Progress reports and outcomes of the engagement are communicated to portfolio managers and financial analysts, allowing the information to be considered in investment decisions. In cases where an engagement relates to critical issues for the specific investment case or the general investability of a company, failure to meet expectations will entail escalation of the issue through other stewardship activities, such as voting, and ultimately the consideration of quarantine or divestment.
Our engagement activities typically fall into one or more of three different categories:
1. Investment-led engagement
This relates to material ESG-related risks or opportunities identified by portfolio managers, financial analysts, and ESG analysts via our company assessments.
2. Norms- and incident-based engagement (including PAI)
Addresses companies that are in breach of international norms or conventions or those involved in ESG-related incidents. Significant deviation from the relevant peer universe on PAI metrics may also trigger engagement.
3. Thematic engagement
This type of engagement is initiated for investee companies with the most material exposure to one or several of our four focus areas:
- Good governance
- Human rights
Each theme is closely aligned with the SDGs and relevant ESG risks and has been selected and defined through close collaboration between ESG specialists, portfolio managers, financial analysts, and clients. All of our engagements are tracked in our in-house database and reviewed by the RI team to monitor progress.