Liontrust Sustainable Investment Engagement and Voting Annual Review 2021 - Flipbook - Page 25
2022 proactive engagement intiatives
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 2022.
We prioritise 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 2022, there are two changes:
As well as continuing our efforts to increase corporate disclosure of
ESG impacts, impact metrics, mitigation efforts and performance,
our team will now focus on delivering improvements through the
following five priority initiatives:
• Reversing the collapse in biodiversity and Encouraging a faster
transition to a circular economy are combined into Preserving and
restoring nature
• Engaging with banks on financing the transition will be included in
our Climate Crisis initiative
1. Preventing
irreversible damage
from the climate crisis
1
5. Encouraging
the transition
to sustainable
investment
3. Ensuring worker
well-being
2
3
2. Preserving &
restoring nature
4
5
4. Increasing
corporate diversity
1. Preventing irreversible damage from the climate crisis
We recognise the urgent need to reduce carbon emissions across
the economy to limit the negative impacts stemming from the
climate change emergency. In addition, the climate crisis is set to
have significant physical and economic impacts on human activity.
The IPCC, IMF and Bank of England all recognise climate to be
a systemic issue that will affect all types of sectors, and will affect
companies’ returns.
Objective: 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.
2. Preserving and restoring nature
TNFD: ‘More than half of the world’s economic output - $44 trillion of
economic value generation – is moderately or highly dependent on
nature. Nature loss therefore represents significant risk to corporate
and financial stability.’
Objective: We will engage with investee companies to encourage
better information and reporting of natural capital impacts from their
activities, products and services, as well as policies and programmes
that preserve and restore nature and promote biodiversity. We will
also engage to understand better companies’ dependencies on
natural capital and how this might impact financial returns.
3. 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.
Objective: 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.
4. Increasing corporate diversity
We believe companies that are more diverse are better able to
prosper over the long term.
Objective: We will engage to encourage greater diversity, looking
at gender and ethnic balance at a board level, senior positions
and within the workforce, as well as looking at efforts to increase
transparency and reduce pay gaps.
5. Encouraging the transition to sustainable investment
To date, savings and investments have typically been geared
towards traditional investments that do not necessarily incorporate
ESG. However, as demand for sustainable and ESG-integrated
investments grows, and regulations to better classify what constitutes
‘sustainable’ investment follow suit, companies should play their part
to promote it to further accelerate the transition needed for a more
sustainable economy.
Objective: We will focus on determining which companies are
leading the way and which need to do more.
Liontrust Sustainable Investment: Engagement and Voting: Annual Review 2021 - 25
