Liontrust Sustainable Investment Engagement and Voting Annual Review 2021 - Flipbook - Page 11
Engagement priorities for 2020
As stated, 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 whom
we will engage.
For 2020, we are staying with the same priority initiatives, except for
two changes. We decided to step back from our focus on anti-bribery
and corruption to better allocate time and resource to engaging with
companies on the climate crisis. Throughout 2019, we engaged
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 encouraging companies to reduce the amount of
single use plastics they introduce into the environment.
on this issue under the Impact and Sustainable Development Goals
initiative, although this renewed focus will now be executed through
a standalone initiative solely focused on encouraging all portfolio
companies to reduce greenhouse gas emissions.
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 five priority
initiatives in 2020:
Worker well-being: How companies manage 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.
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.
Increased 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 balance
at a board level and senior positions, and looking at efforts to reduce
any gender pay gaps.
The One and a Half Degree Transition Challenge
We are stepping up our engagement with companies to
ensure they reduce their absolute carbon emissions to zero.
In our view, businesses that are proactive in reducing carbon
emissions, and are able and willing to articulate this in their
business strategy, will gain a competitive advantage and
generate better investment returns. Those that do not will face
increasing risks to their businesses.
explain how they plan to decarbonise their businesses to limit
global warming to 1.5 degrees. Over 200 companies held
across the portfolios have until the end of 2020 to provide a
plan for how they are going to reach zero carbon emissions
and over what time period this will be achieved. Our fund
managers will use all measures at their disposal, including
voting and ultimately divesting over time, to persuade
companies to reduce their emissions.
The One and a Half Degree Transition Challenge is calling for
all companies held within our equity and bond strategies to
Liontrust Sustainable Investment: Engagement and Voting: Annual Review 2019 - 11
