267694 EdinburghIT AR 2024 WEB - Flipbook - Page 28
26 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
SECTION 172 STATEMENT, COMPANY SUSTAINABILITY
AND STAKEHOLDERS / CONTINUED
including the Manager and receives and considers their
internal control reports on a quarterly basis covering their
operations, policies and control environments.
During the year the Board conducted a competitive tender
process to review its company secretarial arrangements. As a
result, it was agreed to appoint NSM Funds (UK) Limited as
the Company Secretary of the Company, effective 1 March
2024. Following a period of handover, Apex Listed Companies
Services (UK) Limited (previously Sanne Fund Services (UK)
Limited) resigned as Company Secretary on 1 March 2024.
The Board reviews the quarterly reports of the service providers
and whether the services meet the requirements of the Company,
represent value for money and are therefore in the best interests
of shareholders. The Board treats all service providers fairly, to
maintain a reputation as a trusted, fair and reliable partner. The
Board and/or delegates of the Board engage with key providers
on a periodic basis through service review meetings or, by
invitation, attendance at Board or committee meetings. Such
engagement gives opportunity to both parties to discuss any
challenges being experienced and potential solutions thereon,
and to identify planned developments at the Company or the
service provider. We aim to pay promptly and if in dispute, to
engage openly to resolve matters in a timely manner.
The Board continues to ensure that service providers are as
prepared as possible for all such eventualities which could
disrupt the performance of their respective functions.
ENGAGEMENT WITH INVESTEE COMPANIES
The Portfolio Manager is a long-term investor and typically
develops strong relationships with both investee and
potential investee companies. Both the Board and the
Portfolio Manager believe that engagement with investee
companies is positive, beneficial and welcomed.
Voting is a key activity in the dialogue with investee
companies and these decisions are reported to the Board on
a quarterly basis.
The Board supports the Portfolio Manager’s approach to
ESG in the context of its management of the portfolio, as
discussed below.
ENVIRONMENTAL SOCIAL AND GOVERNANCE
(“ESG”) MATTERS
As an investment company with no employees, property
or activities outside investment, environmental policy has
limited application. Nevertheless, the Board is committed to
taking a responsible approach to ESG matters. The Company’s
compliance with the AIC Code of Corporate Governance is
detailed in the Corporate Governance Statement on page 33,
which demonstrates the Company’s own responsibilities on
matters such as governance.
In respect of the Company’s investments, the Portfolio Manager
and the other members of the investment team integrate
ESG risks and opportunities (including climate change related
risks) as part of a material assessment undertaken for all
holdings. Consistent with the Portfolio Manager’s investment
approach, this analysis is undertaken on a bottom-up, stock
basis. The risks and opportunities that each holding faces over
a three-to-five-year period are then identified and prioritised.
Many of these issues can be sub-categorised as “E”, “S” and
“G” issues. The issues that are identified as the key ones are at
the forefront of engagement discussions on holdings with the
investee companies. These frequently include issues related
to global warming, including those focused on transitional
risks, legislation risks, and/or physical risks. The Manager is a
signatory to the Principles of Responsible Investment (‘PRI’)
and the Company’s assets form part of its commitment to
the Net Zero Asset Managers Initiative. Further information is
available at www.liontrust.co.uk and through the investment
company ESG disclosures at www.theaic.co.uk.
The Board recognises that the most material way in which
the Company can have an impact is through responsible
ownership of its investments. The Manager discusses below
how it engages with the management of investee companies
to encourage that high standards of ESG practice are adopted.
The Company made no political donations during the year
in review.
STEWARDSHIP CODE AND EXERCISE OF
VOTING POWERS
The Board considers that the Company has a responsibility as a
shareholder to ensure that high ESG standards are maintained
in the companies in which it invests. One of the principal means
of putting shareholder responsibility into practice is through
the exercise of voting rights. The Company aims to provide
investment specific active stewardship and the Company’s
voting rights are exercised on an informed and independent
basis. The Manager has adopted a clear and considered
policy towards its stewardship responsibility on behalf of the
Company. The Manager takes steps to satisfy itself about the
extent to which investee companies protect shareholder value
and comply with local recommendations and practices, such as
the UK Corporate Governance Code. The Manager’s approach
to corporate governance and the UK Stewardship Code can
be found on the Manager’s website at www.liontrust.co.uk
together with a copy of the Manager’s Stewardship Policy and
the Manager’s global proxy voting policy.
