ESG and sustainable investing How will 10,432 votes help with sustainable investing?

Acting as good stewards of our clients' assets is critical to our sustainable investing activities.

06 Aug 2020

Good stewardship is key in sustainable investing

UBS Asset Management began investing sustainably over twenty years ago. During that time we have seen ESG rise to the very top of our clients' investment agenda.

Good stewardship of our clients' assets is a critical to our sustainable investing activities, which is why we regard engagement and proxy voting as intrinsic parts of the investment process.

Our 2019 Stewardship Report details our approach to stewardship and highlights some positive outcomes from our dialogues with companies.

This Stewardship Report is produced annually, a practice we have kept with for over two decades. This is to ensure that our proxy voting and engagement activities are transparent and a matter of public record.

ESG and sustainable investing

Stewardship by the numbers

Stewardship activities in 2019

358

company engagements conducted

10,432

votes casted

104,372

resolutions voted on

Our dialogues and sharing of best practice are influencing corporate behavior and we are starting to see a number of positive outcomes.

ESG and sustainable investing

Outcome of our engagements – a case study

Topics addressed: Transparency & Disclosure, Environmental Management & Climate Change, Community Impact & Human Rights

The company was selected for engagement due to:

  • Insufficient ESG disclosure 
  • Lack of evidence about the reduction of corporate environmental footprint 
  • Lack of communication about its approach to premium products, including plant-based, low sugar, and organic products

Based on our initial research, we encouraged the company to use best practice frameworks for disclosure, take actions to reduce GHG emissions, establish a water and animal feed / treatment strategy, and increase information on initiatives to grow the share of healthy / premium products.

Outcome

Progress is proving positive. A lengthy engagement took place, where we explained the reasons and rationale for engaging and also shared expectations / recommendations for improvement (including sharing of best practice examples.)

A follow-up was held following release of the new corporate social responsibility (CSR) report. We saw significant improvements around reporting. The company now uses the Global Reporting Initiative (GRI) framework and works with an external consultant to continue improving disclosure. It's also engaging with FAIRR on enhanced environmental practices. More information has been shared by the company on their strategy towards premium / more nutritious foods.

We continue to engage to encourage the company to:

  • Extend its water strategy to its suppliers 
  • Set carbon reduction targets for its suppliers.

For more engagement case studies, read the UBS-AM Stewardship Report 2019(PDF, 4 MB).

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ESG and sustainable investing

How we engage and what did we speak about?

How do we engage?

Our aim is to build relationships with company management to foster healthy dialogue and enhance performance on a variety of issues.

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 UNGC violations. They covered 231 companies across regions and sectors. The majority had global operations and supply chains but were headquartered in developed markets.

In 2019, we introduced an enhanced internal tracking system to assess the progress of dialogue against defined engagement objectives. 23% of our company engagements showed progress against identified areas for improvements to manage risks and take advantage of new opportunities.

Collaborating with other investors

We engage with companies individually and in collaboration with other investors.

Collaborating with peers help 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.

>50% of engagement meetings are with C-suites

52%

meetings with CEO/CFO or C-suite

34%

met with Chair or independent Board member

31%

with company’s ESG expert

Topics addressed during our engagements

Our dialogue with companies covered a wide range of topics. 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.

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