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Boston Common Asset Management

PRI reporting framework 2019

You are in Direct - Listed Equity Active Ownership » Engagement

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]

In some cases, we engage at an industry level such as the multi-year industry initiative we have led with the financial sector focused on climate change. In 2014 we launched our investor initiative, known as the "Banking on a Low Carbon Future" engagement. Our 2017 analysis was the first to align its metrics with the new Taskforce on Climate-related Financial Disclosures (TCFD) climate risk framework introduced by Mark Carney of the Bank of England and Michael Bloomberg.

 


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]

We prioritize using a variety of factors.  For example we selected companies to engage in our Eco--Efficiency themes based on a combination of our annual portfolio carbon footprint analysis along with their environmental management practices.  This led to us to adopting a multi-year engagement on Eco-Efficiency engaging our highest carbon portfolio holdings with relatively weaker environmental management practices.  We regularly consult with our clients to prioritize our engagement themes through one-on-one meetings each year with those most actively engaged in the process which has led us to continue to prioritize our engagements with global pharmaceutical companies on their access strategies as well as food and beverage companies on access to nutrition.  Given our large exposure in Japan relative to other Asian regions since 2010 we have developed a robust engagement program focused on general sustainability dialogues with a core group of our Japanese companies with at least trips for in-person meetings with these companies every 12-18 months supplemented by meetings in Boston.  Following our vote against a number of US portfolio companies under our gender diversity guidelines, we selected 8 companies to engage on the Women Empowerment Principles in 2017 and 2018.  An example of our escalation process is when Mohawk was unresponsive to our request to engage in dialogue, we filed a board diversity resolution which was subsequently withdrawn in early 2019.

Under our Banking on a Low Carbon Future, while we did primary research and benchmarked 59 banks on their alignment with TCFD, we prioritized sustained dialogue with a subset of our own portfolio companies in 2018. 


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]

In 2018 we published our second annual Engagement Results Report, Achieving Impact in Global Equities, which highlights our ESG (environmental, social, and governance) performance for the 2017 calendar year. We engaged a total of 277 companies through both individual and collaborative engagements.  As a result of our efforts,  we identified 60 measurable improvements/commitments in corporate policies, processes or products.

 


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]


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]

We engage across the full spectrum of ESG issues, which are relevant to our portfolio holdings, including traditional corporate governance issues such as board diversity and accountability, environmental and social risks and human rights.  Initial ESG research and stakeholder engagement helps us identify which companies to engage during the year and we select priorities based on an assessment of the severity and urgency of the issue(s), and their receptiveness to engagement. Our engagement efforts can take a variety of shapes and sizes depending on which tools or methods best fit the task.  

Where appropriate we also look to collaborate with coalitions of shareholders and activist organizations.  Our collaborative engagements are selected based on a review of the ESG risks and opportunities and the issue's suitability to a wider group of stakeholders.  For example, engagements to encourage disclosure are often a good fit for a collaborative approach. Our membership in bodies such as PRI, CDP and ICCR are a big help in forming these coalitions. 

One example of our escalation policy was when Mohawk was unresponsive to our letter and subseqent request for dialogue under our Women Empowerment Principles engagement, -  We filed a gender board diversity resolution in late 2018, which was subsequently withdrawn in early 2019. 


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]

In our view individual/internal staff engagements tend to surface more directly relevant and actionable information for the investment team. Our investment team members are consulted on a regular basis on engagement priorities and may also actively participate in dialogues with companies to lend their sector- and company-specific expertise. We view this as central to our ESG integration process. 

We report on and share information on our collaborative engagements with Boston Common staff including our investment team, clients, prospects and the general public, particularly benchmarking metrics for companies in similar sectors and broad assessments of sustainability strategies (e.g. scorecards, benchmarking reports, and public index developments). In 2018 examples included The Access to Nutrition Global & US Spotlight indexes, and the collaborative engagement we led around eco-efficiency (reducing energy use, water use and waste).

The full engagement program and outcomes are also shared via our annual impact reports and quarterly Active Investor Social Updates.


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]

While we internally track the total number of engagements, we also discuss a selection of current engagements under each of our strategic engagement themes in our quarterly 'Active Investor' newsletter.  This is sent directly to clients and others and published on our public website.  For our largest clients we develop customized engagement plans and report to them privately on the objectives and progress at least on an annual basis.  

We also publicly report out on all our engagement actively in our annual impact reports including in 2018 on alignment with the Sustainable Development Goals (SDGs).


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