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