28-10-2022 · Active Ownership Report

Engaging to improve diversity and resource management

Addressing the impacts that companies have on society and natural resources leads the Active Ownership team’s third-quarter report.

    Authors

  • Carola van Lamoen - Head of Sustainable Investing

    Carola van Lamoen

    Head of Sustainable Investing

The importance of having firm diversity and inclusion approaches and the need for robust natural resource management are the subject of two new engagement themes at Robeco in 2022. The themes seek to strengthen companies’ approach and disclosures around some of their key adverse impacts on society and nature.

In a special interview, Laura Bosch and Antonis Mantsokis share how they will tackle not only companies’ diversity commitments but also the implementation of their diversity and inclusion strategies across employees’ lifecycles, from hiring to career development.

Meanwhile, Sylvia van Waveren shares how Robeco evaluates companies’ impact on natural resources through its proprietary Water and Waste Management Evaluation Framework, aiming to push companies from simply being aware of associated business risks to developing a strategically integrated approach to natural resources.

Combatting climate change is not just an issue of decarbonizing the high emitters; it is also important to engage with those funding them. Many banks struggle to switch their loan books and activities to be ready for the lower-carbon transition. To better understand and engage with banks, we have joined the Institutional Investor Group on Climate Change, who together with the Transition Pathway Initiative is developing a framework to assess how prepared banks are for the low-carbon transition, from their net-zero commitments to climate governance and policy engagement.

Voting season highlights

This year’s proxy voting season once again highlighted the relevance of well-designed executive remuneration policies. Michiel van Esch reflects on executive pay practices in times of uncertainty, and explains what companies need to watch out for if they wish to get shareholder support on their executive pay proposals.

And in a separate update, Diana Trif and Lucas van Beek look back on some of the recent trends in proxy voting, from the increased scrutiny among investors around companies’ board elections, to the recent legislative changes around submitting shareholder proposals in the US.

Addressing inequalities

“Our new ‘diversity and inclusion’ engagement program is working to address the societal inequalities mirrored throughout gender and ethnic pay gaps, discriminatory company policies and unequal promotional opportunities,” says Carola van Lamoen, Head of Sustainable Investing at Robeco.

“By considering their most vulnerable employees at each step of their human capital management, companies can strengthen employee attraction, lower turnover costs and benefit from diverse perspectives and skillsets. Through this theme, we hope to help companies elevate each part of their workforce, and thus create value for both them and society.”

Nature and climate

“On the environmental side, in line with the rising summer temperatures and climate change-induced droughts across the world, we have initiated a new engagement stream on ‘natural resource management’. This will look not only at strengthening companies’ water and waste policies, but also whether they have strong operational processes around emergency situations,” Van Lamoen continues.

“With the quarter marking the mid-point of our three-year engagement around the ‘climate transition of financial institutions’, we see that only a few banks are on credible net-zero trajectories. These are all issues that were echoed by the shareholder proposals we supported at numerous banks during the 2022 proxy voting season.”

“We enter the new quarter with clearly laid out engagement priorities and a strong mandate for transparency and look forward to the change to come.”

Read the full report here


Active Ownership overview

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Stay updated
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information This disclaimer applies to any documents and the verbal or written comments of any person in presentations or webinars on this website and taken together is referred to herein as the “Information”. The services to which the Information relate are NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws and must not be relied or acted upon by any other persons. This Information does not constitute an offer to sell, or a solicitation of an offer to buy, any financial product, and may not be relied upon in connection with the purchase or sale of any financial product. You are cautioned against using this Information as the basis for making a decision to purchase any financial product. To the extent that you rely on the Information in connection with any investment decision, you do so at your own risk. The Information does not purport to be complete on any topic addressed. The Information may contain data or analysis prepared by third parties and no representation or warranty about the accuracy of such data or analysis is provided.

In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management B.V. is authorised as a manager of UCITS and AIFs by the Netherlands Authority for the Financial Markets and subject to limited regulation in the UK by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.