Public HTML RI reports - PRI reporting framework 2020

	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
Service-provider engagements		236	46

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	>76% 51-75% 11-50% 1-10% None
2 to 3 interactions	>76% 51-75% 11-50% 1-10% None
More than 3 interactions	>76% 51-75% 11-50% 1-10% None
Total	100%

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	>50% 10-50% <10% None

09.5. Additional information. [Optional]

LEA 10. Engagement methods

10.1. Indicate which of the following your engagement involved.

Letters and emails to companies

In a minority of cases

In a majority of cases

In all cases

Meetings and/or calls with board/senior management

In a minority of cases

In a majority of cases

In all cases

Meetings and/or calls with the CSR, IR or other management

In a minority of cases

In a majority of cases

In all cases

Visits to operations

In a minority of cases

In a majority of cases

In all cases

Visits to supplier(s) in supplier(s) from the company’s supply chain

In a minority of cases

In a majority of cases

In all cases

Participation in roadshows

In a minority of cases

In a majority of cases

In all cases

Other

(specify)

          Attending shareholder meetings

In a minority of cases

In a majority of cases

In all cases

10.2. Additional information. [Optional]

Our response to LEA 10.1 includes engagements carried out by our service provider Hermes EOS.

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.

Add Example 1

ESG Topic	Climate Change Executive Remuneration Climate Change Human rights Company leadership issues Pollution General ESG Diversity Shareholder rights Health and Safety Sustainability reporting Water risks Labour practices and supply chain management Anti-bribery and corruption Deforestation Aggressive tax planning Cyber security Other governance Plastics Other
Conducted by
Objectives	EOS has pressed companies to set science-based targets, conduct climate-risk stress tests, and make enhanced disclosures. It has also asked companies to link executive pay to the achievement of climate change outcomes, and to ensure they do not lobby policymakers or regulators to hinder the achievement of the Paris Agreement goals. In 2019, EOS continued to participate in collaborative investor initiative Climate Action 100+, which targets over 100 of the world’s largest corporate greenhouse gas emitters. The aim is to curb emissions, strengthen climate-related financial disclosures, and improve governance on climate change risk and opportunities. The ultimate goal is to help limit global warming to less than 2°C, consistent with the Paris Agreement.
Scope and Process	EOS took an active role as lead or co-lead engager for 27 companies in this initiative, which has attracted over 370 investors with over $35 trillion under management. In 2019 EOS attended six annual shareholder meetings to promote action on the climate crisis – a mining company, an oil major, a utility, and three car manufacturers. EOS also helped to co-ordinate the work of the Institutional Investors Group on Climate Change’s shareholder resolutions sub-group, identifying companies that could be potential targets for climate change-related resolutions, and the utilities sector sub-group, formulating and co-ordinating engagement strategies for the sector.
Outcomes

Add Example 2

ESG Topic	Labour practices and supply chain management Executive Remuneration Climate Change Human rights Company leadership issues Pollution General ESG Diversity Shareholder rights Health and Safety Sustainability reporting Water risks Labour practices and supply chain management Anti-bribery and corruption Deforestation Aggressive tax planning Cyber security Other governance Plastics Other
Conducted by
Objectives	EOS engages on critical human rights issues including eradicating forced labour and child labour in supply chains. Many companies rely on global supply chains to access labour in low-cost regions, but the fragmented and opaque nature of these chains heightens the risk of human rights abuses. Traditional, announced audits may not uncover issues – more robust due diligence is needed. EOS engages with companies across five key areas: forced labour and modern slavery, child labour, living wages and purchasing practices, worker voice and gender-specific issues.
Scope and Process	EOS engaged with a Malaysian palm oil company over several years following NGO and media reports in 2012 of poor labour conditions at the company’s plantations in Liberia and its suppliers in Indonesia. 2013 saw further allegations of poor labour conditions in its supply chain and EOS urged it to provide clarity on how it was investigating and assessing the steps taken to avoid similar issues in the future. EOS continued to raise these concerns in further calls and correspondence over several years, during which the company appeared to be responding positively to consider improved disclosure and stakeholder outreach. During a call in 2017 the company committed to disclosing its migrant worker management process in its sustainability report – a significant improvement on transparency. In 2018 EOS asked the company to align its labour standards programme and move to industry best practices by reporting in line with the UN Guiding Principles on Business and Human Rights. EOS reiterated this request during calls in 2019 with the head of sustainability.
Outcomes

Add Example 3

ESG Topic	Diversity Executive Remuneration Climate Change Human rights Company leadership issues Pollution General ESG Diversity Shareholder rights Health and Safety Sustainability reporting Water risks Labour practices and supply chain management Anti-bribery and corruption Deforestation Aggressive tax planning Cyber security Other governance Plastics Other
Conducted by
Objectives	Despite plenty of evidence that diversity improves company performance, progress has been slower than hoped for in many parts of the world. EOS seeks balanced boards at companies – composed of directors with technical skills aligned with the strategic needs and direction of the company and a diversity of perspectives. This may include across gender, age, ethnicity, nationality, background, skills and experience, to improve decision-making and avoid groupthink. Getting the board right is often the first step towards addressing social or environmental issues to which the company may be exposed, which is why it is a significant feature in EOS’s engagement.
Scope and Process	EOS engaged with an Asian company where the board was composed entirely of Korean men, indicating an absence of diversity in gender and international experience, despite the company’s global operations. In addition, three out of the five independent directors were university academics, while another was a lawyer and former prosecutor, signalling a lack of relevant industry experience among them. In a group investor meeting with the combined CEO and chair, plus two independent directors, EOS raised concerns about the composition and effectiveness of the company’s board. EOS explained that the lack of diversity and relevant skills could limit the board’s ability to oversee the complex and expanding nature of the business, particularly following diversification into new businesses, including a major acquisition. In a later conference call, EOS gained some assurances that the board would consider adding new board directors with international experience to the top executive level. EOS had another constructive discussion about the role of the existing independent directors and suggested ways in which they could prove that they represent the long-term interests of minority shareholders. EOS requested more evidence that the independent directors are working to influence the board and hold its executives to account.
Outcomes

Add Example 4

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Add Example 6

Add Example 7

Add Example 8

Add Example 9

Add Example 10

11.2. Additional information. [Optional]

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