Liontrust Sustainable Investment Engagement and Voting Annual Review 2021 - Flipbook - Page 3
Our approach to engagement and voting
Engagement is integral to how the Liontrust Sustainable Investment
team ensures it focuses on high-quality equities and bonds.
Engaging on key social, environmental and governance (ESG)
issues gives us greater insight, helps to identify leading companies
and is used as a lever to encourage better business practices.
quarterly basis and this is the third annual report of our efforts.
Detailed company-specific engagement is also available to clients
upon request.
Direct engagement
The majority of our engagement is focused on companies held
across our range of funds. We meet companies face to face and
correspond directly through emails, telephone calls and letters
and interact with a range of representatives, which might include
the Chairman or senior management and often extends to experts
heading up sustainability strategy or other core roles within an
organisation. Ultimately, who we engage with will depend on the
specific issue.
Our team has been engaging in this way for two decades, and we
have found this approach challenges and encourages companies to
proactively manage the wider aspects of their business, which, in
turn, protects their longer-term prospects.
This Annual Review shows that engagement covers a broad
canvas, ranging from company-specific issues to driving ongoing
improvements in areas such as diversity and environmental impact.
We spend a lot of time talking to companies on ESG issues and
are transparent about this activity. We record all engagement with
companies and monitor where we have been successful, where
progress has been slower and where unsuccessful.
Typically, direct engagement with companies is initiated at our
request and most often arises from questions or concerns we have
as a result of our initial analysis of ESG issues, from ongoing
monitoring of holdings on key sustainability issues or metrics, or
relating to emerging issues, trends or controversies. Companies we
hold within the funds are analysed at least once a year, although,
in practice, this is done more frequently in line with our ongoing
review of a stock’s investment thesis and valuation. We actively
engage with companies to encourage better management of ESG
issues and assess all controversies using data from external ESG
research providers, and, when necessary, engage on issues of
concern.
Since we launched the Sustainable Future funds in 2001, we have
regularly communicated our engagement activity to clients on a
Engagement also arises at the request of a company when we are
invited to offer feedback or guidance on ESG policies and initiatives.
Engagement is a resource-intensive process and our team conducts
sustainability research alongside traditional financial and business
fundamental analysis. This approach enables us to better target
engagement on material issues and integrate this into our financial
assessment of a company, maximising the information advantage
that engagement can bring to analysis.
TEAM MILESTONES
2001
Voting policy: E&S
reporting
Collaborative
Engagement
2006
Team signs
PRI
2009
Palm
Oil
2014
Responsible
Tax
Sustainable Funds
launch
2000
GLOBAL EVENTS
2010
PRI launch
2006
2017
Challenge
management
AGM 75%
2020
1.5 Transition
Challenge
2020
ShareAction report praises Sustainable Investment
team’s ‘rebel genetics’ on voting policy
2017
Liontrust Sustainable Investment: Engagement and Voting: Annual Review 2019 - 3
