Voting

ECO Advisors believes that ESG driven corporate engagement and voting in areas of environmental, social and governance risks can increase the ability of firms to create long term shareholder value. Where we own equity positions in the long portfolio, ECO’s voting activities are conducted in-house and we conduct our own reviews and analyses using multiple sources of information, including ESG data and company reports. All voting decisions are communicated to and are made in conjunction with chief staff, so as to inform and be informed by the investment decision making process. ECO expects to vote in line with management, except in cases where there are grounds for concern about the ESG-related effect or standard of an outcome. ECO may vote against a management resolution to express dissatisfaction if we believe that the resolution falls short of ESG best practice, especially when looked at on a peer relative basis.  

We support shareholder and board initiatives to work towards Paris Agreement alignment, TCFD disclosure, low carbon initiatives, greenhouse gas emissions transparency and other environmental reporting. In companies with a market cap of USD $50 billion, we expect to see Paris Agreement alignment, or measurable steps being taken towards alignment. If not, we will communicate our expectations to the company. We encourage transparency and data around environmental, social and governance factors. We often support shareholder proposals for written consent and to call special meetings. ECO Advisors has specific guidelines for voting on gender diversity in boards and executive pay available for viewing in the investor portal.

In all cases where ECO Advisors has voted against management for one or more proposals ECO Advisors will send an email to the company’s investor relations team communicating the voting rationale.  ECO Advisors may deem it necessary to act collectively with other investors on an engagement matter in order to best influence an investee companies’ management. 

ECO Advisors has voted at 100% of the meetings where we were eligible to vote (as of September 2021). As of July 2021 we have voted in favour of 91% of shareholder proposals related to ESG, and abstained or voted against 14% of executive pay proposals due to concerns around pay levels, structures, or insufficient ties to sustainability. We have communicated with every company where we abstained or voted against management, including 1-1 meetings. Since inception, either directly or collaboratively, we have engaged with over 600 companies held in our portfolio (long and short).

 ECO Advisors is not an activist fund, and thus we do not regularly escalate stewardship activities beyond voting and participating in collective engagement initiatives, which usually consist of signing and delivering statements to particular sectors or companies encouraging the adoption of ESG best practices. We may support our collective initiatives’ escalation strategies if deemed fit in cases of non-compliance.

In regards to voting, as voting is specific to companies in our long book, and therefore ESG leaders, we do not expect regular escalation to be necessary, although ECO will engage directly with a company through a written communication in cases of votes against management. In rare cases where we see companies failing to respond to the above forms of engagement or in cases deemed necessary as per ECO’s discretion ECO Advisors will escalate stewardship by contacting the company’s board and senior management.

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