Our general appraoch to active ownership is covered in Quoniam‘s Repsonsible Investment Policy whereas regarding the Engagement Policy we refer to the policy of our parent company (see LEA 01.2).
We believe that a long-term investment approach, where we work together with corporates to help them become sustainably successful, holds value. Quoniam is an active manager, also when it comes to controlling the assets we hold on behalf of our clients, and representing the interests of our clients to companies. This active engagement approach, designed to avoid risks and encourage sustainable conduct, is put into practice two-fold – in constructive dialogue with companies, and at annual general meetings, to which we submit proposals and vote in line with our clients' values ('proxy voting').
Our first engagement priority is being a responsible and active asset manager, and positively influencing companies on ESG risks and opportunities. We aim to encourage good corporate governance and make a positive contribution to the long-term increase of enterprise value and shareholder value. These engagement activities are downstream to any investment. For the sake of effectiveness, we collaborate with other companies of the Union Investment Group for engagement cases. Therefore, our Voting Policy is based on the corresponding policy of the Union Investment Group.
Our engagement process comprises three phases: In the first, pre-engagement phase, we identify which pain points of a given company can be addressed through engagement. The two levers in the following, actual engagement phase are: proxy voting and direct, constructive dialogue. In the post-engagement phase, we assess the results of our activities and potential consequences on a regular basis. The time horizon in this is rather long-term it may take years for changes to become visible. If a company does not react or take action (or does so inadequately), despite repeated engagement activities, the company will be excluded from the investment universe as a last resort. Interim and final results of our engagement activities are documented and controlled.
With the three building blocks of screening, integration and engagement we are able to construct a portfolio for our clients in line with their investment principles and understanding of sustainability – which we then manage actively, applying quantitative methods. In all this, we adhere to the individual agreements we have with each of our clients.
Issues that are regularly addressed by our service provider at annual general meetings and in company dialogues include:
- Implementation of TCFD requirements
- Implications of the ARUG II
- Request for CO2-emission reduction with respect to the two-degree alignment
- Inclusion of SDG into the corporate dialogue
- CSR-initatives, ESG-initiatives (FAIRR, WDI etc.) and ESG-integration
- Plastic waste
- Climate risks in the transportation sector
- Animal welfare and nutrition
Furthermore, we are in the process of signing the "Climate Action 100+" investor initiative. Signatories of this initiative collaborate to ensure the world's largest corporate greenhouse gas emitters take necessary action on climate change.
We report on our engagement activities for the mutual QFS SICAV funds managed by Quoniam (management company Union Investment) on a quarterly basis, as well as on client demand. These reports include information on our voting behaviour and a summary of our activities.