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AEGON Asset Management

PRI reporting framework 2020

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Outputs and outcomes

LEA 09. Number of companies engaged with, intensity of engagement and effort

Indicate the proportion of companies in your listed equities portfolio with which your organisation engaged during the reporting year.
We did not complete any engagements in the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion of companies engaged with, out of total listed equities portfolio

Individual / Internal staff engagements

492
11

Collaborative engagements

54
2
Service-provider engagements
18
1

09.2. Indicate the breakdown of engagements conducted within the reporting year by the number of interactions (including interactions made on your behalf).

No. of interactions with a company
% of engagements
One interaction
2 to 3 interactions
More than 3 interactions
Total
100%

09.3. Indicate the percentage of your collaborative engagements in which you were the leading organisation during the reporting year.

Type of engagement

% leading role
  Collaborative engagements

09.4. Indicate the percentage of your service-provider engagements in which you had some involvement during the reporting year.

Type of engagement

% of engagements with some involvement
Service-provider engagements

09.5. Additional information. [Optional]


LEA 10. Engagement methods

10.1. Indicate which of the following your engagement involved.

10.2. Additional information. [Optional]


LEA 11. Examples of ESG engagements

11.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

ESG Topic
Climate Change
Conducted by
Objectives

As part of our thematic engagement on climate change, Aegon was part of an investor group who collaboratively aim to increase transparency around the topic of climate change, and to set clear benchmarks for ESG performance in the Oil and Gas sector. In this context we also approached Shell.

Scope and Process

The Engagement: As part of the investor group, we joined several meetings and calls with Shell in the course of 2018 and met with top executives of the company at their headquarters in the Hague.

The outcome: As a result of the collaborative engagement this year and in former years (where we voted for a climate resolution to make Shell work harder on their climate ambitions) Shell announced plans to set short-term targets as part of a long-term ambition to reduce the Net Carbon Footprint of its energy products. The company plans to link these targets to executive remuneration. Shell will set the target each year for the following three- or five-year period. The target setting process will start from 2020 and will run to 2050. Shell is planning to link these targets and other measures to its executive remuneration policy. The revised remuneration policy will be voted on by shareholders at the company’s Annual General Meeting in 2020.

Outcomes
ESG Topic
Health and Safety
Conducted by
Objectives

Aegon is a member of the Investors of Opiod Abuse (IOPA). This initiative calls on boards of manufacturers, distributors and retail pharmacies to adopt or strengthen corporate governance practices that improve board independence, accountability and oversight related to opioid risks.  As part of the governance reforms, the IOA requests an independent board director investigation into compliance, compensation, and board practices relating to opioid risks. Moreover, they stand for the adoption of a misconduct clawback provision, enhanced political lobbying and spending disclosure as well as the separation of chair and CEO positions. Shareholder resolutions calling for these kind of reforms are filed consequently by members of the IOPA as companies are failing to improve. In this context, we have provided our support by helping to present proposals to shareholders at the Annual General Meetings (AGMs) of Mylan and Mallinckrodt.

Scope and Process

At both AGMs, the IOPA proposals  about compensation clawback policies received a majority vote and so did another shareholder resolution filed at Mallinckrodt, which called for expanded lobbying disclosure. After various IOPA dialogues, Mallinckrodt decided to support  it. The resolution ended up receiving 80% of votes, and it was the first time a company has come out in support of a lobbying shareholder proposal. The step to file a resolution became necessary after attempting constructive direct dialogue with companies over a longer period of time. In December 2019 MNK announced plans to update its Incentive Compensation Clawback Policy (ICCP) and to develop and publish a report on the board's oversight of risks related to the opioid crisis in the U.S. The company's ICCP will be updated to include a provision requiring the company to annually disclose the recoupment of any incentive compensation from senior executives undertaken in the previous fiscal year.  A summary of these changes is disclosed in the company's proxy statement to be filed next year, in conjunction with the 2020 AGM. In addition, the board published a report in Q1/2020, describing its approach to oversight of opioid-related matters.

Outcomes
ESG Topic
Climate Change
Conducted by
Objectives

Move BHP towards setting emission reduction targets linked to management remuneration, properly disclose lobbying activities and potentially end industry associations which are not aligned with the Paris goals.  Crucial issue: BHP is board member of Coal21 which developed a big pro-coal campaign and BHP said they were not aware of it. We have together with other investors raised higher expectations on BHPs Industry association memberships, reporting and follow up action on climate-friendly corporate lobbying of the company.

Scope and Process

As member of Climate Action 100+ and also bilaterally we have engaged BHP on their business supplying iron ore, copper, oil, gas, and coal. We attended a meeting with the company and other investors to discuss our concerns as well as a resolution they were facing with respect to these. After some intense dialogues, the company issued an industry association membership report evaluating where they found misalignment. Regarding Coal21 BHP also announced to refocus the initiative and hold active oversight of it’s activities.

Outcomes
ESG Topic
General ESG|Deforestation
Conducted by
Objectives

1. Better understand the ESG risks protein producers are exposed to

2. Better understand what companies are doing to mitigate these ESG risks

3. Push companies to improve their ranking in the Coller FAIRR Protein Producer Index.

Scope and Process

The Coller FAIRR Protein Producer Index highlights 9 ESG risks for protein producers. These risks range from antibiotics to deforestation to water scarcity and animal welfare. These topics are not well researched by rating providers, which is why we used this index as a basis for an engagement project. As a result, we reached out to the companies we are invested in (~15)  to discuss their rankings and to talk about improvement points. This project started in 2019 and is expected to go on for several years.

Outcomes
ESG Topic
Labour practices and supply chain management
Conducted by
Objectives

Company in the security sector. They were initially flagged by our UN Guiding Principles screening for alleged anti-union practices. Our goal was to better understand the business and the allegations and to ensure that they are or become UNGP compliant

Scope and Process

We wrote them a letter and had a phone call with the head of labour relations and investor relations.

Outcome: 

The alleged anti-union practices seem to not be based on any facts and the allegations are made by one union group with their own agenda. MSCI uses that organization’s website as its only source.

• The additional due diligence that was conducted at Prosegur did not find any labour rights issues. The confidential report was sent to us for review.

• Union membership statistics are above average, especially for Spain.

Outcomes
ESG Topic
Climate Change|Company leadership issues
Conducted by
Objectives

Volkswagen was approached as part of our norms-based screening. They are considered to be non-compliant with the UN Global Compact because of the Diesel gate scandal. Our goal with the engagement was to understand whether or not we expect the ESG risks to decrease and hence whether or not they have learned from the Diesel gate scandal.

 

 

Scope and Process

We sent them an engagement letter sent addressing the Dieselgate scandal and inviting them for engagement. Following the letter we conducted an engagement call with the Head of Investor Relations. Given the concerns we had we also attended their ESG convention in Berlin.

Outcomes

11.2. Additional information. [Optional]


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