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Climate engagements highlighted in Q1 Active Ownership report

Climate engagements highlighted in Q1 Active Ownership report

04-05-2021 | Active Ownership Report
A double feature on climate work with banks and high-carbon emitters leads the Active Ownership team’s Q1 report. Governance and social engagement projects are also highlighted in the summary of work done in the first quarter of this year.
  • Carola van Lamoen
    Carola
    van Lamoen
    Head of Sustainable Investing

Speed read

  • New engagement theme targets banks funding high-carbon companies
  • The social risks of gaming theme follows upsurge during pandemic
  • Asian governance theme is extended while waste reduction theme closes

Two new engagement themes began in the first quarter, while two were closed and one was extended. Engagement with companies to seek improvements on environmental, social and governance (ESG) issues is a vital part of sustainable investing at Robeco, and its results are regularly reported.

In the opening story for the Q1 report, Robert Dykstra answers questions on the rationale for talking to banks for the team’s first ‘Climate transition financials’ engagement. The theme targets those financial institutions that are funding high-carbon companies without getting decarbonization commitments in return.

As one engagement theme on climate change begins, another has drawn to a close. Sylvia van Waveren and Cristina Cedillo reflect on the key results and takeaways of the original ‘Climate action’ engagement program that began in 2017.

Also begun in 2017, the ‘Corporate Governance Standards in Asia’ theme was scheduled to end this quarter, but has been extended in certain areas. Ronnie Lim explains why the dialog with some firms will continue, and what progress has been achieved so far.

Climate investing: from urgency to solutions
Climate investing: from urgency to solutions
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Taming gaming

The ‘Social impact of gaming’ is a new theme partly driven by the pandemic, as the amount of time spent on consoles grew by nearly 40% during Covid-19, and is predicted to stay 21% above pre-crisis levels. Daniëlle Essink reports on the need for engagement on the social risks for companies operating in this industry.

With global solid-waste production expected to reach 3.4 billion tons by 2050, society faces a growing waste management challenge. In the report, Dykstra also reflects on the outcomes of our ‘Reducing global waste’ engagement which has closed after three years, and discusses the future trajectory for companies addressing this issue.

Meanwhile, the report contains the regular updates on Robeco’s voting activities. Antonis Mantsokis provides an insight into why proxy voting is gaining increased importance, while Dykstra shares an outlook on expected shareholder proposals during the 2021 proxy voting season.

Important trends

“After a turbulent 2020, we look optimistically towards 2021 as the year of recovery,” says Carola van Lamoen, Head of Sustainable Investing, in the introduction to the report. “Although the year has only just begun, we are already observing several important trends.”

“For instance, while labor rights have been a material issue for investors for years, Covid-19 has brought to light the precarious circumstances of many front-line workers. As a result, labor rights will play a key role in the new themes that will be added to our engagement program in 2021.”

“Another continuing area of focus is how companies are responding to climate change. Banks have an important role to play in this regard, using their loan books as a lever. Our new engagement theme, ‘Climate transition financials’, will encourage banks to incorporate climate considerations in their financing policies.”

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