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ACTIAM

PRI reporting framework 2019

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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

78
2

Collaborative engagements

563
14

Service provider engagements

169
4

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

09.4. Indicate the percentage of your service provider engagements that you had some involvement in during the reporting year.

Type of engagement

% of engagements with some involvement
  Service provider engagements

09.5. Additional information. [Optional]

In cases where we are not sure of the number of contacts, for example collaborative engagements where we're not the lead investor, we have assumed that one interaction has taken place in the year. 


LEA 10. Engagement methods

10.1. Indicate which of the following your engagement involved.

specify

          Meetings with NGOs about the companies' conduct
        

10.2. Additional information. [Optional]

All engagements start with an email or letter and invitation for further dialogue. Whenever possible and relevant, we try to meet with higher management or the board. In 2018, we visited the operations, suppliers and NGOs involved in palm oil production in Malaysia and Indonesia.


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
Other

specify

          
        
Conducted by
Objectives

We contacted companies that conduct animal testing to understand in which cases this is done and what the company is undertaking to shift to alternative ways of testing.

Scope and Process

We contacted 15 companies; all the companies in our investment universe and in the relevant sectors. We started with emails and followed up with further contact when needed. The information that we have gathered will inform us for the next step, which is to decide whether we should keep these companies in our investment portfolio, based on our animal welfare policy.

Outcomes
ESG Topic
Plastics
Conducted by
Objectives

We joined an investor and foundation group to combat plastic pollution. 

Scope and Process

This group initially focuses on four major FMCG companies that have a large plastic footprint. 

Outcomes
ESG Topic
Climate Change
Conducted by
Objectives

To improve practices around shale gas production.

Scope and Process

We contacted the company based on our energy transition policy. We received very minimal response, and the company stated they were not open for further dialogue. We also took note that the possibilities for influencing the company were small because of the governance and ownership structure, with a single majority shareholder.

Outcomes
ESG Topic
Sustainability reporting
Conducted by
Objectives

For real estate companies to report using the GRESB tool

Scope and Process

We contacted five companies that are in our investment universe but do not report to GRESB. GRESB is a tool that allows us to compare sustainability information for real estate companies. We wanted to understand what the hurdles were and what the companies are doing in terms of sustainability of their assets. Three companies responded very quickly and gave us interesting insights into why they do not use this tool. Two responded later. We will continue dialogue with these companies with the aim of deciding whether we should keep them in our investment portfolio.

Outcomes
ESG Topic
Water risks
Conducted by
Objectives

We are collaborating with our service provider in engaging companies on water risks.

Scope and Process

The target list covers several sectors and regions. Besides companies at risk, we have also contacted sector leaders to better understand what steps they took. Some companies have changed their practice and / or disclosure during this process. The engagement will conclude with a final study of business practice of the companies.

Outcomes
ESG Topic
Climate Change
Conducted by
Objectives

To increase disclosure and improve practice related to methane management, targeting oil and gas companies.

Scope and Process

We are a lead investor in the PRI Methane engagement group. The group focuses on companies in the oil and gas sector. We have spoken to the company at their head office once and have had further dialogue via email. 

Outcomes
ESG Topic
Human rights|General ESG|Health and Safety|Labour practices and supply chain management|Anti-bribery and corruption|Other governance
Conducted by
Objectives

The change objectives for this engagement (conducted by our service provider for ACTIAM): 

  • The company should be encouraged to conduct, and provide details on, a due diligence/audit and assessment of the company’s and third-party sales teams
  • The company should ensure the most cost-effective medicines are made available in all markets
  • The company should disclose how anti-bribery and corruption measures are integrated into their sales and marketing procedures. The company needs to have an effective whistle-blowing system, which it should monitor and report upon.
Scope and Process

The scope concerns one large multinational.

As the company is involved in several and exceptional controversies, the change objectives are wide. The issues are related to marketing & advertising, product safety & quality, and bribery & fraud. Since the start of the (bespoke) engagement to discuss the fines and investigations on product safety and illegal marketing, we have not succeeded to enter this dialogue. A number of the email addresses on their website and other publications were either not functioning or have not responded. A telephone call was made to its headquarters in the US and an email address obtained. A limited email exchange followed, but the company has yet to provide either data or agree to a conference call. Given the current status of the company, we will advise to our ESG Committee to exclude the company since the controversies are not solved and the company is not open for a dialogue. 

Outcomes
ESG Topic
Executive Remuneration|Company leadership issues|Anti-bribery and corruption
Conducted by
Objectives
  • The company should put in place measures to ensure that its corporate culture does not encourage excessive risk-taking and promotes positive business conduct
  • Design and have in place procedures for monitoring its corporate culture
Scope and Process

The engagement scopes one company and a majorly owned subsidiary.

Our service provider is in an active dialogue with the company and the company has been willing to discuss efforts that it has taken to ensure that it is fostering a positive corporate culture. A Corporate Culture and Conduct Programme has been set up and our help is requested and used to make this. The company is taking reasonable steps to escalate the oversight of its issue within the organisation. 

Outcomes
ESG Topic
Human rights|Cyber security
Conducted by
Objectives

The company should ensure that it puts in place adequate internal controls and risk management procedures to manage cybersecurity risks.

Scope and Process

The service provider has established a dialogue with the company and they are very willing to engage with shareholders in relation to the 2017 cybersecurity incident. The company has committed to enhancing its risk management process and internal controls and has already made a number improvements.

The company has announced that in 2019 it will spend additional USD 200 million for security and technology. In addition, it has appointed new Chief Information Security Officer and Chief Technology Officer and implemented new governance structure to regularly communicate risk awareness to the board of directors and senior management and to enhance the visibility of cybersecurity risks at top management level.

Outcomes
ESG Topic
Executive Remuneration|Company leadership issues|General ESG|Sustainability reporting|Other governance
Conducted by
Objectives

This engagement is focused on the following objectives:

- encourage greater diversity in terms of skills, background and gender on the board;

- ensure that the company continues to monitor culture throughout the organisation; and

- encourage the company to continue to integrate its ESG focus into its business model.

Scope and Process

In 2018, the engagement largely focused on board composition and risk management. In terms of board composition, board skills, diversity and succession planning are discussed. We have also focused on risk management, especially in terms of how the company is handling emerging risks, such as cybersecurity, which is a high risk to the financial industry.

The company has developed a well-defined ESG approach and is integrating it into its business model. It has also committed to enhancing diversity at board-level. The next step is to meet with company representatives ahead of the 2019 AGM

Outcomes

11.2. Additional information. [Optional]

ACTIAM uses the following milestone scheme to track engagement progress.

  • Milestone 0: New engagement/objective
  • Milestone 1: Initial communication sent and receipt acknowledged by company
  • Milestone 2: Objectives discussed with company in more detail
  • Milestone 3: Company responds with relevant engagement information or commits to raising the issues internally
  • Milestone 4: Company develops and discloses (to us or publicly) a credible strategy or sets clear targets to address the issues
  • Milestone 5: Company demonstrates that the strategy is being implemented or that targets have been achieved
  • Engagement "Closed": Company is monitored for ongoing compliance/progress

The above engagements were selected because they reflect our focus on the natural resource sectors (mining, oil& gas, food, beverages & tobacco, and forestry), as well as the difference between our proactive and responsive strategies. When engaging companies proactively, we often take up a number of issues where sector leaders have yet to achieve best practices. In our responsive approach, we focus on critical concerns that pose immediate reputational and financial risks for investors.


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