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Impax Asset Management

PRI reporting framework 2019

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG factors [LEI 08 - 10] ESG incorporation in passively managed listed equities [LEI 11] Outputs and outcomes [LEI 12 - 13]
Direct - Listed Equity Active Ownership
Overview [LEA 01] Engagement [LEA 02 - 08] Outputs and outcomes [LEA 09 - 11] (Proxy) voting and shareholder resolutions [LEA 12 - 21]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 12] Implementation processes [FI 01 - 03] (A) Implementation: Screening [FI 04 - 06] (B) Implementation: Thematic [FI 07 - 09] (C) Implementation: Integration [FI 10 - 12] Fixed income - Engagement [FI 14 - 16] Outputs and outcomes [FI 17 - 18]
Direct – Private Equity
Overview [PE 01 - 02] Fundraising of private equity funds [PE 03 - 04] Pre-investment (selection) [PE 05 - 08] Post-investment (monitoring) [PE 09 - 13] Outputs and outcomes [PE 14 - 15] Communication [PE 16]
Direct - Inclusive Finance
Context [IFD 01 - 06] PIIF Principle 1: Range of services [IFD 07 - 10] PIIF Principle 2: Client protection [IFD 11 - 13] PIIF Principle 3: Fair treatment [IFD 14 - 17] PIIF Principle 4: Responsible investment [IFD 18 - 24] PIIF Principle 5: Transparency [IFD 25 - 27] PIIF Principle 7: Standards [IFD 32 - 34]
Confidence building measures
Confidence building measures [CM1 01 - 07]
Export Public Responses
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You are in Direct - Listed Equity Active Ownership » Outputs and outcomes

Outputs and outcomes

LEA 09. Number of companies engaged with, intensity of engagement and effort

Indicate the proportion of companies from your listed equities portfolio with which your organisation engaged with during the reporting year.
We did not complete any engagements in the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)
Proportion of companies engaged with, out of total listed equities portfolio

Individual / Internal staff engagements

121
14

Collaborative engagements

123
15

09.2. Indicate the proportion breakdown of engagements conducted within the reporting year by the number of interactions (including interactions made on your behalf)

No. of interactions with a company
% of engagements
One interaction
2 to 3 interactions
More than 3 interactions
Total
100%

09.3. 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

09.5. Additional information. [Optional]

Impax views engagement as an integral part of the ESG-analysis and the broader investment process. Engagement is fully integrated in our investment process. As such, it is conducted internally through a combination of individual and collaborative initiatives as part of our on-going dialogue with companies. 

LEA 10. Engagement methods

10.1. Indicate which of the following your engagement involved.

specify 

          Advice/guidance. Detailed advice for especially smaller companies regarding establishing material, cost-effective sustainability processes and reporting. Longer-term and in-depth engagements.

10.2. Additional information. [Optional]

For monitoring purposes, email is usually the fastest and most flexible means of communication, however we find that when attempting to encourage companies to e.g. introduce sustainability processes and disclosures, it works well to formulate a letter, explaining the benefits of robust processes and reporting, backed-up by academic research, practical examples and evidence. Most ensuing engagement meetings are conference calls. We find it very helpful to combine engagement letters and calls (often with Investor Relations staff), with company meetings (for example at conferences or Roadshows), which are often led by company CEO/CFO, to enforce the story and also in many cases to create an "internal debate and discussion" regarding the engagement topic. This has often been an effective combination of approaches to instigate change.  

LEA 11. Examples of ESG engagements

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

ESG Topic
Sustainability reporting
Conducted by
Objectives

We filed a shareholder proposal with a U.S. producer of fabricated aluminium products requesting that the company publish a sustainability report describing policies, strategies, performance, and improvement targets on material sustainability issues, including climate change. The company’s operations are highly carbon intensive, and it lacked transparency around material ESG issues.

 
Scope and Process

After a productive dialogue, the company, agreed to publish a sustainability report, which it did in Q1-2019. We withdrew our shareholder proposal, and it did not go to a vote.

 
Outcomes
ESG Topic
Climate Change
Conducted by
Objectives

We filed a shareholder proposal with a small-cap, U.S. property & casualty insurer requesting that the company establish board-level oversight of climate related risks.
Scope and Process

Following a productive dialogue, the company took steps so clarify the Audit Committee’s role in climate risk oversight and articulate this oversight in public company governance documents.

 

 
Outcomes
ESG Topic
Diversity
Conducted by
Objectives

After prior steps to establish a dialogue were unsuccessful, we filed a shareholder proposal with a U.S. financial services company requesting it identify whether a gender pay gap exists among its employees, and if so, outline steps being taken to reduce the gap. Companies in the financials sector have struggled to attract and retain a diverse workforce, and research indicates active management of pay equity is associated with greater levels of diversity in organizations. Conversely, pay inequities present legal, regulatory and reputational risks to companies.

 
Scope and Process

Following dialogue, the company publicly committed to gender pay equity, detailed the processes in place to maintain pay equity and released the results of its most recent pay analysis.

 
Outcomes
ESG Topic
Other governance
Conducted by
Objectives

Engagement with a Hong Kong-based paper recyling company, regarding materiality-based sustainability processes and reporting, but also governance structures. Focus on the effectiveness of board structure. 
Scope and Process

Call with the company IR. We discussed the sustainability processes, but emphasis was on the board structures, the precise role and de facto independence of the 3 independent directors. We highlighted the far from ideal process of having a company executive on the Remuneration Committee. This seemed to be something that the company had not heard from shareholders before and was not fully aware of. The engagement is on-going. 
Outcomes
ESG Topic
Diversity
Conducted by
Objectives

Engagement with a Japanese industrial energy efficiency company regarding management and board diversity. Company had no female directors in place.  
Scope and Process

Sent a letter to the company management, highlighting the benefits of diversity. The letter was followed by a conference call, with several senior representatives from the company. The company said it was difficult to find female directors with the right experience. We suggested the company tries to search from a broader pool of candidates, including e.g. academic backgrounds. The company said they are keen to stay ahead of local best practices.

At the next AGM, the company announced they are appointing their first female director to the company board. 

 
Outcomes
ESG Topic
Plastics
Conducted by
Objectives

Collaborative shareholder engagement, coordinated by a US-based NGO, with a US-based restaurant company regarding their management, processes and targets of reducing single-use plastic packaging, utensils and cups. 
Scope and Process

Company has committed to reducing the use of plastic straws (or providing non-plastic straws) and are developing alternative solutions for the coffee-cup lids, but company did not address clearly any new solutions for the single-use coffee cups. 

The US organisation, backed by a number of shareholders filed a shareholder resolution in 2018, to request the company to strengthen their processes and targets relating to single-use plastics in their operations. 

Engagement is on-going. 

 
Outcomes
ESG Topic
General ESG
Conducted by
Objectives

Engagement with US midcap efficient agriculture machinery company, to encourage the establishment of materiality-based sustainability processes and disclosures. We believe this can enhance company value over the long term. This engagement had a significant educational element to it. Collaborative shareholder group explained the concept of materiality, introduced the SASB and its Materiality Map to the company, suggested which metrics may be most sensible and material and hence best to focus on for the company and provided a list of peer companies that have robust, but cost-effective sustainability processes and disclosures in place.
Scope and Process

We sent a detailed letter outlining why robust sustainability processes and disclosures makes business sense for companies, followed by a status and "educational" call with the company CFO, who is also on the newly formed Sustainability Committee at the company. This was followed by a 1.5-hour meeting with the CFO, to further discuss best practices for material sustainability processes and reporting. The company reported its first sustainability report in 2018 and we have given feedback on it. 
Outcomes

11.2. Additional information. [Optional]

Top down strategic engagement priorities for 2019:​

 

1. Climate

  • Focus on physical climate risks as part of our TCFD commitment
  • Processes, management and transparency of climate risks

 

2. ESG processes and transparency

  • Encouraging development of material sustainability processes and disclosures, particularly among smaller companies

 

3. Global governance best practices

  • Tax practices and transparency
  • Governance structures and diversity
  • Asian governance

 

4. Diversity & Pay Equity

  • Focus on information technology and financials companies where women remain significantly underrepresented and more likely to leave at midcareer
  • Pay inequity poses risk (regulatory, litigation and reputational); active management pay equity leads to better diversity outcomes
  • Main focus on US companies where regulation supporting pay equity transparency is lacking

 
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