We typically start by providing high level training on RI and ESG issues. This includes the importance of RI, disclosure of regulatory requirements, trends, global best practice and practical examples. Based on the engagement, we then tailor the next steps to each client.
Our starting point is to determine whether a separate RI policy is required for the client based on their feedback. For larger clients, we advocate a separate RI policy in addition to RI wording in their Investment Policy Statement. The RI Policy will typically be quite basic initially but enhanced every year as the client becomes more familiar, engaged and empowered with ESG issues. The RI policy will typically include the following:
- Vision and Mission
- Importance of RI and ESG and links to UN SDGs and National Development Plan
- The Client's RI approach in general terms
- Which asset classes are covered and the RI approach to each asset class
- RI strategy regarding manager selection, engagement, proxy-voting and conflicts of interest
- B-BBEE / Transformation strategy
- Collaboration strategy
- Specific projects / initiatives (e.g. research or engagement dealing with either Governance, Environmental and/or Social issues)
- Reporting and Disclosure
- Roles and Responsibilities for implementation
- Frequency of review.
We raise and debate general ESG risks and issues at Investment Committee meetings to ensure that the RI policy remains relevant and "top of mind". Time has been formally allocated to cover ESG risks at every Investment Committee meeting. Asset managers are required to report back on their ESG approach at every meeting with the client and specific issues are also discussed e.g. stance on particular ESG issues or how proxy votes were cast.
At the moment, our clients do not have a separate proxy voting policy but are considering it. Larger clients have a separate stockbroker policy and securities lending policy, both of which consider ESG risks.
Implementation of the RI policy is monitored at least once a year and changes made where necessary.