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Robeco

PRI reporting framework 2020

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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]

Robeco actively uses its ownership rights to engage with companies on behalf of our clients in a constructive manner. We believe improvements in sustainable corporate behavior can result in an improved risk return profile of our investments. Robeco therefore engages with companies worldwide, in both our equity and credit portfolios. Robeco focuses its engagement activities with companies on material Environmental, Social and Governance issues which create long term shareholder value.


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]

Robeco selects engagement themes in an annual selection process. This process involves our investment teams, our clients and RobecoSAM's sustainability investing research analysts, next to the Active Ownership team. We focus our engagement on long-term, financially material ESG factors that can affect a companies' ability to create value. Achieving impact on the UN Sustainable Development Goals is also an important consideration in our value engagement approach.

We select the companies for engagement based on their exposure to the engagement topic, favoring those companies with the highest exposure for the program. Sector coverage and client holdings are another important factor for case selection. We select three to five new themes every year and on average we include ten companies per engagement theme. Three of Robeco's value engagement themes run continuously, Sound Environmental Management, Sound Social Management and Good Governance. These themes are meant for individual cases on request of portfolio managers or clients, on a topic specific to a certain company, or for following up on voting activities.

In addition, Robeco's enhanced engagement program focuses on companies involved in controversial behavior. This includes companies that severely and structurally breach principles of the United Nations Global Compact in the areas of human rights, labor, environment and anti-corruption, and/or the OECD Guidelines for Multinational Enterprises. In case the engagement is unsuccessful, the respective company will become candidate for exclusion from the investment universe of Robeco.


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]

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.


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

05.3. Additional information. [Optional]

Recognizing the value of different forms of engagement, Robeco carries out individual engagements as well as collaborative engagements with other investors or institutions. Robeco acts collectively in its engagements with other investors when this is appropriate. For instance, we believe that the best way to promote improved market practices is through active membership in collaborative platforms such as International Corporate Governance Network (ICGN), United Nations Principles for Responsible Investment (UN PRI), Eumedion, European Fund and Asset Management Association (EFAMA), and European Sustainable Investment Forum (Eurosif). For each of these platforms, we identify and prioritize our collaborative engagement activities within these memberships. A number of relevant memberships are listed below:

  • Principles for Responsible Investment
  • United Nations Global Compact
  • EFAMA
  • Swiss Sustainable Finance (SSF)
  • SASB Standards Advisory Group (SAG)
  • Sustainable Finance Geneva (SFG)
  • Eurosif
  • World Benchmarking Alliance (WBA)
  • Global Reporting Initiative (GRI)
  • Sustainable Value Creation platform
  • ICCR
  • VBDO
  • Invest Europe
  • NVP (Dutch Private Equity Association)
  • IIGCC (Institutional investors Group on climate change)
  • CDP (Carbon disclosure project)
  • Portfolio Carbon Accounting Financials  (PCAF)
  • Portfolio Decarbonisation Coalition (PDC)
  • Transition Pathway Initiative
  • UNEP FI
  • GRESB
  • DNB Sustainable Finance initiative
  • Plastic Solutions Investor Alliance
  • City to Sea Partnership
  • Access to Medicine Index
  • Farm Animal Investment Risk & Return (FAIRR)
  • Human rights investor alliance
  • Business Benchmark on Farm Animal Welfare
  • ZSL-SPOTT Palm Oil benchmark
  • Social & Human Capital Protocol
  • Roundtable on Sustainable Palm Oil (RSPO)
  • Platform Living Wage Financials (PLWF)
  • 30% Club
  • International Corporate Governance network (ICGN)
  • Eumedion Dutch governance platform
  • Asian Corporate Governance association (ACGA)
  • AMEC (Brazilian Corporate Governance Association)
  • Global impact investing network (GIIN)
  • SDG Investment initiative
  • Impact Management Project
  • EDGE Certification Foundation
  • Global Steering Group on Impact Investing (GSG) – Foro Impacto
  • Global Impact Platform

 


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 believe that a constructive dialogue with the companies in which we and our clients invest is more effective than excluding companies from our investment universe. If enhanced engagement does not lead to the desired change, Robeco or its clients can decide to exclude a company from its investment universe. However, Robeco considers exclusions from the investment universe to be an action of last resort, applicable only after engagement, our first and preferred option, has been undertaken. However, there are instances where escalation may be necessary.

Using enhanced engagement, we escalate our dialogue with companies on specific topics. Enhanced engagement follows a breach of minimal norms of behavior and can finally be escalated with an exclusion from the investment universe of a company that does not improve its ESG behavior after the engagement has concluded. In both value and enhanced engagements, a lack of responsiveness by the company can be addressed by seeking collective engagement, attending a shareholder meeting in person, or sharing written concerns with the board, and can lead to adverse proxy voting instructions on related agenda items at a shareholder meeting. An enhanced engagement can finally be escalated with an exclusion from the investment universe of a company that does not improve its ESG behavior after the engagement has concluded.


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.

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]

Robeco has an integrated sustainability investing framework. 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. Clients receive multiple forms of reporting on both qualitative descriptions of engagement activities and quantitative indicators on the engagement progress made. As well as text-based reporting to share granular updates on engagement individual activities with a company, our confidential engagement reporting also shows the overall progress of a company against the set engagement objectives, and how each company's progress compares to that of the peer group.

Collaboration and information sharing with Robeco's Investment teams is an important aspect of Robeco's engagement approach. Each time Robeco's Active Ownership team is in contact with a company under engagement, Robeco's Investment teams are informed and invited to join the dialogue taking place. In addition, for each engagement activity, Robeco's Active Ownership team prepares extensive reporting on the topic of the dialogue, what was discussed, their assessment of the company's progress, and what steps the company still needs to take for the engagement to be closed successfully. These Active Ownership Profiles (AOP's) are then shared with all investment teams via multiple channels including Robeco's in house knowledge sharing platform FINI. This ensures that Robeco's investment teams always have the most up to date information on the status of our current engagements, the information from which can subsequently be factored into investment cases.


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]

The Active Ownership team tracks all of the engagement cases in our value and enhanced engagement programs. These cases are reported on a frequent basis, including status changes on the pre-defined SMART objectives. If we support other investors by co-signing letters to companies outside the program, we typically do not consider these as engagement cases. Only if we have defined specific goals with SMART objectives, we place such engagements in our program.


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