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Baillie Gifford

PRI reporting framework 2020

You are in Strategy and Governance » Asset class implementation not reported in other modules

Asset class implementation not reported in other modules

SG 16. ESG issues for internally managed assets not reported in framework

Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Other (1) [as defined in Organisational Overview module]

Governance and sustainability considerations are not separate side issues, they are central to our investment process. All of our investment staff share the responsibility for identifying, analysing and monitoring issues and opportunities with our current and potential holdings. Our investment staff spend a very significant amount of time assessing the quality, integrity, motivation and culture of management teams, and then acting on their convictions. The work of our dedicated Governance & Sustainability team supports this. As active managers we have regular meetings with management and board members to identify and understand issues and to monitor performance. Analysts from the Governance & Sustainability team regularly join our investors for these meetings, in addition to meetings that they will arrange directly with company representatives to discuss specific issues. When engaging with companies on governance issues, we have clear objectives. Where we do have reservations about a company‚Äôs approach we prefer to encourage change through active ownership rather than divestment in the first instance. This will range from communications expressing concern through to face-to-face meetings with management and, where appropriate, voting against management. 

Other (2) [as defined in Organisational Overview module]

Within our real asset class allocations (commodities, infrastructure and property), longer-term governance and sustainability trends and factors can often be clearly identified. For example, environmental considerations can play an important role in the long-term attractiveness of a property investment or infrastructure project. As with other asset classes, our policy here is focused on engagement rather than exclusion. All relevant factors are taken into account as part of our investment analysis, and the integration of governance and sustainability factors allows a better assessment of the risks involved. Investment in these asset classes can often offer the opportunity to support sustainable projects or benefit from relevant technological developments. Where we invest in externally managed vehicles as a means of accessing desired asset classes, we employ a thorough due diligence process to select and monitor investments, including seeking managerial alignment with our own governance and sustainability beliefs and practices. We engage regularly and pro-actively with the management and boards of these vehicles to monitor and progress relevant governance and performance issues.

16.2. Additional information [Optional].

SG 17. ESG issues for externally managed assets not reported in framework (Not Applicable)