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Generation Investment Management LLP

PRI reporting framework 2020

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]

It is worth noting that we invest in businesses we believe are high-quality and run by management teams who are focused on long-term objectives. Therefore, we do not typically engage with our companies to bring about material change. Instead, we tend to have ongoing constructive dialogue with management teams we know relatively well.

That said, no company is perfect. There are times when we seek to engage with management teams in order to encourage change. Such engagement is often specific to individual companies. However, there are some topics which may affect multiple companies in our portfolio and on our Focus List.


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 staff engagements

Individual / Internal staff engagements

Collaborative engagements

Collaborative engagements

03.3. Additional information. [Optional]

We seek engagement on an individual basisbut,subject to careful legal analysis around “concert party”, “group” and related regulator issues, we consider collective engagements. There has been one issue which we felt collective engagement was appropriate. The issueposeda significant risk toa number ofour focus list companies to the extent that wefelt wecouldhave more of an impact joining with other investors than if we were to act alone. We helped form a collective engagement group of investors via the UNPRI Collaboration Platform (formerly Clearing House), taking both a supporting and leading role. We continue to Chair the group today, and engage a wide range of stakeholders around the issue.We recognise that as participants in the capital markets we have an opportunity and responsibility to work with other investors to protect and enhance shareholder value in line with our collective clients’ best interests. As a firm, we supporta number of initiatives which are focused on strengthening the integration of sustainability within capital markets.


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 staff engagements
Collaborative engagements

04.2. Additional information. [Optional]


LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Collaborative engagements
Indicate whether you do any of the following to monitor and/or review the progress of engagement activities.
Individual / Internal staff engagements
Collaborative engagements
          Our Collaborative engagement occurs via the UNPRI collaboration platform.
        

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.

          Escalation has include all of the above, however we do this on a case-by-case basis and are not formulaic.
        

06.3. Additional information. [Optional]


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 that information and insights gained through engagements are shared with investment decision-makers.

          Investment analysts and portfolio managers conduct engagement so it is naturally integrated as part of our process.
        

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]

It is the same group of investment analysts and portfolio managers that undertake our stewardship activities. In baking it into our process in this way, it naturally means that it drives investment decisions. Topics for engagement are those that we believe are material to our thesis on a company. The investment team meets at least on a daily basis to update the broad group on companies, and uses this forum as a way to communicate learnings from company engagement. These meetings also serve as "brainstorming" sessions in terms of the topics the group need further comfort on, and the best ways to approach it with the company and other stakeholders.

In terms of client communications, we coomunicate engagement progress and examples on an annual basis.

References to collaborative engagement refers to our focus on Palm Oil, which we identified in 2010. We realised that although the FMCG companies that we cover play an important role in the procurement side of Palm Oil, creating a sustainable Palm Oil industry ultimately requires coordination from many different stakeholders including growers, processors, traders and governments.

We founded a collaborative engagement group via the UN PRI investor network now known as the Investor Working Group (IWG), which aims to mobilise investors and use their influence to promote a sustainable palm oil industry through applying the framework set out by the RSPO.

A partner at Generation, Mark Mills, chairs the IWG. Mark shares the progress and insights gained from the work of the IWG internally with the Firm via internal mechanisms in place for firm-wide communication.


LEA 08. Tracking number of engagements

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

Type of engagement
Tracking engagements
Individual/Internal staff engagements​

Collaborative engagements

08.2. Additional information. [Optional]

Regarding individual engagements, we track the number of meetings and calls with management, although do not always identify the topics discussed for every conversation.


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