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Pendal

PRI reporting framework 2020

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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

02.2. Indicate whether your organisation plays a role in the engagement process that your service provider conducts.

02.3. Indicate the role(s) you play in engagements that your service provider conducts on your behalf.

02.4. Additional information. [Optional]

In addition to the direct engagements undertaken by our investment teams, our in-house specialist ESG research and engagement team, Regnan, runs a dedicated ESG-focused engagement program which complements our own active ownership practices. Regnan's program is a collective program with Pendal one of several institutional investors represented, with Pendal served like any other external client of Regnan's. Regnan's engagement program involves a client approval process which provides the opportunity to discuss and provide feedback on each of the items above. Engagement plans are developed with client input on the companies selected, relative priorities within the program and change objectives. In addition to monthly reporting, quarterly meetings are offered to discuss recent and upcoming engagements, including frequency/intensity and next steps for engagement. 

At times, Regnan may also provide bespoke engagement services solely for Pendal investments team (e.g. we are co-engaging as part of our activity within Climate Action 100+).


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

Service-provider engagements

Service-provider engagements

03.3. Additional information. [Optional]

Note: Service provider engagements in this case refer to the engagement program run by Regnan, even though Regnan is wholly-owned by Pendal.


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
Service-provider engagements

04.2. Additional information. [Optional]

Pendal is an active manager and as such direct engagements are mostly part of regular and ongoing dialogue and are often focused on information gathering, on both financial and non-financial factors. Where relevant, especially at board-level meetings, objectives are set and progress monitored. For this reason, the number of meetings which primarily focus change objectives is in the majority (and not "All Engagement Activities"), given our large volume of direct engagements.  


LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Collaborative engagements
Service-provider 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
Service-provider engagements

05.3. Additional information. [Optional]

Pendal is an active manager and as such direct engagements are mostly part of regular and ongoing dialogue and are often focused on information gathering, on both financial and non-financial factors. Where relevant, especially at board-level meetings, objectives are set and progress monitored. For this reason, the number of meetings which primarily focus change objectives is in the majority (rather than "All"), given our large volume of direct engagements. As such, we also monitor and/or review engagement outcomes in a majority of cases.


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]

We may choose to collaborate with other investors; employ voting rights to support the communication of our message to management; or potentially reduce exposure to the stock.

Regnan has a separate escalation strategy, and as a subscriber to their program as well, we endorse their strategy. Given they represent shareholders and are not shareholders themselves, Regnan's escalation process can be proposed which may:

  • discuss concerns with non-client investors, Regnan peers, substantial fund managers and relevant other stakeholders;
  • involve public advocacy;
  • provide guidance to clients on voting matters relevant to engagement priorities;
  • recommend that clients ensure that the unaddressed risks are adequately priced into investment decisions;
  • propose a resolution at the company's AGM or EGM; or
  • suggest clients consider exiting the stock from their portfolios.

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

Service-provider 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

Service-provider engagements

07.4. Additional information. [Optional]

Information derived from our engagements (whether they be individual/internal staff engagements, collaborative engagements or service provider engagements) are all shared with internal investment managers where relevant to investments.

Engagement information where relevant may become part of our valuation of a business, feed into our portfolio construction process and influence our proxy voting decisions. However, not all engagement activities will always influence investment decision-making, only where it is material to the investment outcomes of the fund and in alignment with portfolios objectives (both value- and values-based objectives as relevant). 

We provide quarterly reports on engagement activity to our clients. This includes collaborative engagements or service provider engagements.


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

Service-provider engagements

08.2. Additional information. [Optional]

We provide quarterly reports on our Australian Equity engagement activity to our clients. This includes collaborative engagements or service provider engagements.

Regnan undertakes comprehensive monitoring of all company engagements and provides monthly and annual reports on progress. Detailed tracking is undertaken on the number of engagements; method of engagement; level within the organisation at which the engagement occurred; topics discussed; and detailed summaries of discussions held, together with observations of progress, including publicly available materials/statements.


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