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UBS Asset Management

PRI reporting framework 2019

Export Public Responses

You are in Direct - Listed Equity Active Ownership » Engagement


LEA 02. Reasoning for interaction on ESG issues

Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual / Internal staff engagements
Collaborative engagements
Service provider engagements

02.4. Additional information. [Optional]

UBS AM's stewardship policy is our commitment to act as good stewards of assets held and managed on behalf of our clients. We recognise that clients expect us to ensure the alignment of our approach with their own investment beliefs, policies and guidelines. We seek to be active shareholders by encouraging good governance and a high standard of corporate practices.

Our approach involves the following:

  • use of internal information shared upon our proprietary database, external specialist sell-side broker research and ESG rating tools (including MSCI ESG Research, Sustainalytics, Trucost, CDP, RepRisk and ISS ESG)
  • review of proxy voting material ahead of the annual shareholder vote;
  • meetings with company executives and non-executive board members;
  • assessment of the quality of explanations given;
  • monitoring of corporate developments through market news sources and company announcements on an on-going basis.

This approach enables us to identify the factors that drive the company’s value and key risks. Our engagements are prioritized and undertaken dependent on the circumstances and the issues to be discussed. Where we have a significant holding in a company, or have identified an issue with the strategic direction of the company or the performance of management, we will seek to discuss our concerns with the company early in order to minimise the potential loss of shareholder value.

Engagements with company management are undertaken by our investment teams with support from our Sustainable and Impact Investing team. Many of our engagements continue for several years as part of our on-going review process. We maintain a comprehensive database of our meetings with companies, review progress over time and follow-up on issues identified.

Where we believe the effectiveness of engagement and the chance of success can be increased, we are willing to work both formally and informally with collective bodies, or to collaborate with other shareholders.

Depending on the issue and whether the engagement activity is reactive or part of on-going discussions our engagement with issuers can take the following forms:

  • Written communication,
  • Conference calls,
  • Face-to-face meeting

Stewardship is relevant for both active and index (rules based) investments. In the case of actively managed strategies, it facilitates enhanced investment decisions for long-term value creation. For index, or passive strategies, it addresses broader negative externalities to the economy which could cause instability and inefficiencies within the financial markets.

Our stewardship activities are commonly organized according to four pillars:

  • Thematic engagements: these are focused on specific themes considered material, analyzed by available internal and external research and aligned with the overall sustainability and sustainable investment strategy of UBS-AM.
  • Reactive engagements: these are focused upon companies which are involved in serious breaches of international standards, such the Universal Declaration of Human Rights, the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.
  • Engagements around proxy voting decisions: these are undertaken ahead of an AGM or other shareholder meeting to help inform our voting decisions and/or to communicate to companies about our views.
  • Proactive engagements: these are engagements undertaken by our investment analysts and portfolio managers on specific issues related to the business strategy and/or sustainability risks and opportunities that may have a positive or substantial impact on valuation models.

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 engagements.

Indicate the criteria used to identify and prioritise engagements for each type of engagement.
Type of engagement
Criteria used to identify/prioritise engagements
Individual / Internal engagements

Internal / Individual engagements

Collaborative engagements

Collaborative engagements

03.3. Additional information. [Optional]

Where we believe the effectiveness of engagement and the chance of success can be increased, we are willing to work both formally and informally with collective bodies, or to collaborate with other shareholder.  At the same time, we will join a collaborative initiative only in a situation when we have the necessary internal resources to contribute meaningfully to the dialogue with companies and the objectives of the collaboration.

Prior to undertaking any collaboration with other investors we will first review the following:

  • Any action with other investors is permitted by law and/or regulation;
  • There is general agreement amongst investors on issues of concern and potential solutions;
  • Engagement will be private and that any public statements have our prior explicit authorisation;
  • We have the resources to actively contribute to the collaboration and influence the dialogue with target companies.

As part of our collaboration efforts we maintain an active participation in both formal and informal investor networks in order to ensure that we are aware of best practice in the area of corporate governance, social and environmental matters and to improve dialogue between institutional investors and other stakeholder groups.

Examples of collaborative initiatives we have recently supported:

  • We joined Climate Action 100+ and joined 30 coalitions of investors to engage with companies on the transition to a low carbon economy.
  • We joined the PRI working group on SDGs in active ownership to provide content and feedback to a discussion paper on how to include the SDG agenda in engagement activities with companies.
  • We co- signed the Global Investor Statement to Governments on Climate Change (GISGCC) calling for urgent action during COP24. As part of this group of 415 investors representing over USD 32 trillion in assets, UBS AM showed full support for the Paris Agreement, in line with the goals of our climate change stewardship strategy.

LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.
Indicate whether you define specific objectives for your organisation’s engagement activities.
Individual / Internal engagements
Collaborative engagements

04.2. Additional information. [Optional]

LEA 05. Process for identifying and prioritising collaborative engagement

Indicate if you monitor and/or review engagement outcomes.
Individual / Internal engagements
Collaborative engagements
Indicate if you do any of the following to monitor and review the progress of engagement activities.
Individual / Internal staff engagements
Collaborative engagements

05.3. Additional information [Optional]

Successful engagement is often not a one-time discussion and can come in various forms, from performance monitoring to change in company practices and the effectiveness can often only be judged over a period of time. We believe it is important to track and monitor progress against our defined engagement objectives.

All engagements undertaken by both the investment and sustainable and impact investing teams are shared on an internal database, and the information may be incorporated into investment decisions and/or oversight processes. Our analysts and portfolio managers are also able to tag dialogues on ESG issues included in their regular research and meetings with companies.

LEA 06. Role in engagement process

06.1. Indicate whether your organisation has an escalation strategy when engagements are unsuccessful.

06.2. Indicate the escalation strategies used at your organisation following unsuccessful engagements.

06.3. Additional information. [Optional]

There may be occasions when, despite discussions with companies, our concerns have not been sufficiently addressed and shareholder value is at risk. If a company fails to meet our expectations and we are not satisfied through our regular engagement process with the explanations provided, we will seek to escalate our approach. In the first instance, this is likely to be through further discussions with the chairman or other senior non-executives.

In making decisions as to whether to escalate our engagement we will consider the following:

  • The circumstances which have led to our concern,
  • The materiality of the potential negative impact,
  • Best practice standards, including national guidelines,
  • Any explanation provided by the company,
  • The significance of the issue for our clients,
  • Any pattern of concerns over a period of time,
  • The likelihood of success.

If a company consistently fails to meet our expectations or if a company’s ESG disclosures are insufficient to allow for investors to gain an appropriate understanding of a company’s sustainability-related risks, we may decide to vote against management proposals at the shareholder meeting, including the election of board candidates.

Should no progress be made over a period of time we may choose to divest all or some of the shares held on behalf of our clients in active portfolios.


LEA 07. Share insights from engagements with internal/external managers

07.1. Indicate whether insights gained from your organisation's engagements are shared with investment decision-makers.

Type of engagement

Insights shared

Individual / Internal staff engagements

Collaborative engagements

07.2. Indicate the practices used to ensure information and insights collected through engagements are shared with investment decision-makers.

07.3. Indicate whether insights gained from your organisation’s engagements are shared with your clients/beneficiaries.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

07.4. Additional information. [Optional]

All engagements undertaken by both the Sustainable and Impact Investing team and investment teams and the information related to our proxy voting decisions are logged in an internal database. The information may be incorporated by our investment areas into their decision and oversight process. Insights from our engagement programme are included in quarterly client reporting.

LEA 08. Tracking number of engagements

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

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

08.2. Additional information. [OPTIONAL]