Stewardship and ESG Integration

Sustainability is one of the six key criteria used in our evaluation of securities, however it is not a negative screen. Our assessment of a company includes criteria related to practice, commitment and disclosure of ESG issues by management, and performance relative to peers. For example, environmental assessment considers issues of climate change, company efficiency and practices relative to industry and applicable standards; social assessment incorporates measures of employee and stakeholder policies and human rights; and governance considerations include board composition, remuneration structures and corporate disclosure.

Our extensive proprietary analysis is supplemented by company disclosures, the media and external research.

Assessment and monitoring

We monitor each company’s progress on managing ESG issues as part of our ongoing company research program.

Integration

Where ESG factors are determined to have a material impact on profitability, they are quantified and can influence other factors, most directly in the valuation and financials of the company.

Engagement

We have active, direct dialogue with many company board members and senior management on material ESG issues, which we identify through our consideration of ESG risks. We try to gain comfort that the company’s senior management and board are aware of, and accountable for, the management of material issues. Where relevant, we encourage companies in which we invest to improve their ESG disclosure.

"By favouring companies with sustainable competitive advantages, strong financials, quality management and predictable earnings we can deliver superior returns and protect from downside risks."

"Sustainability is one of the six
factors that we assess when evaluating a company’s investment credentials."

Case Studies

We believe that embedding ESG considerations into the core of our investment activities is in the best long-term interests of our clients. For more than a decade we have systematically and progressively improved our investment practices and processes.

Learn more through our interactive case studies map

Climate Change

The section below provides addition, team specific, information on climate change. Further information on our approach to climate change can be found in our climate change statement.

Team Climate Change Statement

Climate change is an issue that we evaluate when considering the sustainability of a company’s activities. Although climate change may not be an important short-term issue for some stocks, it may be an important long-term issue for stocks with sensitive exposure to trends in climate change.

Our comprehensive research process assesses every potential investment on a range of factors, including sustainability. Carbon risk is considered as part of the sustainability rating.

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Proxy voting history by type of resolution

The table below contains the proxy voting history for the team by issue type. The chart provides the same information for 2016.

Voting Independence 

The chart below shows the number of times the team has voted against management recommendations, proxy advisors' recommendations, or against both. The purpose of this table is to show the independent judgement which is applied by the team when making voting decisions.

 

Abstain

Against

For

2017/18 Total

Audit/Financials

-

-

2

2

Capital Management

-

1

22

23

Director election

-

15

215

230

Director Remuneration

-

1

11

12

Executive Remuneration

-

9

73

82

General business

-

-

-

-

Governance related

-

3

36

39

M&A

-

-

2

2

Remuneration Related

-

5

81

86

Shareholder proposal

-

8

-

8

Shareholder rights

-

-

4

4

Climate Change Related

-

-

-

-

Grand Total

-

42

446

488

 

 

Proxy voting information is as at 30/06/2018
Source: First State Investments / CGI Glass Lewis

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