Liontrust Sustainable Investment Annual Review 2021 - International - Report - Page 43
2021 priority initiatives
For 2021, there are four key changes to our priority initiatives:
• Reversing the collapse in biodiversity will be added to the list
of initiatives to ensure we are more focused on this particular
environmental crisis.
• Our previous Impact metrics and SDGs initiative will be removed
and engagement in these areas will be integrated into our routine
analysis and conversations with companies.
• Our Ensuring worker well-being initiative will specifically include
engaging with companies on their response to and management
of the current pandemic.
2021 Initiative
• Our Encouraging sustainable use of plastics initiative will be renamed
Encouraging a faster transition to a circular economy and engagement
will be broadened to a wider number of sectors and materials.
In our experience, continued engagement over a longer time period
is more likely to achieve better engagement outcomes than over a
yearly reporting cycle, so we will continue with our other priority
initiatives in 2021.
As well as continuing our efforts to increase corporate disclosure of
ESG impacts, impact metrics, mitigation efforts and performance,
our team will focus on delivering improvements through the following
six priority initiatives:
Description
Climate Crisis: 1.5° Transition
Challenge
To encourage companies to adopt strategies to reduce absolute carbon emissions at a rate consistent with
limiting global warming to 1.5 degrees. We want to ensure companies can change in a timely, just and
profitable way and have robust strategies and targets in place to achieve this.
Reversing the collapse in
biodiversity
We will engage with companies in our portfolios exposed to key biodiversity impacts either in their direct
operations or through their supply chains. We will encourage these companies to do more to protect and
promote biodiversity and to invest in nature-based solutions and technologies. We aim to collate examples
of best practice and to see improvements in policies and practice that show how business can thrive
alongside enhanced biodiversity.
Encouraging a faster transition to a
circular economy
We want to ensure companies are looking for ways to reduce their impact through circular practices. We
will engage with companies to reduce the amount of single-use plastics and ask more about inputs, waste
policies and the potential for more circular practices within their business models.
Increasing corporate diversity
We believe companies that are more diverse are better able to prosper over the long term so we are
engaging to encourage greater diversity, looking at gender and ethnic balance at a Board level and
among senior positions, and within the workforce, as well as looking at efforts to increase transparency
and reduce pay gaps.
Ensuring worker well-being
How companies manage and look after their workforce through direct operations, and workers further
down their supply chains, can directly affect corporate reputation and overall business performance. We
will engage to encourage companies to offer decent work and pay living wages and to ensure they
mitigate risks, protect workers’ rights and maximise the opportunities to support employees. We will also
encourage companies to use their influence to drive forward best practice further down their supply chains.
Engagement will cover companies’ response to and management of the current pandemic, including
workforce adaptation, Covid-19 safety, redundancies, supply chain impacts and so on.
Encouraging the transition to
sustainable investment
To date, savings and investments have typically been geared towards traditional investments that don’t
necessarily incorporate ESG. However, as demand for sustainable and ESG-integrated investments grows,
and regulations to better classify what constitutes ‘sustainable’ investment come into force, companies
should play their part in promoting this approach to investing to further accelerate the transition needed to
a more sustainable economy. We will focus on determining which companies are leading the way and
which need to do more.
Liontrust Sustainable Investment: Annual Review 2020 - 43
