms of priorities the AGM agenda may interfere with other priorities but we allow this to happen because of our aim to vote at all meetings.

Information provided refers to 2017. Please note that, as of April 2018, Triodos Investment Management will bring the asset management of its SRI funds in-house. As of that month, a team of investment analysts will integrate the ESG and the financial performance in their analysis of companies, resulting in the definition of the investment universe. Related organisational changes are being implemented and expected to be fully in place by the end of 2018. See LEA 01.6.


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]

Our main objective for our engagement activities is to motivate change within a company. Engagement efforts can only be successful when the company understands what it is you demand from it and why. Why is it relevant for the investor and why is it considered relevant for the company itself. These engagement efforts often take time. Companies do not change overnight. We generally stop our engagement efforts only when the company shows no responsiveness to our questions or when the company took all recommendations on board and successfully implemented them.

A large part of our dialogue with companies takes place as part of the research process and is focused on gaining insight in corporate ESG implementation processes, to assess compliance with our minimum standards. While doing this, we formulate our questions in such a way that we hope to inspire the companies to address our concerns if this is not already the case. As part of our monitoring process, we will also pose questions when a selected company becomes involved in controversies. When a company does not answer our questions, it may not be selected for investment.

The companies we target for further engagement are companies that are selected for sustainable investment by Triodos. These companies are already doing well. The ESG areas for improvement are therefore never strategic issues, otherwise the company would not have been selected for sustainable investment. Nevertheless, there are always areas for improvement and depending on the urgency and materiality of the topic for the company we will actively follow the progress made by the company.

When we engage with multiple companies on a particular issue outside the research process, we make an engagement plan that includes goals and deadlines. Progress is actively monitored and when sufficient companies take further steps towards sustainability, this may lead to a strengthening of our minimum standards.

For proxy voting we monitor systematically which resolutions have received considerable opposition from shareholders and we track how such resistance has changed company behavior.

Each engagement effort is registered and requires a specific action to be closed by the responsible researcher. Before an action is closed the researcher needs to log whether or not the engagement effort has been successful and if so, what change is made by the company.

Information provided refers to 2017. Please note that, as of April 2018, Triodos Investment Management will bring the asset management of its SRI funds in-house. As of that month, a team of investment analysts will integrate the ESG and the financial performance in their analysis of companies, resulting in the definition of the investment universe. Related organisational changes are being implemented and expected to be fully in place by the end of 2018. See LEA 01.6.


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.

05.3. Additional information [Optional]


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.

06.4. Additional information. [Optional]

In addition to seeking dialogue with individual companies, we also regularly work together with other investors, for example pension funds, to further steer sustainable performance. Partnerships with other shareholders help maximise the effectiveness of actions. We participate in the European Social Investment Forum (Eurosif) and four of its national member organisations (UKSIF, Forum Nachhaltige Geldanlage, Dutch Association of Investors for Sustainable Development and SpainSIF), the International Corporate Governance Network (ICGN), Eumedion and United Nations supported Principles for Responsible Investment (UNPRI). Several of these organisations engage in an active dialogue with listed companies about corporate sustainability or focus on bringing institutional investors together for joint dialogue with companies.

Collaborative engagement efforts may be very time consuming, depending on the role we play as an investor and the number of companies involved. We therefore make a careful assessment before deciding to participate in collaborative engagement, in which we consider the objective and the added value to our minimum standards, and the companies targeted. In collaborative engagement, we focus on companies that are selected for investment by Triodos, but in some cases we may go beyond this.


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]

Our asset managers have access to the Research database in which ESG information can be found on each company. This includes engagement efforts and outcomes that are part of the selection process.

In case our engagement insights have a clear exposure to the financial performance of a company, our asset manager is informed pro-actively.

Information provided refers to 2017. Please note that, as of April 2018, Triodos Investment Management will bring the asset management of its SRI funds in-house. As of that month, a team of investment analysts will integrate the ESG and the financial performance in their analysis of companies, resulting in the definition of the investment universe. Related organisational changes are being implemented and expected to be fully in place by the end of 2018. See LEA 01.6.


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]

All company engagement efforts are tracked in a database. Information that is tracked includes topics for engagement, contact person, reason for engagement, whether or not the engagement is closed and whether or not it has been succesful.


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