Trying to cut plastic pollution and the social impact of artificial intelligence are among four themes that Robeco will engage on this year.
Attempting to deflate health care costs through digitalization and helping to lower the environmental impact of cultivating palm oil complete the line-up for the Active Ownership team in 2019. Engagement dialogues typically last up to three years and aim to improve corporate performance on a number of environmental, social and governance (ESG) issues.
The first theme will address the issue of single-use plastic. The engagement will focus on food and beverage producers, along with the plastics manufacturers themselves.
“Today, almost everyone comes into contact with plastic packaging, and there are a lot of benefits, but also drawbacks in using it,” says Van Lamoen. “Currently, 95% of plastic packaging material is only single use. We aim to get these companies to move towards a circular economy model, focusing on innovation management, plastic recycling, and plastic harmonization. Plastic producers should work towards harmonizing plastic manufacture to make recycling easier and decrease ocean littering.”
“We recently became a member of the Plastic Solutions Investor Alliance and also have signed up to the Ellen MacArthur initiative, started by the former round-the-world yachtswomen, on moving to a circular economy.”
In a separate but related campaign, Robeco has begun a partnership with City to Sea, an award-winning British company which aims to prevent marine plastic pollution at source through its Refill initiative. This aims to make refilling reusable bottles easy, convenient and cheap, by installing refilling stations at more than 16,000 sites.
Our second engagement theme, focused on engaging on the social impact of artificial intelligence will target IT companies, including social media platforms whose core business entails collecting personal data from individuals. The chief concern is that the technological development and application of AI outpaces the development of principles to use the technology responsibly.
“Artificial intelligence technologies create opportunities for companies, but at the same time we note that AI poses several risks to human rights, specifically the right to privacy,” says Van Lamoen.
“The main aim of this engagement is to safeguard human rights in relation to the application of AI. For instance, AI-driven consumer products and autonomous systems (such as automated online assistants) generate and collect vast amounts of data without the knowledge or effective/informed consent of the users.”
“A recent report by the Office of the High Commissioner for Human Rights (OHCHR), pointed out a widely shared concern of algorithmic discrimination and bias on AI-systems, and warned of the disproportionate and disparate impacts of AI on certain groups facing systemic inequalities, in particular women.”
“We’re also looking at the corporate governance aspect of this and how the board is dealing with it. Sufficient technological knowledge and awareness of the public debate on AI at board level is key for companies using the technology.”
Our third engagement theme will commence with health care companies aiming to lower spiraling medical costs through digital innovation, as well as combatting aggressive drug pricing.
“High costs are a barrier to access to health care, and drug pricing is a specific component of this,” says Van Lamoen. “It’s a financially material sustainability concern, and the focus will be on digital innovation, as we believe this can reduce healthcare costs, and so increase access to health care.”
“There are several key trends: preventative medicine, to steer patients towards a healthier lifestyle; developing monitoring tools for patients; and the electronic harmonization of patient data between doctors, service providers and pharma companies. There are a lot of inefficiencies that can be resolved with better data exchange in receiving consultations from medical experts.”
Finally, the engagement specialists will focus on challenges in the palm oil industry, including deforestation, its large carbon footprint, and labor standards at producers in emerging markets. Palm oil is used in a wide range of consumer goods, from chocolates and cookies to shampoo.
“We’ve actively engaged with palm oil companies in the past, but we now want to step up our efforts and make sure that palm oil-producing companies commit to and implement sustainable production of palm oil, in line with the standards of the Roundtable for Sustainable Palm Oil (RSPO),” says Carola van Lamoen, Head of the Active Ownership team.
“To further strengthen our impact, we recently became a member of the RSPO, and we are now part of the roundtable’s financial institutions task force collaborating with international banks and other asset managers. We will focus on producers and traders in Malaysia and Indonesia.”
Engagement remains an ongoing activity at Robeco. “In addition to our new engagement themes, we will also step up our efforts in 2019 with regard to shareholder meetings,” says Van Lamoen. “If there are controversial agenda items, then we might engage with the company on such topics like its board composition, to dividend approaches. That is no typically three-year engagement but a more focused approach to deal with specific problems when they arise.”
Robeco Institutional Asset Management B.V. (DIFC Branch) is regulated by the Dubai Financial Services Authority (“DFSA”) and only deals with Professional Clients and Market Counterparties, and does not deal with Retail Clients as defined by the DFSA.
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 product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.