Why do we engage?
We might ask our asset managers to engage when there is an opportunity to improve or change a way a company is run or is behaving. For example, we might encourage them to adopt more environmentally friendly policies, or we advocate for improvements to be made to a company’s corporate governance.
When would we collaborate?
RLAM evaluates the benefits of collaborative engagement on a case-by case basis, and will favour working with other shareholders when:
- A company hasn’t responded to one-on-one engagement, or their response has not been satisfactory
The situation is serious enough that moving to a collective meeting is appropriate
- Partnering with others would lead to greater access to management or the board, or provide them with a greater chance to influence
- Working with local partners could improve engagement efforts through their physical presence and/or understanding of local practices
- The majority of RLAM’s public policy work is focused in the UK, where we have the greatest asset exposure, but they may undertake advocacy in other markets if it’s material to our investments or important for our customers.
Who do RLAM collaborate with?
RLAM commits their time and expertise as advisors to trade associations or bodies that advocate good stewardship practices, such as:
What do RLAM do?
RLAM work with a number of organisations and initiatives to help improve and influence company behaviour.
FRC advisory group
RLAM are members of the FRC advisory group for the future of corporate reporting. In 2019, they collaborated with the FRC in their work on things such as climate risk in financial services and stewardship code consultation.
The inherent environmental and social risks faced by the mining industry as a result of its operations have long been a topic of international concern. Tragedies like the Brumadinho disaster have had devastating effects on the community and local environment. Following this disaster, RLAM took part in a collaborative engagement effort with the Church of England by co-signing a letter requesting clearer reporting and transparency measures be put in place. In addition, RLAM’s RI team created its own tailings dam database based on research and direct engagement with the four largest mining companies in the UK.
Climate Action 100+ (CA100+) and Institutional Investor Group for Climate Change (IIGCC)
RLAM is a signatory of the CA100+, and its European branch, the Institutional Investor Group for Climate Change (IIGCC). CA100+ has over 450 investor signatories with nearly $40 trillion USD in assets under management. This initiative aims to encourage the world's largest corporate greenhouse gas emitters to take necessary action on climate change.
RLAM is an active member of the IIGCC. They co-lead the engagement with European utilities providers, and are also a working group member in the Portfolio Alignment Investment Initiative (PAII), which looks at how investors can align their portfolios with the goals of the Paris Agreement.
Just transition was a request in the Paris Agreement signed in 2015. It represents an effort to move to a low carbon economy in a way that’s sustainable, and doesn’t create a skills gap for those who are directly or indirectly employed in the traditional fuel sector. In 2019, RLAM signed the ‘Statement of Investor Commitment to Support a Just Transition on Climate Change’, a statement endorsed by 143 investors representing $9.1 trillion USD in AUM.
These are just a few examples of how we ask our asset managers to consider working as part of a larger group to achieve the best possible outcomes for our customers. To find out more, read our case studies.