The amended European Shareholder Rights Directive II (“ SRD II”), which is applicable as of 10 June 2019, includes transparency obligations for European institutional investors – i.e. pension funds and insurers - as well as a European asset managers (e.g. Robeco) to the extent investments in EU equity instruments are made.
Robeco is very committed and well positioned to adhere to SRD II which aims to encourage long-term shareholder engagement. We have a long-standing focus on responsible investing and long term shareholder engagement. We use our ownership rights to constructively engage with investee companies and to serve the long term interests of our clients.
A dedicated team of engagement specialists maintains an active dialogue with some 200 companies a year on financially material themes that we identify in consultation with our investors. This has proven to be a successful means of influencing corporate behavior. Robeco also votes at approximately 5,000 shareholder annual general meetings. All Robeco’s activities are in line with the Principles for Responsible Investing (PRI), which require asset managers to be active owners and incorporate ESG factors into their ownership policies and practices, in addition to SRD II.
SRD II requires Robeco to annually disclose how its investment strategy complies with the mandate we have with an institutional mandate client or a Robeco equity fund an institutional client has invested in, and how it contributes to the medium to long-term performance of the institutional client’s assets. The disclosure obligation can be met by either individual client reporting or by generic publication on our website.
The disclosure shall include reporting on the key material medium to long-term risks associated with the investments, the use of proxy advisors, turnover and turnover costs, our policy on securities lending and whether conflicts of interests have arisen regarding engagements activities and how we have dealt with them.
Robeco uses a proxy voting platform and proxy voting recommendations for all of the meetings which we vote. Our proxy voting advisor (Glass Lewis. Co) provides voting recommendations based upon Robeco’s custom voting policy. A Robeco team of dedicated voting analysts then analyze the merit of each agenda item. This analysis, based upon Robeco’s voting policy takes precedence over the recommendations of the proxy voting advisor. This means Robeco’s instructions often deviate from the recommendations of both management and the proxy advisor.
At least annually basis, we evaluate our proxy voting agent, on the quality of governance research and the alignment of (customized) voting recommendations and Robeco’s voting policy. This review is part of Robeco’s control framework and is externally assured.