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HESTA Super Fund

PRI reporting framework 2020

You are in Direct - Listed Equity Active Ownership » Engagement

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

02.2. Indicate whether your organisation plays a role in the engagement process that your service provider conducts.

02.3. Indicate the role(s) you play in engagements that your service provider conducts on your behalf.

02.4. Additional information. [Optional]

HESTA believes that we can most efficiently and effectively influence company ESG practice, performance and/or disclosure through the use of specialist engagement service providers. Each of the specialist engagement service providers represents a number of institutional investors and therefore often represents a meaningful investment in the company with which they are engaging.

HESTA has appointed Hermes Equities Ownership Services (Hermes EOS) to undertake engagement with companies held by our international equities managers. We have appointed the Australian Council of Superannuation Investors (ACSI) and Regnan Governance Research and Engagement (Regnan) to undertake engagement with companies held by our Australian equities managers.

  • Hermes EOS helps institutional share owners around the world to meet their fiduciary responsibilities and become active owners of public and private companies and represents more than £389 billion in assets under management.
  • ACSI is a collaborative membership organisation of 39 Australian and international asset owners and institutional investors, with over $2.2 trillion under management.
  • Regnan provides ESG engagement services on behalf of long term investors with AUD$304 billion under management.

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

Service-provider engagements

Service-provider engagements

03.3. Additional information. [Optional]


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
Service-provider engagements

04.2. Additional information. [Optional]

On an annual basis, HESTA reviews each service provider's Engagement Plan and discusses it with them to ensure that the plan:

  • Outlines a robust process for identifying and prioritising ESG issues and/or companies with which to engage.
  • Identifies the priority companies and key ESG issues (or vice versa depending on the service providers approach) for engagement and the rationale for engagement.
  • Outlines behaviour change objectives and measurable targets for each company to be achieved over a specified timeframe e.g. 3 months, 6 months, 1 year, 3 years, 5 years etc.
  • Outlines a robust process for identifying and prioritising ESG issues or company behaviours that arise during the period warrant engagement (i.e. process of reactive engagement).

HESTA places particular emphasis on ensuring there are robust processes for identifying and prioritising companies and/or ESG issues for engagement. We believe that the right processes will ensure that the right companies and/or ESG issues will be identified and prioritised.

In 2018 HESTA began development of our own engagement plans. the purpose of these plans is not to replace our service-providers, but to effectively act as a filter, facilitating focus on issues of strategic importance and companies of strategic importance to HESTA.

HESTA's plan guides our involvement in collaborative engagement, ensuring that we participate in engagements that are strategic to HESTA and where we have capacity for influence, and also that engagement objectives are aligned to the material issues that we have identified.


LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Collaborative engagements
Service-provider 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
Service-provider engagements

05.3. Additional information. [Optional]


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]


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

Service-provider 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

Service-provider engagements

07.4. Additional information. [Optional]

Insights gained from our engagements are shared with HESTA's internal investment managers and analysts on an ad hoc basis. In addition, from time to time, the applicable internal investment analyst participates in engagements arranged by our engagement service provider with a particular company.

Insights shared with HESTA's internal investment managers and analysts are communicated to the applicable external investment managers through the regular manager review meetings (to the extent possible, given that most of the engagement service providers undertake their engagements on a confidential basis and limit the extent to which HESTA can share this information outside of our organisation).

From time to time our engagement service provider Hermes EOS provides examples of engagement successes that can be communicated publically. 


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

Service-provider engagements

08.2. Additional information. [Optional]

HESTA receives regular reports from service providers on the volume of activity and progress observed.


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