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Royce & Associates, LP

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

02.4. Additional information. [Optional]

We continue to look for opportunities for collaborative engagement that align with our approach to ESG incorporation.


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

03.3. Additional information. [Optional]

We also conduct in person engagement with companies on our watch list. We may engage with company management on several issues, including those that are E, S and G related, before we become shareholders.


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

04.2. Additional information. [Optional]


LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Indicate whether you do any of the following to monitor and/or review the progress of engagement activities.
Individual / Internal staff 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]

Direct communication with management is an important part of our investment process, and a fundamental part of our approach to responsible investment. Constructive engagements create a forum to discuss business strategy, operations, governance and a wide variety of other issues, such as, but not limited to, ESG issues. This is done with the goal of establishing an open dialogue between our investment team and company management. In addition, we may also engage with other stakeholders such as suppliers and customers as part of our process. Engagements take place both before the initial investment is made and as part of our ongoing monitoring of the positions in our portfolios. The level of direct engagement and the decision to escalate when engagements are unsuccessful are at the discretion of the portfolio manager and may vary based on several factors such as materiality of the issue, the size of the investment and range of potential impacts to the company. At Royce we recognize that ESG issues can affect the valuation and performance of a company. As such, ESG considerations are an underlying influence on all of our engagement efforts.


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

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

07.4. Additional information. [Optional]

At Royce we have an established central research database known as Mackey. All of our research, which includes specific commentary on ESG related factors that may affect a company, and any engagement regarding ESG factors that has taken place is documented, tagged and stored to ensure that it is readily available to the wider investment team.

Insights gained from management engagements can and have been shared with clients through our various insights pieces and during client meetings, conferences and symposiums.


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​

08.2. Additional information. [Optional]

We have established a process and centralized database to track internal staff engagements that is accessible to all investment professionals. At this time the database has not reached 100% adoption however adoption rates continue to increase.


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