We engage with companies and institutions to drive positive change. Where appropriate, we discuss governance, environmental and social issues relevant to their specific business models. These discussions often already take place before a company is added to the investable universe, as we assess companies quantitatively and qualitatively for their contribution to our sustainable transition themes and alignment with our minimum standards. Given the fund’s robust impact investment criteria, we only select companies that drive positive change. Therefore, we do not need to use a forceful approach to engagement, but rather can address companies with open, constructive dialogue to understand their business proposition and sustainability challenges more deeply. Only if a company has breached or is nearing a breach of our investment criteria will our engagement become more forceful, and, if deemed unsuccessful, the company will be divested.
Direct company engagement
We have one-on-one conversations with companies to discuss sustainability topics that are important to us as an impact investor. We explore companies’ perspectives, policies, and business practices around our transition themes and minimum standards to understand the depth of their commitments to long-term positive impact. We use a variety of methods to connect with companies, including on-site visits, conference calls, letters, and email.
Collaborative and industry engagement
We believe that sustainability challenges cannot be solved alone. We therefore also participate in joint engagement initiatives alongside other institutional investors. Together, with professional associations, public policy makers, legislators, regulators, industry bodies and other relevant stakeholders (NGOs, international organisations, etc.) we strive to shape an environment in which companies and investors can operate more sustainably. Collaborative engagement increases the visibility of the topics being discussed and expands the overall power of our engagement activities.
Engagement agenda
Our engagement agenda for 2020-2023 focuses on specific environmental, social and governance topics:
In 2020, our core topic was climate change. Our goal is that all holding companies commit to the Science Based Targets initiative (SBTi), aligning with the main goal of the Paris Climate Agreement to keep global warming limited to 1.5ºC. We are currently focusing our engagement efforts on companies that have not yet committed to science-based greenhouse gas emission reduction targets. Read the case study for more details.
We engage with companies on basic labour rights and their responsibility to respect all salient human rights and uphold commonly accepted labour standards, both in their own operations and in their supply chain. This includes ensuring basic rights related to child labour, modern slavery, fair wages, discrimination and access to basic needs.
In the digital era, data protection is also an important human right. Recent scandals and public concern about digital data breaches, targeted advertising and private sector profiling have driven calls for greater controls over how personal data is collected and used. It is a priority on our investment agenda as it underpins a company’s wider corporate culture, business ethics and enterprise risk management, all of which affect the creation of long-term value.
We engage with companies with high pay gaps and complex remuneration systems that are not focused on long-term, sustainable goals. The desired engagement outcome is threefold:
- Reduce pay gap in companies;
- Concrete improvements on three performance indicators (e.g. on integrating sustainability KPIs in the incentive plans and increasing transparency while reducing risk taking) per company;
- Creating awareness of the relationship between inequality and remuneration systems.
