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Robeco

PRI reporting framework 2020

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You are in Direct - Listed Equity Active Ownership » Outputs and outcomes

Outputs and outcomes

LEA 09. Number of companies engaged with, intensity of engagement and effort

Indicate the proportion of companies in your listed equities portfolio with which your organisation engaged 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

204
20.78

Collaborative engagements

25
1.77

09.2. Indicate the 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 in which you were the leading organisation during the reporting year.

Type of engagement

% leading role
  Collaborative engagements

09.5. Additional information. [Optional]

Robeco's Active Ownership team tracks engagement activity on several levels, including; company, engagement case, and moments of contact (activities). In 2019, the Active Ownership (AO) team engaged with 229 companies on 255 engagement cases meaning that we have engaged with some companies on more than one engagement case. As a standard process we design relevant engagement objectives, start with research, and have multiple moments of contact. For those companies with less than 3 interactions during 2019, this was due to these engagement cases starting towards the end of 2019. For 11 companies out of 25 collaborative engagements Robeco took the lead.


LEA 10. Engagement methods

10.1. Indicate which of the following your engagement involved.

(specify)

          Attending AGMs
        

10.2. Additional information. [Optional]

Engagement starts with ESG research, which can be a thematic company profile, an engagement case based on breaches of minimal norms, or an investment case. Engagements usually start by explaining our engagement objectives to a companies' Investor Relations department via e-mail, letter or phone call, followed by conference calls or meetings with technical experts. Examples of such experts are the Head of Risk Management, Head of Sustainability, Head of Supply Chain Management and wide variety of operational experts. Company roadshows are used when available, but in most cases, we reach out to companies as opposed to the other way around. Depending on how important the issue is for the company, senior management (Board Secretary, CFO, COO, or CEO) may also be involved in our discussions. Finally, if Investor Relations are non-responsive to an engagement invitation, we approach senior management directly. The use of visits to company operations depends on the type and topic of engagement. Roadshows are used when available, but most of the time we reach out to companies instead of the other way around. We monitor the amount of activity per engagement case, making sure cases are engaged comprehensively.


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
Climate Change
Conducted by
Objectives

Our engagement objectives are based on the drivers that shape the new energy world. We have divided the objectives into having a future-proof business strategy, striving for operational carbon-efficiency, assessing asset portfolio resilience and working on product stewardship. We also added public policy as an objective as we believe that companies should, at the very least, not lobby against stricter climate change regulation.

Scope and Process

Robeco has been engaging with companies in the oil and gas sector since 2016. In that time, we have seen fundamental changes taking place as companies grapple with the shifting future of their industry. As our engagement theme comes to an end, we can see that some progress has been made. There is a marked difference in preparedness for a low-carbon energy transition between companies in Europe versus the US and Rest of the World. The European companies are better engaged with the transition and are more successfully taking the necessary steps to limit their exposure to climate risks than other companies. This could be a timing effect with European companies responding earlier to normative pressure and regional economic incentives. All our engagements with European companies were closed successful, however a more mixed picture exists for the rest of the engaged companies

Outcomes
ESG Topic
Shareholder rights
Conducted by
Objectives

Our engagement objectives were focused on shareholder value, Board composition and structure, Audit Function, Corporate Culture, Communication with Investors, and Shareholder rights and alignment of interests

 

Scope and Process

In the second half of 2015 Robeco conducted an extensive piece of research on the current nature and developments of corporate governance in Japan. This research served as the starting point for our engagement project on ‘Corporate Governance in Japan.’ With this engagement project we aimed to fulfil our stewardship responsibilities, as specified in the Japanese Stewardship Code. After three and a half years of engagement, we report that some progress has been achieved. Based on our initial objectives at the start of the engagement with Japanese companies, we can broadly conclude that engagement was effective in improving corporate disclosure and communication and fairly effective in winning more rights for shareholders. However, results we more mixed when we escalated the engagement challenge into areas like board composition and shareholder value.  

Outcomes
ESG Topic
General ESG
Conducted by
Objectives

This engagement aims to improve the companies' sustainable production practices. By the end of our engagement program in December 2021, we expect the selected palm oil producers to reach at least 50% of RSPO certified plantations. Our other objectives are centered around Environmental and social management, Governance and reporting, and Controversies and stakeholder management.

Scope and Process

At the beginning of our engagement we conducted a baseline research to benchmark companies according to the amount of RSPO certified land owned by each producer. We will continue this screen on an ongoing basis to monitor progress. Using the results of this screen, engage with all producers identified as having 20% to 80% of land RSPO certified. The main goal of this three-year program is to support companies in improving their performance on material sustainability. After one year of engagement, progress has been made with several companies, however at the same time one company has resigned as a member of the RSPO and as such, has been added to Robeco’s exclusion list. 

Outcomes
ESG Topic
Aggressive tax planning
Conducted by
Objectives

In 2016, Robeco started an engagement project on corporate tax practices, focused on pharmaceutical, media and tech companies. Our goal is to enhance the accountability and transparency of tax practices and rests on four sub-objectives: 1) Tax reporting and disclosures, 2) Policy and principles, 3) Regulatory impact assessments and 4) Tax governance and systems.

Scope and Process

Robeco began its engagement program on tax transparency to gain a better understanding of how this complex and often controversial issue could affect portfolio companies. Our initial engagement framework was designed together with PwC, with whom we conducted our baseline research. Since then, the fiscal world has changed, and many of the transparency problems around taxation remain unchanged. Disclosures on taxation help investors more effectively calculate a company’s long-term sustainable tax rate. This is important because cash flows are reported on an after-tax basis, and so the effective tax rate becomes a relevant indicator for investors in determining true profitability.

After three years of talking to fiscal departments and tax specialists, the results of our engagements are mixed. Most listed companies are willing to contribute to discussions on taxation, and we have seen improvements in policies and guidelines. At the same time, companies whose disclosures prompt the most questions are the least willing to show their colors, but the onus is not only on companies. There are few investors who ask for additional tax disclosures, and several governments also seem to have little incentive to push the needle.

Outcomes
ESG Topic
General ESG|Health and Safety|Labour practices and supply chain management
Conducted by
Objectives

Since 2016, Robeco has engaged with companies active across the meat and fish supply chain, ranging from animal nutrition companies and meat producers, to quick service restaurants and retailers. Our objectives have been to improve animal welfare, aquaculture practices, labor standards, product quality and safety, and innovation.

Scope and Process

56% of our engagements have been closed successfully, including all the EU-based companies and the majority of Northern American companies.  Most companies work to use safer ingredients, reduce the use of antibiotics and expand vegan/vegetarian options. From a labor standard point of view, successes have been booked. However, the global demand for meat remains an area of concern with regard to, in particular, animal welfare and deforestation. The latter will be important topic in our new engagement theme on biodiversity. 

Outcomes

11.2. Additional information. [Optional]

More information is available via the link below:

https://www.robeco.com/en/insights/?t=Active+Ownership+Report


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