Liontrust Sustainable Investment Annual Review 2021 - Flipbook - Page 34
2019 engagement highlights
Board gender diversity: Over the last four years, we have seen
meaningful progress on board gender diversity for companies
in our funds, and although there are other external factors, we
believe our voting and engagement with these companies has
contributed to improvements.
In 2016, we began withholding support for companies that
are not sufficiently gender diverse. Where companies had
fewer than 15% women on the board, we voted against the
annual report and accounts at the AGM and abstained where
this was greater than 15% but fewer than 30%. In 2019, we
used the same process but instead focused on the resolution to
re-elect the Chair of the Nomination Committee.
Twenty one companies in our funds have increased the
proportion of women on the board to over 30%, such that we
no longer need to withhold our support. After voting, these
companies now have an average of 38% female boards,
compared to just 22% before we began voting.
A further 15 companies in our funds have increased the
number of women on their boards, and we remain positive
that continued efforts through voting and engagement on
this issue should result in further progress. After voting, these
companies now have an average of 26% female boards,
compared to just 17% before we voted on this issue.
There are 13 companies where we have seen less progress
on increasing the gender diversity on boards so we will
continue to engage and vote in order to effect real change.
2019, which aims to improve the quality of jobs globally.
The WDI is pressing companies around the world to disclose
better data on how they manage staff and their supply chain
workers. The data cover issues such as health and safety,
workers’ rights, diversity and wage levels. The fact there are
too many poor-quality and precarious jobs around the world
is recognised in the UN’s Sustainable Development Goal
8, which calls for decent work for all. Through the Initiative,
our team will encourage companies held across our funds
to disclose data to the WDI. In 2019, we requested that
15 companies disclose data to the Initiative. One company
confirmed it would submit data and we are following up
with other companies as we continue our efforts to improve
public disclosure on worker-related issues during 2020.
2020 priority initiatives
Staff and the gig economy: Treatment of staff continues to
be a key engagement issue, particularly in light of growing
concerns about the poor employment standards of the socalled ‘gig economy’. We met Gym Group several times, for
example, to ensure it is treating its trainers fairly. The company
must balance the needs of its trainers, ensuring they have
the opportunity for full employment with associated rights,
while also recognising some wish to remain self-employed.
The company trialled a new arrangement in eight gyms and
has since rolled this out across the company. Gym Group’s
commitment to people earned the company a Gold Award
from the Investor in People Group and it was also named in
the Sunday Times’ 100 Best Smaller Companies to Work For’,
highlighting its commitment to being a first-class employer.
Workforce Disclosure Initiative: Liontrust become a signatory
to ShareAction’s Workforce Disclosure Initiative (WDI) in July
Money laundering: We engaged with a number of our
financial holdings on money laundering, investigating
how these businesses are ensuring they avoid falling foul
of any criminal activity after some high-profile cases over
the year.
Voting summary 2019
In 2019, we voted at 98% (137 of 140) of votable meetings and
voted against management or abstained on proposals in at least one
vote in 62% (87 of 144) of votable meetings. In 2019, we voted to
abstain or voted against:
Re-election of chair
Remuneration
27
29%
The re-election of the Chair of the
Nomination Committee (which
related to gender diversity, as
per the section above)
Ratification of auditors
42
17
31
30%
of eligible
meetings
65
Re-election of directors
40%
of eligible
meetings
71
The approval of the
company’s remuneration
report/compensation
34 - Liontrust Sustainable Investment: Annual Review 2019
The re-election of one or more
company directors (due to lengthy
terms of office, bundled director
elections or lack of independence)
• Increased corporate diversity: We believe companies that are
more diverse are better able to prosper over the long term. We are
engaging companies to encourage greater diversity, looking at
gender balance at Board level and senior positions, and looking
at efforts to reduce any gender pay gaps.
For 2020, we are staying with the same priority initiatives, except for
two changes. First, we decided to step back from our focus on antibribery and corruption in order to better allocate time and resource to
engaging with companies on the climate crisis. Throughout 2019, we
engaged on the climate under the Impact and Sustainable Development
Goals initiative, but this renewed focus will now be executed through
a standalone initiative solely focused on encouraging all portfolio
companies to reduce greenhouse gas emissions.
• Worker well-being: How companies manage the human capital
of their direct operations, as well as workers further down supply
chains, can affect their long-term success. 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.
In our experience, continued engagement over a longer time period is
more likely to achieve better engagement outcomes than over a oneyear reporting cycle, so we continue with five of our previous priority
initiatives in 2020.
• Encouraging the transition to sustainable investment: Individuals
are having to take responsibility for their long-term finances and
adequate savings and pension provision is critical. To date, the
majority of saving has been into non-sustainable funds but as
demand for sustainable investment grows, companies should do
all they can to promote it. We will focus on determining which are
leading the way and which need to do more.
As well as continuing our efforts to increase corporate disclosure on
ESG impacts, mitigation efforts and performance, our team is now also
focused on delivering improvements in the following priority initiatives:
• One and a Half Degree Transition Challenge: To ensure
companies have strategies to reduce absolute carbon
emissions at a rate consistent with limiting global warming to
1.5 degrees.
• Impact and Sustainable Development Goals: We continue to
prioritise our efforts to quantify the main impacts (good and bad)
from the companies in which we invest. We will engage with
companies to disclose their main impacts so we can report on
these. This is an evolving field and we are keen to build on the
work we have already done in this area.
• Encouraging sustainable use of plastics: We are looking for
companies providing solutions to plastic pollution as potential
investments as well as encouraging companies to reduce the
amount of single use plastics they introduce to the environment.
16%
of eligible
meetings
64
We prioritise a number of proactive engagement initiatives in
collaboration with our Advisory Committee at the beginning of each
year. We assess how our holdings are positioned on these issues
and, where appropriate, define target companies with which we
will engage.
of eligible
meetings
89
The ratification of auditors/
authorisation for the Board to fix
remuneration of external auditors
Liontrust Sustainable Investment: Annual Review 2019 - 35
