ACTIAM engages individually, with other investors, and through a service provider. We strive to engage collaboratively whenever possible, as we believe it is both more efficient and increases our influence over investees. All engagements are tracked in the same database. With respect to service provider engagements, there are roughly three levels of interaction:

- Joint (collaborative) engagements: we have been and are involved in joint engagements, where we are present at all meetings and give input for the scope, process, and objectives of the engagement.

- Bespoke engagements conducted by the service provider: these are typically responsive engagements where ACTIAM sets the objectives and timelines, and sometimes participates in calls. 

- Other (proactive) engagements conducted by the service provider: ACTIAM is not involved in the execution of these engagements, but evaluates whether we want to endorse the engagement and monitors the progress.

Responsive engagements are triggered by violation of ACTIAM's policies. ACTIAM will first determine viability of engagement, considering:

·         the governance and ownership structure. For example, if a company is majority owned by a single family or person, the chances of success of engagement are likely to be smaller;

·         any history of engagement with the company and how responsive the company was in those dialogues;

·         the regulatory and geographic framework. For example, if a company is located in a country with a strong governmental influence and that influence is not headed in the direction of ACTIAM's vision, chances of success are probably smaller;

·         any public responses the company has made if the breach is a result of public controversy, indicating whether it is open to change;

·         whether the company has a reasonable opportunity to change its conduct, products or services. For example, if the responsive engagement process is triggered because of a company's exposure to thermal coal mining, but nearly all of its revenue comes from this activity, chances of a successful change are limited.

Proactive engagements address (systemic) risks and take into account planetary boundaries, social justice, and the materiality of an issue for a sector. When selecting target companies, ACTIAM considers:

·         the governance and ownership structure. For example, if a company is majority owned by a single family or person, the chances of success of engagement are likely to be smaller;

·         any history of engagement with the company and how responsive the company was in those dialogues;

·         the regulatory and geographic framework. For example, if a company is located in a country with a strong governmental influence and that influence is not headed in the direction of ACTIAM's vision, chances of success are probably smaller;

·         any public positions or statements the company has made, in light of (for instance) any public controversy, indicating whether it is open to change;

·         whether the company has a reasonable opportunity to change its conduct, products or services.

Additionally for collaborative engagements:

·         When evaluating the opportunity to passively join a collaborative engagement, ACTIAM's key considerations are whether the topic addressed matches our goals, whether the organizations involved are considered knowledgeable and trustworthy to use ACTIAM's name, and to make sure there is no overlap between existing engagements.

-         When evaluating the opportunity to actively contribute to a collaborative engagement, the key considerations are whether the topic addressed matches ACTIAM's goals, the commitment and resources needed; whether there is sufficient coordination to make the collaboration a success, and whether there is true additional value in contributing to the engagement next to existing engagements

ACTIAM's active ownership policy, updated in 2019, has formalised 3 milestones that an engaged entity can achieve:

0. Engagement not yet commenced, or company has not confirmed to have received our correspondence.

1. Company has confirmed receipt of our correspondence.

2. Objectives of engagement discussed in more detail with the entity.

3. Engagement in progress.

Upon the 3rd milestone, ACTIAM monitors the progress of engagement towards the objectives settled (in milestone 2), updating such progress on a quarterly basis. This information is brought into the quarterly meeting of the ACTIAM ESG Committee and reported to clients as well as externally on ACTIAM's website (aggregated in case of the latter). If circumstances require so, objectives can be revised, however a company not willing to achieve the objectives is not a valid reason for revision. In such cases, in combination with the entity continuing to violate ACTIAM's policies, ACTIAM can consider exclusion of the entity.
Depending on the progress towards the objectives, engagements can be judged as successfully or unsuccessfully closed.

For more information, please see our policy document on active ownership: https://www.actiam.com/48df26/siteassets/4_verantwoord/documenten/en/actiam_sustainable-investment-instruments.pdf

For collaborative engagements, ACTIAM decides whether it will partake actively or passively. Active collaborative engagements can entail both a lead investor role or a supporting investor role with an active contribution, such as the drafting of documents, planning, organisational contributions, etc.

Please also see response under LEA 03.

ACTIAM will evaluate how companies are progressing on the issues identified for engagement. Besides the actions taken at the end of an engagement, there are several escalation strategies that ACTIAM can use to increase pressure during an engagement:

·         Seek allies: ACTIAM can collaborate with other investors to increase leverage.

·         Decrease the ESG score of the company.

·         Make a public statement: ACTIAM can draft a public letter or investor statement, preferably with other investors, calling out the company on its performance and the need for improvement.

·         Vote against management proposals at a shareholders meeting. For example, ACTIAM can vote 'no' on remuneration packages or appointments. In these instances, ACTIAM will share their concerns and intention of voting against the resolution with the company first.

·         Speaking at a shareholder meeting: ACTIAM can choose to visit the shareholder meeting and explain its position, asking the company to improve its performance.

·         (Co)filing a shareholder resolution: this option can be very effective but it is also a complicated, time-consuming and sometimes costly process and the ease of the process differs greatly across jurisdictions. If there is an opportunity to co-file an existing resolution, this option is preferred.

·         Reducing exposure: in case of an active investment proposition, ACTIAM can also consider reducing the size of its investment.
·         Exclusion: an ultimate escalation strategy;  ACTIAM can decide to exclude companies from investment if the (responsive) engagement did not have the expected results, i.e. the company did not improve its performance

Information about engagement progress (both as milestone progress and qualitatively, towards the objects settled) is shared on a quarterly basis with the ACTIAM ESG Committee, comprising the CEO (in the role of Chair), CIO, Head of Fund Management and Head of ESG Research and an external expert who is a Professor of Ethics.

Furthermore, there is an ongoing dialogue about engagements with the investment managers. Both engagement and proxy voting information is shared with investment decision-makers through an internal dashboard, as well as raw data files. The dashboard is updated every quarter with the latest engagement developments and every half year to reflect outcomes of voting.

Engagements can also be conducted together with external investment managers in case that is relevant, for example because of location or language matters.

Clients receive a detailed engagement overview on a quarterly basis; a summary of this overview is also published online. 

For some of our funds (sustainable portfolios), companies which are responsively engaged are not investable.

ACTIAM tracks the number of engagements on an ongoing basis and formally submits them on a quarterly basis to the ACTIAM ESG Committee. The number of engagements, as well as milestone and objectives progress, are also reported to clients and to the public through our website. In the last two years, an annual, additional ACTIAM ESG Committee meeting is held to specific discussed the status and progress of certain engagements. Furthermore, the ACTIAM ESG Committee can be called on an ad-hoc basis when a decision needs to be made immediately, via the FIP Fast track procedure.