Engaging with corporate management

Our main aim is to build relationships and understand the long-term sustainability of the companies in which we invest.

14 May 2020

Our engagement activities:

During 2019, we held over 1400 meetings with prospective or investee companies. Of these, 358 met our definition of engagement. Approximately one third of those meetings were thematic and 19 were focused on UN Global Contact violations. They covered 231 companies across regions and sectors. The majority had global operations and supply chains but were headquartered in developed markets.

Location of companies engaged in 2019

Companies we have been engaging with across the world include 10% in Asia-Pacific, 42% in the Americas and 48% Europe, Middle-East and Africa.

Sectors of companies engaged in 2019

Companies we have been engaging with across a number of sectors including communication services (9%), consumer discretionary (13%), consumer staples (15%), energy (26%), financials (43%), healthcare (24%), industrials (21%), information technology (19%), materials (24%), real estate (12%) and utilities (25%).

In 2019, we introduced an enhanced internal tracking system to assess the progress of dialogue against defined engagement objectives. As this is a new metric and for some of our engagements formalized engagement objectives have only recently been introduced, we expect future reporting to record increased numbers in terms of engagement progress.

In relation to proxy voting decisions, almost one third of our engagements provided useful and tangible insights.

We engaged with companies individually and in collaboration with other investors. Collaborating with peers helped us convey one consistent message to companies on systemic issues which could severely impact financial markets (i.e. climate change). 13% of our 2019 engagements were collaborative.

52% of our engagement meetings were held with the CEO/CFO or another C-suite representative. In approximately 34% of cases we met the Chair or an independent Board member. 31% of our engagement meetings were conducted with an ESG expert, such as the head of the sustainability department.

Topics addressed during our engagements

Our dialogue with companies covered a wide range of topics as the chart below illustrates. A large proportion of the engagements focused on governance, remuneration, business strategy and capital management.

One engagement meeting will likely address more than one topic. In total we held 358 engagements in 2019.

Level of access to companies during 2019

Level of representation

Level of representation

Number of meetings

Number of meetings

Percentage on the total

Percentage on the total

Level of representation

CEO/CF0 and Other C-Suite

Number of meetings

187

Percentage on the total

52%

Level of representation

Chair and Non- Executive board members

Number of meetings

120

Percentage on the total

34%

Level of representation

Corporate secretary or legal counsel

Number of meetings

50

Percentage on the total

14%

Level of representation

IR

Number of meetings

279

Percentage on the total

78%

Level of representation

ESG expert

Number of meetings

105

Percentage on the total

29%

Level of representation

Other

Number of meetings

39

Percentage on the total

11%

Level of representation

Total engagements

Number of meetings

358

Percentage on the total

 

Topics discussed with companies

Topics

Topics

Number of engagement meetings in which the topic was discussed

Number of engagement meetings in which the topic was discussed

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

Topics

Corporate Governance

Number of engagement meetings in which the topic was discussed

191

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

53%

Topics

Strategy & Business Model

Number of engagement meetings in which the topic was discussed

150

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

42%

Topics

Remuneration

Number of engagement meetings in which the topic was discussed

138

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

39%

Topics

Environmental Management & Climate Change

Number of engagement meetings in which the topic was discussed

133

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

37%

Topics

Transparency & Disclosure

Number of engagement meetings in which the topic was discussed

107

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

30%

Topics

Business Conduct & Culture

Number of engagement meetings in which the topic was discussed

81

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

23%

Topics

Capital Management

Number of engagement meetings in which the topic was discussed

82

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

23%

Topics

Human Capital Management & Labor Standards

Number of engagement meetings in which the topic was discussed

63

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

18%

Topics

Operational Management

Number of engagement meetings in which the topic was discussed

57

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

16%

Topics

Community Impact & Human Rights

Number of engagement meetings in which the topic was discussed

28

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

8%

Topics

Audit & Accounting

Number of engagement meetings in which the topic was discussed

26

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

7%

Topics

Total number of engagement meetings held

Number of engagement meetings in which the topic was discussed

358

Number of meetings in which the topic was discussed expressed as a percentage of total meetings held

 

Canada Asset Management

Views and opinions expressed are presented for informational purposes only and are a reflection of UBS Asset Management’s best judgment at the time a report was compiled, and any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. Commentary is provided at a macro level and is not with reference to any investment strategy, product or fund offered by UBS Asset Management and is provided in Canada generally pursuant to the registration exemption provided for in Section 8.25(2) of National Instrument 31-103 and in Ontario pursuant to Section 34 of the Securities Act (Ontario) and does not purport to be tailored to the needs of the person or company receiving the advice.. The information contained in the materials should not be considered a recommendation to purchase or sell any particular security. The materials and content provided will not constitute investment advice and should not be relied upon as the basis for investment decisions. As individual situations may differ, clients should seek independent professional tax, legal, accounting or other specialist advisors as to the legal and tax implication of investing. Plan fiduciaries should determine whether an investment program is prudent in light of a plan's own circumstances and overall portfolio. UBS Asset Management services offered to Canadian persons are provided by UBS Asset Management (Canada) Inc., a Nova Scotia corporation. UBS Asset Management (Canada) Inc. is an indirect wholly-owned subsidiary of UBS AG and is registered as a portfolio manager and exempt market dealer (in all provinces of Canada), commodity trading manager (Ontario), adviser – commodity futures (Manitoba) and investment fund manager (Ontario, Quebec and Newfoundland), all pursuant to Canadian securities law. Materials may include forward-looking statements. Actual future results, however, may prove to be different from expectations. Past performance is no guarantee of future results. Potential for profit is accompanied by possibility of loss.

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