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J.P. Morgan Asset Management

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]

As an active investment manager, engagement is an important and ongoing component of our investment process. Frequent and direct contact with company management is critically important, and we have worked to create an investment stewardship approach that aims to improve long-term, sustainable value. We believe that the companies in which we invest should be focused on responsible allocation of capital and long-term value creation.

Identifying whether a risk or opportunity is substantial enough for us to act upon it is a key element in our approach to investment stewardship. We have integrated financially material ESG factors into our active investment frameworks across asset classes. Combining our ESG research capability with the experience and skill of our investment teams and the expertise of our investment stewardship specialists gives us a deep understanding of the risks and opportunities facing different sectors, industries and geographies. By integrating this expertise onto a global common platform, we seek to maintain a consistently high standard of engagement.

By examining the ESG profiles of companies within our investment universe, we can establish the risks, and the materiality of those risks, around a specific sector and location. This helps us to identify outliers and conduct targeted engagements with companies where we believe improvements are warranted. We engage with companies to help us understand the issues they face and support them to adopt best operational and strategic practices.

Where the issues identified relate to long-term sustainability, our investment stewardship team may conduct additional engagement. When we make an assessment of the future path of a company, we consider existing cultural issues, potential changes in regulation, societal matters and economic shifts. We conduct around 700 dedicated ESG engagements with companies around the world each year, in addition to the regular interaction between our investment teams and company leadership.

A key element to our process is actively voting at shareholder meetings. Effective use of our clients' proxy votes is critically important, and we manage the voting rights of the shares entrusted to us in the same way as we would manage any other asset. We actively vote at approximately 8,000 company meetings each year, in 80 markets around the world. We maintain detailed voting policies in each region, based on a mixture of international standards of corporate governance and local market best practice. Our investment teams and investment stewardship specialists in the relevant region are responsible for implementing those policies, taking into account individual circumstances as well as our investor insights, based on their deep knowledge and experience of the country, sector and company.

Our investment-led, expert-driven stewardship process has been developed over our extensive history of active management. It is backed by more than 1,000 investment professionals, based around the globe, and overseen by our investment stewardship team, which consistently monitors good practice to ensure we are achieving our aims, and creates feedback loops into our investment process.


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