Liontrust Sustainable Investment Engagement and Voting Annual Review 2021 - Flipbook - Page 9
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.
We want to see how we can contribute to this, as a transition that
leaves people behind (ignoring the impact on the workforce of
rapidly decarbonising industries) is unlikely to gain the public support
needed and more likely to fail than a more inclusive approach.
Auditors: Of the companies held across our portfolios in 2019,
we have seen improvements in the Audit function. Over the last
four years, we have voted in line with our policy on tenure and
non-audit fees: of the 19 companies where we withheld support
for the Auditors, around half related to long tenure and half to high
non-audit fees.
Promoting detailed investment-relevant work by NGOs in civil
society: Most people will not have the expertise or time to focus
on specialist areas of sustainability to understand how it can affect
their investments and how companies in a given industry compare
on this issue. This is why the work done by NGOs is so important.
For each of the 19, we saw improvements such that we could
support in subsequent years. There are 34 companies across
the portfolios for which we have not supported the proposal on
Auditors and continue to abstain/vote against. There are a further
12 companies for which we have only withheld our support in
2019, as they are relatively new to the funds.
Just Transition: We attended a “Just Transition” meeting at LSE
during the third quarter of 2019 and also joined the UN PRI
Working Group for a Just Transition. The Just Transition came out of
the Paris Accord and acknowledges the need to factor the social
dimension into the transition to a lower carbon economy.
Over 2019, we highlighted two important pieces of work done by
the Zoological Society of London (ZSL) on tropical commodities and
sustainable rubber. Its research project SPOTT (Sustainability Policy
Transparency Toolkit) is an impressive piece of ongoing work to
ensure investors and other stakeholders understand how companies
are managing the many challenges of working in tropical forests to
ensure they have a benign impact on the environment and are not
inadvertently contributing to deforestation.
We did two podcasts with Eleanor Spencer, part of the team at
ZSL that has done this work. We would encourage all investors in
businesses involved in tropical commodities to learn more about this
at www.spott.org and apply the findings to where they direct their
capital, as well as how they challenge these businesses to improve.
Collaborative engagement in 2019
Liontrust is a signatory to the UN Principles for Responsible Investment
(UN PRI) and the Sustainable Investment team was a founding
signatory to the Principles back in 2006. Members of the team are
represented on a number of UN PRI working groups:
We are also involved in the Access to Nutrition Index and we
participate or are signatory to the following:
• Financial Reporting Council (FRC) Stewardship Code: Member
• Listed Equity Advisory Committee
• Taskforce on Climate-Related Financial Disclosure (“TCFD”):
Supporter
• Sustainable Palm Oil Investor Working Group
• 30% Club Investor Group: Member of the Investor Group
• Global Investor Taskforce on Tax & the PRI Tax Advisory Committee
• Cyber Security
• SDG and Active Ownership Committee
• Working Group for a Just Transition
• Workforce Disclosure Initiative (“WDI”): Supporter
• CDP (formally known as Carbon Disclosure Project): Signatories,
data on carbon emissions, water and deforestation
• UK Sustainable Investment and Finance Association (“UKSIF”):
Signatory
Liontrust Sustainable Investment: Engagement and Voting: Annual Review 2019 - 9