Robeco’s Active Ownership team has selected five new engagement themes for 2018. Team head Carola van Lamoen explains why they were chosen, and what are the challenges in trying to get companies to improve themselves.
We select engagement themes in a very structured way. We ask input from our portfolio managers and analysts, and from the SI research teams at RobecoSAM, and match them with the ideas of the engagement specialists within my team. We ask clients what they consider to be most relevant to focus on, and with all that input we come up with a balanced set of financially material themes. We also aim to align engagement themes where possible with the UN Sustainable Development Goals (SDGs). Through that process, we came up with five themes.
The first focusses on challenges relating to climate change where we will target the world’s biggest carbon emitters. The second topic is discussing food security with agrochemical, seeds and fertilizer companies. The third is cyber security, where we will focus our efforts on companies in the ICT and consumer sectors that are vulnerable to these issues. The fourth one is good governance, amongst others looking at Brazilian and Chinese companies. And the fifth topic is waste management, specifically within the tech and solar power industries.
Our climate change policy aims to reduce investment exposure to climate risk, and we do that in many different ways. We are part of a global collaboration of 225 investors who have joined forces to get into dialogue with the top 100 carbon emitters in the world. In this ‘Climate Action 100+ initiative’ we’ll be taking a leading role in engaging with some of these companies. We will also co-file shareholder proposals with regard to two-degree scenario planning and methane emission reduction targets at some companies.
We’ll focus specifically on a transition to circular business models, so that no waste will be produced. In the production process of solar energy, toxic waste is still an issue. Currently, the product cycle of solar panels is linear: at the end of their life they are disposed of, instead of recycled. Actually, they were never designed to be recycled to begin with. They are not biodegradable, so how do you decompose them – we don’t want them to end up on an Indian beach. If companies have an adequate approach to manage the end-game through the initial manufacturing process, it can alleviate this problem. This is also aligned towards the SDG on responsible consumption and production.
More data is stored now in systems around the world due to cloud computing and social media – 90% of the data in the world today has been created in the last two years. There have been many more attempts to steal this data through hacking attacks. The level of security needed is getting more advanced, but the skills of the hackers and their incentives to steal more valuable data are growing more quickly than the abilities of companies to respond to the threats. We will focus on the ICT and consumer sectors for this engagement. Retail companies now operate much more online, while banks face an obvious security threat.
There isn’t a common denominator as such, but a lot of the suggestions we received from clients and the investment teams related to trying to achieve governance improvements in emerging markets. We see a lot of upside potential there. There’s a difference in the quality of corporate governance in developed markets compared with emerging markets, including structures needed to improve disclosure, shareholder rights and these kinds of issues. Our engagement specialist in Asia specifically focusses on governance issues. Corporate governance standards have been improving in several countries following pressure from investors, governments and other stakeholders, but there are still a lot of challenges.
It’s still on the agenda; we’ve made a lot of progress but like climate change, it remains a large global challenge. Weather patterns will negatively affect farmers in emerging countries due to droughts or flooding, along with urbanization in low-income countries. A global population growing to 10 billion by 2050 is a big driver of demand for food systems. So there is a lot of room for improvement. We engage with agrochemical, seeds and fertilizer companies on the role they can play in developing yield-enhancing solutions for famers, with a specific objective to support smallholder farmers. Similar to with waste management, there was a strong desire from a client to do this. And the whole topic is aligned with the SDG relating to food.
The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is Robeco Switzerland AG, Josefstrasse 218, 8005 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/Robeco Switzerland product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/Robeco Switzerland offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.