This report shows public data only. Is this your organisation? If so, login here to view your full report.

AMP Capital Investors

PRI reporting framework 2019

Export Public Responses
Pdf-img

You are in Indirect – Manager Selection, Appointment and Monitoring » Monitoring

Monitoring

SAM 05. Monitoring processes (listed equity/fixed income)

05.1. When monitoring managers, indicate which of the following types of responsible investment information your organisation typically reviews and evaluates

ESG objectives linked to investment strategy (with examples)

Evidence on how the ESG incorporation strategy(ies) affected the investment decisions and financial / ESG performance of the portfolio/fund

Compliance with investment restrictions and any controversial investment decisions

ESG portfolio characteristics

How ESG materiality has been evaluated by the manager in the monitored period

Information on any ESG incidents

Metrics on the real economy influence of the investments

PRI Transparency Reports

PRI Assessment Reports

RI-promotion and engagement with the industry to enhance RI implementation

Changes to the oversight and responsibilities of ESG implementation

Other general RI considerations in investment management agreements; specify

None of the above

LE

ESG objectives linked to investment strategy (with examples)
Evidence on how the ESG incorporation strategy(ies) affected the investment decisions and financial / ESG performance of the portfolio/fund
Compliance with investment restrictions and any controversial investment decisions
ESG portfolio characteristics
How ESG materiality has been evaluated by the manager in the monitored period
Information on any ESG incidents
Metrics on the real economy influence of the investments
PRI Transparency Reports
PRI Assessment Reports
RI-promotion and engagement with the industry to enhance RI implementation
Changes to the oversight and responsibilities of ESG implementation
Other general RI considerations in investment management agreements; specify
None of the above

05.2. When monitoring external managers, does your organisation set any of the following to measure compliance/progress

ESG score or assessment

ESG weight

ESG performance minimum threshold

Real world economy targets

Other RI considerations

None of the above

LE

ESG score
ESG weight
ESG performance minimum threshold
Real world economy targets
Other RI considerations
None of the above

If you select any 'Other' option(s), specify

*Responsible Investment Leaders

ESG oversight for AMP Capital's RIL range of funds is the responsibility of the RIL Ethics Committee. This includes overseeing our underlying managers' compliance with the RIL Charter, ensuring portfolio holdings continue to fit the RIL Charter, and guiding managers on company engagements. Regular (monthly or quarterly) ESG reporting is also required on areas including:

  • Confirmation the portfolio does not invest in any company with material exposure to areas of high social impact
  • A summary of the proportion of the portfolio invested in companies characterised as industry 'Leaders', 'Sustainers' and 'Unengaged' companies, in absolute terms and compared to the relevant Index.
  • An outline of any ESG engagement with portfolio companies
  • A summary of any other ESG-related issues
  • Voting statistics including the number of resolutions where the manager voted for and against company management, and abstained from voting
  • Reasons why the manager abstained from voting or voted against company management.

05.3. Provide additional information relevant to your organisation's monitoring processes of external managers. [OPTIONAL]

          AMP Capital may monitor and review FDF and ipac managers ESG practices through periodic surveys and or one on discussions, which may cover:  

• Policies relating to the manager's approach to assessing ESG performance of investee companies  
• Whether the firm is a signatory to the PRI. (If not, we ask for what the firm thinks about the PRI initiative.)  
• Summaries of their PRI assessments (if they are prepared to provide them)  
• Whether the manager is a signatory to other collaborative organisations or principles on ESG  
• How the firm integrates the consideration of ESG information into the investment process, how ESG is considered in research and analysis, and impact on portfolio construction  
• Primary internal and external sources of ESG information and research (e.g. analysts, internal specialists, brokers), how that data is incorporated into the investment process, and any proposed future changes  
• How the manager encourages companies to improve ESG disclosure  
• Proxy voting policies, including who has approved it and is responsible for implementation  
• Whether the manager receives external or independent advice on voting, from whom and to what extent they follow the service provider's advice  
• Processes for lodging proxy votes (e.g. via third parties)  
• An overview of voting activity and direction of votes cast (% of votes exercised, for, against, abstain, not voted)  
• Proportion of engagements considered successful and a list of ESG topics engaged on, and  
• Public policy engagement including collaborative engagements and any actions taken.  

In addition, AMP Capital has undertaken a review of specific voting practices of external equities managers. We also held extensive engagements with a selection of external equities managers to discuss in detail their ESG integration and company engagement practices as well as AMP Capital's intention to introduce firm-wide exclusions as part of our ESG policy. 

Manager review process 
Markets and their participants are dynamic and constantly evolving. Accordingly, the strategies underlying each single sector fund are continually refined to ensure the right blend of managers is in place. The ongoing review process incorporates: 

• Managing the managers. Strong lines of communication between the investment team and each underlying manager are vital. Members of the investment team regularly meet with the investment team of each underlying manager. Additionally, each underlying manager is subject to a formal onsite review on an annual basis.  

• Monitoring risk at both manager and fund levels and ensuring diversification. The team has visibility of the portfolio holdings of all managers in each fund. These positions are also run through the risk evaluation and style analysis systems (BARRA and Style Research) for equity portfolios. This risk analysis provides valuable insight into whether the individual manager’s portfolios and the total portfolio are operating as expected. Risks such as the commonality of active positions across managers and other correlation factors are monitored in this way. This process is useful in ascertaining whether any unintended risks are arising in the portfolio. In addition, we use scenario testing to establish sensitivity of our equities funds to certain types of market conditions. All risk analysis is conducted by our Global Investment Reporting & Analytics  Team which operates independently from the investment team. The Global Investment Reporting & Analytics Team presents this analysis quarterly to portfolio managers and to other internal parties at formal risk review forums. Independent Mandate Monitoring and Exposure Management teams ensure that the underlying strategies are within their allowable trading ranges and mandate. The investment team is immediately notified if and when there is a breach of the mandate terms and contact is made with the external managers to determine if further actions are warranted. 

The managers within the RIL funds are monitored by the asset class specialists, the AMP Capital Single Sector Investment Committee and the RIL Ethics Committee. These groups are charged with maintaining the Fund’s responsible investment integrity and overseeing the overall operation of the Fund. Specific tasks include analysing the ongoing performance and style of the underlying managers (from a financial perspective) as well as the stock listings and governance and engagement initiatives (from a responsible investment perspective). 

The RIL Ethics Committee is accountable for responsible investment integrity, corporate governance and engagement. The RIL Ethics Committee meets three times a year and performs two key tasks: 
• Overseeing the RIL Balanced Fund’s investments to ensure they reflect the relevant responsible investment objectives; and 
• Providing input on matters of priority for corporate engagement and governance, where environmental, social, ethical or labour standard issues are relevant using research from AMP Capital and external providers. 

In performing its key tasks, the RIL Ethics Committee refers to the guidelines outlined in the Responsible Investment Leaders Charter of Operation. Its membership includes sustainable investment professionals from within AMP Capital and client representatives. 

If a company fails to meet AMP Capital’s responsible investment standards, internal policy dictates that the relevant manager must sell its investment in the particular company within six months. This policy is closely monitored and enforced. If there is a breach of the policy, the services of the relevant underlying manager may be terminated. If there are major changes to companies such as takeovers or serious environmental incidents, the policy provides that managers may review individual companies. A company may also be sold at any time for financial reasons. 

The RIL Ethics Committee reviews approximately 60 stocks every year held by the managers to make sure the stocks they hold are consistent with the RIL Charter. Any inconsistencies or requests for further information are then raised with the manager by the portfolio managers of the RIL funds, which leads to further discussion about the way ESG is incorporated in each managers’ mandate. The RIL Ethics Committee also reviews every managers’ approach to ESG integration on a rolling basis. 

For example, if you require your external managers to undertake carbon portfolio monitoring, you are strongly encouraged to report this here.
        

SAM 06. Monitoring on active ownership (listed equity/fixed income)

06.1. When monitoring managers, indicate which of the following active ownership information your organisation typically reviews and evaluates from the investment manager in meetings/calls

Engagement

Report on engagements undertaken (summary with metrics, themes, issues, sectors or similar)

Report on engagement ESG impacts (outcomes, progress made against objectives and examples)

Information on any escalation strategy taken after initial unsuccessful dialogue

Alignment with any eventual engagement programme done internally

Information on the engagement activities’ impact on investment decisions

Other RI considerations relating to engagement in investment management agreements; specify

None of the above

LE

Report on engagements undertaken (summary with metrics, themes, issues, sectors or similar)
Report on engagement ESG impacts (outcomes, progress made against objectives and examples)
Information on any escalation strategy taken after initial unsuccessful dialogue
Alignment with any eventual engagement programme done internally
Information on the engagement activities’ impact on investment decisions
Other RI considerations relating to engagement in investment management agreements; specify
None of the above

If you select any 'Other' option(s), specify

ESG oversight for AMP Capital's RIL range of funds is the responsibility of the RIL Ethics Committee. This includes overseeing our underlying managers' compliance with the RIL Charter, ensuring portfolio holdings continue to fit the RIL Charter, and guiding managers on company engagements. Regular (monthly or quarterly) ESG reporting is also required on areas including:

  • Confirmation the portfolio does not invest in any company with material exposure to areas of high social impact
  • A summary of the proportion of the portfolio invested in companies characterised as industry 'Leaders', 'Sustainers' and 'Unengaged' companies, in absolute terms and compared to the relevant Index.
  • An outline of any ESG engagement with portfolio companies
  • A summary of any other ESG-related issues
  • Voting statistics including the number of resolutions where the manager voted for and against company management, and abstained from voting
  • Reasons why the manager abstained from voting or voted against company management.

 

(Proxy) voting

Report on voting undertaken (with outcomes and examples)

Report on rational of voting decisions taken

Adherence with the agreed upon voting policy

Other RI considerations relating to (proxy) voting in investment management agreements; specify

None of the above

LE

Report on voting undertaken (with outcomes and examples)
Report on voting decisions taken
Adherence with the agreed upon voting policy
Other RI considerations relating to (proxy) voting in investment management agreements; specify
None of the above

If you select any 'Other' option(s), specify

Future Directions Funds and ipac funds

AMP Capital may monitor and review FDF and ipac managers ESG practices through periodic surveys and or one on discussions, which may cover:

  • Whether the manager is a signatory to other collaborative organisations or principles on ESG
  • How the firm integrates the consideration of ESG information into the investment process, how ESG is considered in research and analysis, and impact on portfolio construction
  • Primary internal and external sources of ESG information and research (e.g. analysts, internal specialists, brokers), how that data is incorporated into the investment process, and any proposed future changes
  • How the manager encourages companies to improve ESG disclosure
  • Proxy voting policies, including who has approved it and is responsible for implementation
  • Whether the manager receives external or independent advice on voting, from whom and to what extent they follow the service provider's advice
  • Processes for lodging proxy votes (e.g. via third parties)
  • An overview of voting activity and direction of votes cast (% of votes exercised, for, against, abstain, not voted)
  • Proportion of engagements considered successful and a list of ESG topics engaged on, and
  • Public policy engagement including collaborative engagements and any actions taken.

SAM 07. Percentage of (proxy) votes

07.1. For the listed equities for which you have given your external managers a (proxy) voting mandate, indicate the approximate percentage (+/- 5%) of votes that were cast during the reporting year.

100 %

Specify the basis on which this percentage is calculated.

07.2. For the listed equities for which you have given your external managers a mandate to engage on your behalf, indicate the approximate percentage (+/- 5%) of companies that were engaged with during the reporting year.

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

07.3. Additional information [OPTIONAL]

          For many years, AMP Capital has offered our clients the ability to invest in a range of multi-manager funds. These funds are designed to provide a single investment solution, blending a range of specialist investment managers in a single fund.  

These funds aim to provide diversification across asset classes, manager types and manager styles, with the aim of achieving growth with smoother returns by negotiating the ups and downs of the market.  

As AMP Capital actively manages the selection of investment managers (for multi-manager funds), we are constantly assessing and implementing new opportunities with the potential to improve the risk and return outcomes of clients' portfolios.  

External managers exercise votes on the shares they hold on our behalf. However, AMP Capital also monitors the voting and where there may be concerns e.g. with regard to a specific governance issue, we can choose to override votes cast by engaging with  the external manager. Further, AMP Capital also undertakes periodic reviews of our external managers with regard to their approach to considering ESG issues. Where possible, we also seek opportunities to meet and discuss their approaches to voting and ESG integration more broadly, including engagements.  

In order to better monitor the votes cast by our external managers (multi-manager platform) AMP Capital has arranged 'real-time' view-access of their voting activities. We are therefore able to monitor real-time voting activities of all portfolios managed exclusively for AMP Capital.  

In 2018, our approximately 50 external equity managers submitted votes on 48,151  unique resolutions at 4,673 individual company meetings. Of the total number of voting instructions cast, 80% were in support of company resolutions (i.e. 'with management'), with 8% against, 1% abstain. Mixed (10%) and Other (1%) account for votes where individual managers may vote differently from each other. 

If you require your managers to vote on your behalf, you may for example wish to comment on a variety of reasons why managers choose not to vote, including:
• strategic decision not to vote on certain types of assets or funds;
• operational or timing constraints; • share-blocking;
• conflicts of interest;
• administrative impediments (e.g. power of attorney requirements);
• voting fees;
• geographical restrictions (non-home market);
• insufficient information; and/or
• overall cost effectiveness.
        

Top