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Robeco

PRI reporting framework 2020

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Fixed income - Engagement

FI 14. Engagement overview and coverage

14.1. Indicate the proportion of your fixed income assets on which you engage. Please exclude any engagements carried out solely in your capacity as a shareholder.

Category
Proportion of assets
Corporate (financial)

14.2. Indicate your motivations for conducting engagement (Corporate, Financial fixed income assets)

Corporate (non-financial)

14.2. Indicate your motivations for conducting engagement (Corporate, non-financial fixed income assets)

14.3. Additional information.[OPTIONAL]

Robeco is a strong proponent of responsible investment in the belief that sustainability is a long-term force for change in markets, countries and companies, and can have an important impact on future performance. As a part of this proposition, the aim of Robeco's Active Ownership activities is be active owners of the companies in our portfolios, by engaging with companies with the aim of maximizing the long-term value of their investments. The outcomes of our engagement efforts are communicated to our analysts, portfolio managers and clients, enabling them to incorporate this information into their investment decisions.

Our overall approach to engagement is based on:

  • Engagement with companies in our clients' portfolios
  • SMART (Specific, Measurable, Attainable, Relevant, Time-bound) engagement objectives and progress tracked quarterly
  • Promoting market best practices through active membership in collaborative platforms such as ICGN, PRI, Interfaith Centre for Corporate Responsibility (ICCR), the Carbon Disclosure Project, ACGA and Eumedion
  • Providing detailed confidential engagement reports directly to the client, as well as reports that are suitable for distribution/reporting to the client's own stakeholders (i.e. pension fund beneficiaries)

Robeco separates its engagement activities into two distinct programs:

Value Engagement: A proactive approach focusing on material sustainability themes that have the most potential to mitigate downside risk. These themes are selected in close cooperation with Robeco's analysts and portfolio managers located around the globe, based on the financial materiality analysis conducted by RobecoSAM's sustainability investing research team. By discussing sustainability risks and opportunities with companies and providing them with insights into investors' expectations of corporate behavior, we encourage them to adopt better practices. We believe companies with sustainable business practices can create a competitive advantage and are more likely to be successful over the long run, ultimately contributing to the risk-return profile of their securities.

Enhanced Engagement: Focusing on companies that severely and structurally breach principles of the United Nations Global Compact and/or the OECD Guidelines for Multinational Enterprises. Enhanced engagement might ultimately lead to exclusion of a company from our investment universe if it does not improve its ESG behavior and does not lift the breach(es), after our engagement.

Building on our founding philosophy that every investment strategy should be research driven, we undertake extensive research for every engagement we undertake, always focusing on the most material ESG factors which drive long term company performance. We do this in that belief that engagement with companies in which we and our clients invest will have a positive impact on both long-term investment results and on society.

Whilst company engagement is primarily coordinated through Robeco's Active Ownership team (AO team), Robeco's Credit analysts are involved across the entire lifecycle of an engagement, from theme selection and engagement research, to the actual engagement process itself. In 2019, there were joint calls with various companies about ESG issues. These calls generally increase the analyst's understanding of the companies and the way they deal with ESG related issues. Examples are conversations with food producers on risks related to obesity, discussions with car manufacturers on product quality supply chain management, and utilities companies on climate risk management. For 2020 a number of engagement themes have been selected. These themes include mining, biodiversity, decarbonization, incentive structures, and corporate governance in emerging markets. Project groups have been formed consisting of AO specialists, credit analysts, equity analysts, and colleagues from the SI research team from RobecoSAM. By setting up calls with companies, and combining knowledge from the various disciplines, the credit analysts involved increase their understanding of the companies and the way they deal with ESG related issues.


FI 15. Engagement method

New selection options have been added to this indicator. Please review your prefilled responses carefully.

15.1. Indicate how you typically engage with issuers as a fixed income investor, or as both a fixed income and listed equity investor. (Please do not include engagements where you are both a bondholder and shareholder but engage as a listed equity investor only.)

Select all that apply
Type of engagement
Corporate (financial)
Corporate (non-financial)
Individual/Internal staff engagements
Collaborative engagements
Service provider engagements

15.2. Indicate how your organisation prioritises engagements with issuers.

Select all that apply
Corporate (financial)
Corporate (non-financial)
Size of holdings
Credit quality of the issuer
Duration of holdings
Quality of transparency on ESG
Specific markets and/or sectors
Specific ESG themes
Issuers in the lowest ranks of ESG benchmarks
Issuers in the highest ranks of ESG benchmarks
Specific issues considered priorities for the investor based on input from clients and beneficiaries
Other

15.3. Indicate when your organisation conducts engagements with issuers.

Select all that apply
Corporate (financial)
Corporate (non-financial)
We engage pre-investment.
We engage post-investment.
We engage proactively in anticipation of specific ESG risks and/or opportunities.
We engage in reaction to ESG issues that have already affected the issuer.
We engage prior to ESG-related divestments.
Other, describe

15.4. Indicate what your organisation conducts engagements with issuers on.

Select all that apply
Corporate (financial)
Corporate (non-financial)
We engage on ESG risks and opportunities affecting a specific bond issuer or its issuer.
We engage on ESG risks and opportunities affecting the entire industry or region that the issuer belongs to.
We engage on specific ESG themes across issuers and industries (e.g., human rights).
Other, describe

15.5. Indicate how your organisation ensures that information and insights collected through engagement can feed into the investment decision-making process.

Select all that apply
Corporate (financial)
Corporate (non-financial)
Ensuring regular cross-team meetings and presentations.
Sharing engagement data across platforms that is accessible to ESG and investment teams.
Encouraging ESG and investment teams to join engagement meetings and roadshows.
Delegating some engagement dialogue to portfolio managers/credit analysts.
Involving portfolio managers when defining an engagement programme and developing engagement decisions.
Establishing mechanisms to rebalance portfolio holdings based on levels of interaction and outcomes of engagements.
Considering active ownership as a mechanism to assess potential future investments.
Other, describe
We do not ensure that information and insights collected through engagement can feed into the investment decision-making process.

15.6. Additional information.[OPTIONAL]

Please refer to: https://www.robeco.com/en/insights/2020/01/biodiversity-and-mining-among-engagement-themes-for-2020.html 

 


FI 16. Engagement policy disclosure

16.1. Indicate if your publicly available policy documents explicitly refer to fixed income engagement separately from engagements in relation to other asset classes.

16.2. Please attach or provide a URL to your fixed income engagement policy document. [Optional]

16.3. Additional information [OPTIONAL]

This engagement policy is designed to provide an engagement guidance for any company we are invested in as a shareholder or a credit holder.

Our enhanced engagement program does not differentiate between investment styles or asset classes and is aimed to set minimal norms for expected behavior in relation to the UN Global Compact.

For our value engagement approach, our aim is to add value and to improve the risk/return profile for our investments. In all cases, we take the approach of a long term investor, either from a shareholder or a credit perspective. The majority of our engagement objectives are intended to add value for a broad set of investment portfolios and stakeholders. Our focus areas for engagement are as a long term shareholder and a bondholder are often aligned.

However in some instances there may be a difference in focus. For example, differences in engagement objectives between different investment styles or asset classes can be identified. At the start of a new engagement, themes/projects, and key stakeholders are identified, which include clients and portfolio managers.

Depending on the relevant stakeholders, engagements may have a specific portfolio approach. Engagements for credit portfolios are likely to be focused on down side ESG risks whereas engagements for equity portfolios are more likely to focus on both ESG risks and opportunities and shareholder rights.


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