The pre-engagement stage and associated research serves to lay the groundwork and generate ideas for Union Investment's engagement activities. Together with more than 45 sectoral analysts, Union Investment's sustainability team (15 analysts) discusses the sustainability-related problems and weaknesses associated with the companies. External data providers such as MSCI ESG Research, Vigeo imug/EIRIS, RepRisk, and Trucost are also drafted in for assistance.
An important basis for Union Investment's engagement process is its sustainability research, which is managed with the aid of SIRIS: SIRIS is a special IT platform that was developed for Union Investment in order to efficiently implement our proprietary approach to sustainability research and broaden our range of socially responsible investing (SRI) services, including engagement. SIRIS has been used by our portfolio managers since August 2013 and is controlled by the sustainability team.
As described in LEA 02.4, Quoniam collaborates with other companies of the Union Investment Group for engagement cases. The Union Investment Group, through its ESG team capabilities, serves as a central intra-group service provider and uses the following criteria to identify and prioritise engagements for each type of engagement:
The ESG topics for our engagement projects are derived from incidents of misconduct by a company (i.e. a violation of one of the aforementioned principles), from analyses and their findings to dialogue with our sustainability team and our sector analysts. Information provided by our stakeholders and clients can also be taken into account in the selection of topics.
When deciding which topics and investee companies to prioritise, we consider a range of factors such as the relevant holdings in our funds, negative lists, company contacts and the general extent of our influence.
Quoniam is actively involved in defining the geographical and contextual scope of engagement activities and topics addressed. Quoniam's internal SRI staff, including the dedicated SRI coordinator are regularly attending meetings of the Union Investment Group ESG team and are reporting on progress to Quoniam’s SRI Committee.