Collaborative Engagements Progress

As a boutique investment manager, ECO Advisors believes that engagement on ESG matters with investee companies is most effectively carried out in collaboration with other like-minded investors. ECO Advisors reviews updates and reports for each ongoing engagement on a quarterly basis, and discloses any changes on this page. The success of each initiative is subjective to the milestones and goals that the initiative organiser(s) has set. The decision to join a collaborative engagement is always communicated to and are made in conjunction with chief staff, so as to inform and be informed by the investment decision making process and to make sure that the activities of the engagement are consistent with our investment and sustainability objectives.

As of September 2021 we have signed onto eighteen collaborative initiatives. As part of most of these initiatives letters are sent to companies in the relevant industry calling for better ESG practices. Thus far we have signed onto or are members of the below initiatives.

 

The 30% Club Investors Group

      • Global mission to achieve at least 30% representation of women on all boards and C-suites globally. 30% represents a critical mass from which point minority groups can impact boardroom dynamics.
      • Focus letters on FTSE350 laggards
      • Members are encouraged to promote the goals through their voting decisions.
      • Next goal: supporting the Parker Review goal for at least one person of colour on every FTSE 350 board. This will be a priority in 2021.
      • First annual report coming out in April 2021
      • Coming out with a toolkit for investors on how to drive diversity in their investments through integration and active ownership in 2021.
      • June 2021 update: Members shared some of the research we’ve done at Aviva Investors as well as key insights from Diversio. A member from CBI presented the Change the Race Ratio. The initiative is supported by the 30% Club which is a founding member. The difference is that this commitment goes further than delivering on the Parker review and the BITC race at work principles in that companies are encouraged to set targets and report on pay gaps. However, firms do have time to deliver on their commitments (reporting 2 years after signing up). A member shared how the Investment Association has put an amber warning on firms that are not disclosing on ethnic diversity. They are providing information to members from their data provider to allow members to vote.
      • https://30percentclub.org/initiatives/investor-group

 

FTSE 350 Votes Against Slavery

      • Letter will be sent to non-compliant FTSE 350 companies who have failed to meet the reporting requirements of section 54 of the Modern Slavery Act 2015.
      • Ongoing, 18 out of 22 companies have now become compliant with section 54 of the Modern Slavery Act 2015.
      • The 2020 VAS engagement finished at the end of 2020. 20 out of 22 target companies became compliant with the Modern Slavery Act 2015. The two remaining companies which were non-compliant as at 31/12/20 were Frasers Group – which posted a modern slavery statement in July 2020 that had not been signed off by a director – and Pollen Street Lending – who we were unable to make contact with and who have now become Alternative Credit Investments plc.
      • Jan 2021: Rerunning engagement in 2021 with FTSE350 companies that have failed to meet the minimum reporting standards of the Act. 
      • Shortlisted for ‘Stewardship Project of the Year’ award
      • Mar 2021: The engagement group realised that Safestore Holdings has its AGM taking place on 17th March so we decided to send a letter detailing this engagement in order to give the company enough time to respond ahead of the AGM. The company responded to our letter within two days having made the changes to comply with the reporting requirements. As such, the final target list was reduced from 62 to 61.
      • Letters to the 61 FTSE350 target companies were sent off last week by post and email. We have heard back from 22 companies so far, 14 of whom have made changes to now become compliant. The other eight are in the process of making changes or have asked for more time to respond. We expect these companies to become compliant soon. We will be sending out a follow up chase email at the start of next week to the remaining 41 companies.
      • May 2021: 48 out of the 62 target companies are now compliant. In the last week, Energean Oil & Gas, M&G and Indivior have all become compliant. Expecting Frasers Group, Hikma Pharmaceuticals, IAG and Premier Foods to be compliant by the end of the month.
      • June 2021 update: 49/61 companies are now compliant. Premier Foods & Hikma Pharmaceuticals have confirmed that their new statement will be available by the end of this week. Frasers Group said the new statement would be ready in April but we have yet to see this statement. We have followed up twice since them but heard nothing back. We are expecting the remaining companies to release their new statements in June & July. We have a call with Sainsbury’s on 21st June at 11am to discuss their statement and approach to modern slavery.
      • November 2021 update:
        • Ashmore Group: The company have created a new website and posted their 2020 statement onto the homepage of the website (it was previously hidden away on a sustainability page). The new 2021 statement will be approved shortly.
        • Coca-Cola HBC AG: The company is compliant however we noticed that Coca-Cola UK have an out of date statement. We contacted the company who responded very positively to our engagement, confirming that a new statement would be uploaded in the coming weeks.
        • Entain: The company published their new 2021 statement on the homepage of the website, however we spotted that this new statement was approved by the CEO & Chair, rather than the board. We contacted the company who were very grateful we raised this with them and committed to amending the statement asap. The company will send through an updated statement soon.
        • Frasers Group: The company was non-compliant at the time of their AGM in September, which led to one supporting investor voting against the financial statements – many thanks to the investor for doing this. We received a response shortly afterwards demonstrating the effectiveness of using our vote to influence corporate behaviour. The company has confirmed that they will publish a new statement within 6 months of the end of their financial year. The old statement has also been moved onto the homepage of the website.
        • JD Wetherspoon: We spoke with the Company Secretary back in September who admitted that there had been oversight by the board in failing to show that board approval had been given for the 2020 statement and rather than retroactively updating the current statement, the new 2021 statement will show that board approval has been given. This will be ready before the end of the year.
      • https://www.rathbones.com/sites/rathbones.com/files/imce/5558_votes_against_slavery_2021_final_16_feb_2021.pdf 

 

Climate Action 100+ 

      • Letter calls for companies to take action to reduce greenhouse gas emissions, consistent with the goal of the Paris Agreement, provide enhanced corporate disclosure in line with the Task Force on Climate-related Financial Disclosures recommendations, and implement a strong governance framework that clearly articulates the company board’s accountability and oversight of climate change.
      • The 160 companies engaged by the Climate Action 100+ initiative represent over 80% of global industrial emissions and are, as a group and individually, critical to progressing the global economy to net-zero emissions by 2050. 
      • In 2020, the initiative developed the Climate Action 100+ Net Zero Company Benchmark, which will be used to publicly benchmark focus companies. The first company scorecards will be released in early 2021. 
      • Nearly half (43%) of companies have set a net zero by 2050 target or ambition in some form, which is an important signal to investors that companies understand and are preparing for the transition. However, only 10% of focus companies have net-zero targets that explicitly cover the companies’ most material scope 3 emissions. 
      • Our subcommittee group, which focuses on Toray Industries:
        • March 2021 update: Last meeting with Mr. Hirabayashi, Corporate Vice President of CSR & Investor Relations was Jan 27, 2021. The company plans to make a public announcement in the spring establishing a clearer & more comprehensive governance structure, setting a net zero target for 2050 for Scope1&2, and disclosing TCFD scenario analyses in terms of 1.5°C, 2.0°C, 4.0°C  
        • April 2021: Company established sustainability committee
      • https://www.climateaction100.org/

 

The Investor Agenda 

      • A collaborative initiative to accelerate and scale up the investor actions that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping average global temperature rise to no more than 1.5-degrees Celsius.
      • Letters thus far include the Investor Statement to Governments on Climate Change and the Investor Statement to EU leaders on Sustainable Recovery from COVID-19.
      • May 2021 update: The founding partners of The Investor Agenda released today a new tool to enable institutional investors to step up action to tackle the climate crisis and accelerate the transition to a net-zero economy. The Investor Climate Action Plans Expectations Ladder and Guidance provides investors with clear expectations for issuing and implementing comprehensive climate action plans, including steps investors can take to support the goal of a net-zero emissions economy by 2050 or sooner. The framework aims to help investors navigate existing expectations and initiatives on climate change. It is inclusive and unique in that it sets out expectations for investors wherever they may be on their climate journey.
      • https://theinvestoragenda.org/

 

CDP

      • CDP runs a global disclosure system for investors, companies, cities, states, and regions to manage environmental impacts. It is the world’s largest, most comprehensive dataset on environmental action. At the request of investors and stakeholders, CDP supports thousands of companies, cities, states, and regions to measure and manage their risks and opportunities on climate change, water security, and deforestation. 
      • June 2021 update: We signed onto the CDP’s newest engagement, the 2021 Global Investor Statement to Governments on the Climate Crisis. This year’s Statement raises climate ambition and increases the specificity of the policy asks. In particular, it asks governments not only for updated NDCs, but also to commit to a domestic mid-century, net-zero emissions target and provide clarity on the transition timetable for each carbon intensive sector.
      • https://www.cdp.net/en
  •  

FAIRR Where’s the Beef?

    • Investor statement highlighting the critical need to reduce global GHG emissions from animal agriculture, and seize the opportunities presented by COP26 to foreground protein production and consumption in the climate conversation. Urges all G20 nations to promptly enact ambitious policies and disclose effective targets for GHG reductions in agriculture within or alongside their National Determined Contributions (NDCs) commitments at COP26.
    • https://www.fairr.org/wheres-the-beef/

 

FAIRR Sustainable Protein Supply Chains

      • Letter calls on multinational food retailers and brand manufacturers to develop an evidence-based approach to diversify protein sources away from an over-reliance on animal proteins.
      • Ongoing, phase 5 is now underway, asking 25 global food retailers and manufacturers to publicly disclose their intentions for transitioning protein portfolios towards lower impact and more sustainable sources. Letter being sent January 26. 
      • September 2021 update: Phase 5 finished. All 25 companies in FAIRR’s engagement now recognise the importance of protein diversification as a material issue for their business. This is in sharp contrast to 2016, when no company was talking about protein, let alone thinking around the commercial and climate opportunities associated with alternative proteins. Public report available in “Statements and Reports”.
      • https://www.fairr.org/

 

FAIRR Global Investor Engagement on Meat Sourcing

      • Letter calls on fast food companies to de-risk their meat and dairy supply chains against climate and water risks
      • Ongoing, milestone reached by engaging six companies
      • 2021 focus continuing on these six companies
      • https://www.fairr.org/

 

FAIRR Overuse of Antibiotics in Protein Supply Chains engagement

      • Antimicrobial resistance (AMR) is now globally acknowledged as a fundamental threat to public health and the global economy. Animal agriculture and factory farming are the largest consumers of antibiotics globally and a key contributor to AMR. It is projected that by 2030, antibiotic consumption in farm animals will rise by 67%. 
      • Engaging with 20 companies on their overuse of antibiotics in their protein supply chains.
      • https://www.fairr.org/ 

 

Engagement with Social Media Companies 

      • Letter calls for social media companies to strengthen controls to prevent the live streaming and distribution of objectionable content
      • Ongoing, several milestones reached. Organisers of initiative have met with target company representatives on several occasions. The target companies appear to be in the process of strengthening controls. 
      • The engagement has been covered by the Financial Times, Responsible Investor, Investor Strategy, Financial Standard and The Logic , Newsroom and NZ Herald
      • NZ Crown-owned investors have committed to an additional 12 months (to mid 2021) of leading engagement with these companies.
      • January 2021: Next focus is board-level accountability and strengthened governance
      • May 2021 update: As a direct result of the engagement,  the charter for Facebook’s Risk and oversight Committee has been updated to state that the Committee will review with management at least annually the company’s assessment of the ways it can be used to facilitate harm or undermine public safety, including through the sharing of content on its services.
      • October 2021: Engagement concluded. Final report in “Statements and Reports”.
      • https://www.nzsuperfund.nz/how-we-invest/responsible-investment/collaboration/social-media-collaborative-engagement/

 

Brazil Anti-corruption Engagement

      • Letter calls on 19 companies to substantially reduce corruption and bribery
      • Ongoing, milestone reached as currently arranging meetings with nineteen target companies
      • April 2020 update: Temporarily suspended due to COVID-19

 

Global Investor Statement to Governments on the Climate Crisis

      • Letter sent to governments as a unified call from investors for governments to raise their climate ambition and implement meaningful policies, including mandatory climate risk disclosure, strengthened national commitments, ending fossil fuel subsidies and phasing out thermal coal 
      • Collaboration between CDP, the Investor Agenda, and IIGCC.
      • September 2021: Second wave of signatories to the statement are being announced during the United Nations General Assembly, which will be followed by Climate Week 2021 in New York, when countries will be in the spotlight to demonstrate their climate ambition. 
      • October 2021: 2021 Global Investor Statement to Governments on the Climate Crisis released.
      • https://www.iigcc.org/resource/global-investor-statement-to-governments-on-climate-change/

 

Access to Medicine and SDG3

      • Letter calls on pharmaceutical companies to access new markets and increase reporting
      • Ongoing, milestone reached by engaging nineteen companies
      • June 2021: Signed onto updated letter stating that we will review and take into account the analysis generated from the Access to Medicine Index as appropriate in the ESG analysis we conduct on the companies we invest in.
      • https://accesstomedicinefoundation.org/

 

Investor Support for Deforestation-free Procurement Acts in the U.S.

      • Legislatures in both NY and CA are considering legislation to support Deforestation-Free Procurement by the government. The Bills require certain government contractors and subcontractors to have “No Deforestation, No Peat, No Exploitation” (NDPE) policies and do some public reporting on their forest-related practices. The 2021 letter calls for the development of and compliance with NDPE policies, drive transparency, and potentially lead to deforestation-free government bonds — all to the benefit of investors. 
      • Ongoing

 

Cerrado Manifesto Statement of Support

      • Partnered with FAIRR, the Statement demonstrates to agricultural producers operating in the Amazon’s Cerrado region that there is market and capital support for zero deforestation.
      • https://cerradostatement.fairr.org/

 

PRI Investor Working Group on Sustainable Palm Oil

      • Unified investor voice in support of sustainable palm oil and the Roundtable on Sustainable Palm Oil, engaging with companies in support of more sustainable practices.
      • Ongoing, milestone reached: 35 letters have been sent, 27 companies have responded, over 15 meetings have taken place.
      • November 2020: Following the recent UK consultation on deforestation supply chain due diligence requirements from companies, today the UK’s Department for Environment, Foods & Rural Affairs has confirmed they will move ahead with the introduction of this legislation. In addition the EU Commission are also looking for high-level input into potential demand-side measures they can use to address imported deforestation and degradation.
      • https://www.unpri.org/sustainable-land-use/pri-investor-working-group-on-sustainable-palm-oil/5873.article

 

SEC petition against raising resubmission thresholds for shareholder proposals

      • The SEC plans to raise the resubmission thresholds for shareholder proposals in the U.S. from the current 3%/6%/10% to approximately 6%/15%/30%, investors are invited to submit public comments.
      • Ongoing

 

CDP – Science Based Targets Initiative

      • The Science Based Targets Initiative (SBTi) provides companies with a roadmap for reducing their carbon emissions, including how much and how quickly they need to reduce emissions. SBTi offers offers a range of target-setting resources and guidance, and independently assesses and approves companies’ targets in line with its strict criteria.
      • In partnership with the SBTi, this investor initiative involves a letter sent to target companies that encourages them to sign the SBTi Business Ambition for 1.5°C Commitment letter, which is the mechanism for formalising the commitment to reach net-zero emissions by no later than 2050. 
      • Sept 29 2021: CDP publicly announced the campaign to the media. The campaign was supported by 60% more financial institutions than last year and the engagement focuses on 1600+ companies. In the last campaign 96% of companies said that investor pressure influenced their decision to join the Science Targets.
      • https://www.cdp.net/en/investor/engage-with-companies/cdp-science-based-targets-campaign

Disclaimer

ECO Advisors – Website Disclaimer

The contents of this document are communicated by, and the property of ECO Advisors.

Ethical Capital Opportunity Advisors Ltd (“ECO Advisors”) is authorised and regulated by the United Kingdom Financial Conduct Authority (“FCA”).

Products and Services

The information contained herein is current at the date of publication, but is subject to change without notice. ECO Advisors has expressed its own views and opinions on this website, and these may change without notice. This website is not directed at you if ECO Advisors is prohibited by any law of any jurisdiction from making the information on this site available to you and is not intended for any use that would be contrary to local law or regulation. None of the information contained on this website is intended to constitute any offer to sell or an invitation or solicitation of an offer to buy any product or service by ECO Advisors and must not be relied upon in connection with any investment decision. Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be available in all jurisdictions. Accordingly persons are required to inform themselves of and observe any such restrictions. Nothing in this website should be construed as investment, tax, legal or other advice.  The information on this website is intended only for the use of eligible clients, and is not intended for retail investors.

Risk Warning

Past performance is not necessarily a guide to future performance. The value of investments and the income of any financial instruments mentioned in the website may fall as well as rise, and investors may get back less than the amount originally invested. Fluctuations in exchange rates may have a positive or an adverse effect on the value of foreign-currency denominated securities and financial instruments. Certain investments involve an above-average degree of risk and should be seen as long-term in nature. The investment products and services described in the website may have tax consequences. Any tax reliefs referred to are those currently available and their value depends on the circumstances of the individual investor. You acknowledge that levels and bases of taxation may change, and that ECO Advisors does not provides tax advice. You should consult your own tax advisor in order to understand the tax consequences of the products and services described in the website.

Disclaimer

I certify that I am not a US person. ECO Advisors is not registered as an investment advisor with the SEC and therefore the information contained in this website is neither directed at nor intended for US investors.  I also certify that I am not a UK retail investor. The information on this website is neither directed at nor intended for UK retail investors.