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Baillie Gifford

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]


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

Collaborative engagements

Collaborative engagements

03.3. Additional information. [Optional]

Each investment strategy has a slightly different approach in identifying and prioritising engagement activities. The Governance and Sustainability team prioritises engagements primarily though the materiality of an issue and our exposure to it dependent on the size of our holding. We also take into account new issues as they emerge and also as a response to client specific concerns surrounding a particular issue.


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
Collaborative engagements

04.2. Additional information. [Optional]

Our engagement falls under 1 of 3 types; fact finding, monitoring or influencing. We have an internal system where we record all our engagements and the history of our engagement with one company can be easily accessed. All holdings are continually reviewed by the investment managers and so if any action is required, the Governance and Sustainability Team and investment managers will coordinate an appropriate response.


LEA 05. Process for identifying and prioritising collaborative engagement

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

05.3. Additional information. [Optional]

If it is appropriate to collaborate then we are happy to do so and take a proactive role. We do not actively seek out collaborative engagements, instead taking that approach only if our own engagement has not been effective.


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]

When engaging with companies on governance issues, we have clear objectives. Where we do have reservations about a company's 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. If we have been unable to exert any influence over a company on a material issue over a protracted period of time our investment managers will consider reducing or selling our holdings.


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

Collaborative 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

Collaborative engagements

07.4. Additional information. [Optional]

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. Clients are informed of our engagement activities on a quarterly basis.


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​

Collaborative engagements

08.2. Additional information. [Optional]

All engagements are recorded and logged on external systems, however only engagements conducted by the Governance & Sustainability team are recorded for external reporting.


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