STEWARDSHIP CODE - INVESTOR FORUM
We discussed the IF's response to the UK Stewardship Code consultation during the period. We also hosted an IF presentation to our fund management department. During this session our fund managers were interested in how we could improve overseas collaborative efforts, recognising the effective work that the IF had done in the UK.
2020 STEWARDSHIP CODE CONSULTATION: i) Participated in investor outreach by the IA to obtain views on the 2020 Code. ii) Jupiter is represented on the IA's Stewardship Framework Reporting Working Group, which is an investor collective looking developing best practice around Stewardship Code reporting.
ASSET MANAGEMENT TASKFORCE - STEWARDSHIP WORKING GROUP: AMT was designed to encourage greater dialogue between the government, the industry and the FCA to ensure the UK asset management industry continues to deliver for consumers and the wider economy. The Stewardship Working Group (of the AMT) will consider how the Asset Management Taskforce can promote and enhance the UK as a centre of excellence for stewardship. Jupiter is represented on the Working Group. Discussions are ongoing but so far the role of stewardship has been discussed as well as focusing on stewardship across other asset classes (namely fixed income).
INVESTMENT ASSOCIATION - SHAREHOLDER RIGHTS DIRECTIVE II
We engaged with the IA policy team on SRDII and our views on significant vote reporting, namely that market practice should not just develop to use this to highlight voting against but in terms of in-depth stewardship it is important to retain flexibility as to why managers are voting in favour of certain motions.
Jupiter are engaged with the UK Investment Association and have an active position on the Responsible and Sustainability Committee. The role of the committee is to grow awareness, help shape understanding and potential development standards around Responsible and Sustainable Investment amongst its members and the wider investment community.
EUROPEAN FUND & ASSET MANAGEMENT ASSOCIATION - SHAREHOLDER RIGHTS DIRECTIVE II
As above participated in a regulatory conversation with regards to SRDII requirements. We echoed the points above about significant vote disclosure.
FINANCIAL REPORTING COUNCIL
Participated in FRC's investor outreach programme about the new Code. The new Code was supposed to be published in summer 2019 but this was pushed back to October 2019. However, the FRC re-engaged with investors and our Vice Chairman and Head of Governance & Sustainability met with the FRC to discuss progress and impart our views on the feedback that had been provided on certain areas.
JAPAN FSA, Ministry of Finance and Ministry of Economy, Trade and Industry
Conversations centred on the JAPAN FEFTA (Foreign Exchange and Foreign Trade Act). On initial inspection we viewed the proposals to amend the provisions where foreign shareholders have to file a 'pre-acquisition notification' from 10% of a company (in a restricted sector) to 10%.
GLOBAL INVESTOR STATEMENT ON CLIMATE CHANGE
Jupiter was a signatory to the Global Investor Statement to Governments on Climate Change in advance of the UN Secretary General's Climate Action Summit in New York in September 2019. The statement called on governments to phase out thermal coal power worldwide, put a meaningful price on carbon pollution, end government subsidies for fossil fuels, and update and strengthen nationally determined contributions to meet the emissions reduction goal of the Paris Agreement.
SEBI and BSE Ltd (India)
We engaged with the Indian financial markets regulator and stock exchange to inform them of suspected violations of listing rules with regards to proxy voting and shareholder meetings. These communications resulted in investigations and enforcement actions on the matters raised by both bodies.
Environmental Protection Agency (EPA)
We co-signed a collective investor statement facilitated by the Interfaith Center on Corporate Responsibility on the need for continued regulation of methane in the oil & gas industry, which was sent to thirty-five upstream and mid-stream oil & gas companies, including BP and Shell. In total 140 institutions including members of the Institutional Investors Group on Climate Change (IIGCC) representing over $5 trillion in AUM were signatories. The statement was published in response to concerns regarding the Environmental Protection Agency's (EPA) proposed rollback of oil and gas methane emission regulations. We considered the case put forward by the proponents and agree with the central point that the long-term role of oil and gas in the global energy mix will be influenced by the extent to which the oil and gas industry reduces its emissions of methane, a potent greenhouse gas. In response to the statement, BP issued a public response stating their support for the direct regulation of methane emissions by the EPA. Shell issued a public response detailing their opposition to the rollback and the communication of this stance to the EPA. We continue to monitor the outcome of these regulatory developments.
Joint letter to Senior Audit Partners of Shell, BP and CRH
We signed a joint shareholder letter sent to the Audit Committee Chairmen and Auditors of these systemic carbon emitting companies seeking enhanced disclosures demonstrating that the groups' financial statements appropriately incorporate material climate-related risks. The companies have announced measures to address climate risks following engagement with members of the Institutional Investors Group on Climate Change and the Climate Action 100+ investor initiative. The letter sought to ensure that their strategic responses flow through into the different elements of financial reporting and are appropriately reflected in the accounting and audit process. We saw merit in participating as the group's engagement objectives are aligned with our own priorities. These concerns were also raised by the same engagement group with the Financial Reporting Council (FRC).