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Lombard Odier

PRI reporting framework 2020

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Overview

LEA 01. Description of approach to engagement

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

01.1. Indicate whether your organisation has an active ownership policy (includes engagement and/or voting).

01.2. Attach or provide a URL to your active ownership policy.

01.3. Indicate what your active engagement policy covers:

General approach to Active Ownership

Engagement

Voting

01.4. Do you outsource any of your active ownership activities to service providers?

01.6. Additional information [optional]

During 2019 we published our first engagement policy for assets managed by LOIM, which embodies and gives shape to our stewardship approach and expectations for the companies we invest in across our internally managed fixed income assets . It also discusses how we are likely to approach and react when faced with different ESG and sustainability considerations relating to companies business models/activities and business practices. More importantly, during 2019, Lombard Odier created the Sustainable Investment Research, Strategy & Stewardship team (SIRSS). The SIRSS team is responsible for identifying, analysing and mapping material sustainability challenges that are likely to affect the viability of companies' business activities and models, thereby highlighting sustainability-related actionable intelligence on risks and opportunities for the analysts and PMs to engage with. The team maps the exposure of different sectors and industries to sustainability challenges  and companies' susceptibility to those challenges, working in close collaboration with the investment teams and the ESG team. The SIRSS team is also responsible for carrying out and coordinating our strategic objectives on stewardship, through engagement and voting. It engages and collaborates with investee companies to promote sustainable business practices and models that enhance the long-term value of our clients' assets. The team discharges its voting duties by applying our voting policy and ensuring consistency in our approach.

Escalating our engagement is done on a case-by-case basis, and any decision will depend on the severity of the issue, the engagement history (ie whether the company has been responding well to our concerns), previous voting, and immediate controversies affecting the stock. Any decision to use tactical voting, to file a shareholder proposal or divest will require input from the Portfolio Manager, stewardship team and Stewardship Committee. As mentioned previously, 2019 saw the significant expansion of our active ownership capabilities. In line with this, we continue to develop and build on our active ownership framework and activity. Amongst other areas, we are currently writing our engagement and voting escalation strategy, which will be the public codification of our approach to escalating concerns in the past. We note that the recently created Stewardship Committee will be the final decision maker for escalation matters. We also intend to formalise our policy for all internally managed assets, including those of our private client unit.

During 2020, we intend to formalise our engagement policy for all internally managed assets, including those of our private client unit.


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