We present our 2016 results in a context of numbers, case studies, and activities and by highlighting our approach: why we do what we do and how we have embedded this in our investment and engagement processes.
Socially Responsible Investment
Investing on the stock market offers interesting opportunities, financially as well as from a sustainability perspective. If large multinational companies begin to move in a more sustainable direction, even if only one step at a time, the wider impact will be significant.
We invest only in companies that contribute to a sustainable society or clearly lead the sustainability agenda in a particular sector. Furthermore, we will not invest in companies that are associated with unsustainable services, products or business processes. This is guaranteed by our rigorous selection process.
A key element in Triodos’ Socially Responsible Investment (SRI) strategy is active engagement and dialogue with the companies we invest in, aiming to raise awareness of sustainability, to stimulate action and to create lasting positive change. When Triodos Research considers a company for investment, we assess all aspects of a company’s sustainability performance. As with all engagement activities, Triodos Research uses the selection phase to push the sustainability agenda within companies. 51 companies assessed responded to our questions and eight engagement efforts were pending at the end of 2016. Only five companies did not respond to our questions.
Main engagement topics
The topics we discussed most with companies in 2016 were:
- Arms – dialogue with 30 companies
- Climate change – dialogue with 23 companies
- Animal testing – dialogue with 23 companies
- Factory farming – dialogue with 21 companies
- Basic labour rights – dialogue with 21 companies
Responsible share ownership
As shareholder, Triodos Research votes at all Annual General Shareholders’ meetings (AGM) of the companies we invest in. In 2016, we voted at 109 AGMs. Triodos Research remains critical of board remuneration policies. Consequently, we voted against 79% of the resolutions related to remuneration.
In addition to individually seeking dialogue with companies, Triodos Research also regularly works together with other investors to further steer sustainable performance and influence public policy. Triodos Research has a number of partnerships that facilitate and encourage such collaborative engagement. A subject on which we collectively took action is child labour in cobalt supply chains, following our collective action on conflict minerals over the past few years.
Our achievements in 2016
- We succeeded in increasing the response rate to our questions from 86% in 2015 to 91% in 2016.
- We increased the number of companies with which we initiated in-depth engagement from 37 to 48.
- We contributed to improving the performance of several companies on animal welfare.
- We had in-depth dialogue with two companies – Liberty Global and WPP - on their remuneration policy.
- We started collaborative engagement about living wage.