For both our value and enhanced engagement program, we determine engagement objectives at the start of the engagement process. This is used to establish the starting point for individual companies, to keep the engagement focused, and to efficiently address the most material ESG factors. For each theme, SMART (Specific, Measurable, Attainable, Relevant, Time-bound) engagement objectives are defined. These are then shared with investee companies. We track progress against the engagement objectives set. This forms a key part of the engagement theme research stage, and ensures that we begin engagement with a thorough understanding of the materiality of the ESG issue in question, the company's current performance on and exposure to the issue, and their baseline performance on the engagement objectives set.
Each time we are in contact with a company, we discuss the progress towards the objectives. We then assess the progress a company made towards each of the objectives, and we adjust the progress level. Based on the developments observed, we decide between four levels of progress, both on an objective level, and on an overall progress level. At the start of the engagement trajectory, we define a threshold for each company for the number of objectives that should be met. When the company reaches the threshold, we will close the engagement case successfully.