ESGW and ESG Stewardship
We firmly believe the actions of companies and their executives affect the long-term interests and value for shareholders.
Actively exercising our stewardship responsibilities is an integral part of Vinva’s approach to ESG. Stewardship is also known as active ownership.
Vinva’s stewardship approach includes the following:
- Voting at shareholder meetings
- Engagement with current investee companies on ESG issues
- Participating in class actions
Our ESG Stewardship Policy sets out our position on corporate governance issues such as proxy voting, engaging with investee companies on governance, environmental and social issues as well as class actions and reporting. This Policy has been approved by both our ESG Stewardship Committee and the Vinva Board of Directors. We take into account guidelines and standards of various groups, including the Australian Stock Exchange, the Australian Council of Superannuation Investors, the UK Corporate Governance Code and the ICGN Global Stewardship Principles. Our Policy will be reviewed regularly to ensure it remains relevant.
Vinva is a signatory to the Principles of Responsible Investment. Our approach is closely aligned with these Principles.
Voting rights are part of shareholder value and we therefore aim to vote on all resolutions at annual and extraordinary general meetings held by companies in which we invest. This includes all companies in the S&P/ASX300 index and the MSCI Developed World ex-Australia Equity Index. Our policy is designed to ensure that we vote proxies in the best interest of our clients.
We use our best efforts to exercise our voting rights, however, in some circumstances it may be impractical or impossible for us to vote. For example, in international markets where share blocking applies we typically will not vote due to liquidity constraints. We will also not vote when manual voting via fax is required.
Environmental, Social and Workplace issues
Vinva considers the financial and economic implications of environmental and social issues and their impact on companies’ operational efficiency and financial performance. We systematically incorporate these factors into our investment process, collecting proprietary data on a number of environmental, social, governance and workplace factors (ESGW).
In the past there has generally been a stronger economic link between governance and future company performance. In relation to governance, we assess stocks based on multiple factors including board quality and experience, board independence, independence of the audit and remuneration committees, the quality of risk management systems, the quality of management and compensation policies.
Every company we cover is given an ESGW rating which recorded on a daily basis and a full history of these is retained. We also collect data on other relevant ESGW issues as they arise over time. For example, in the past we have measured the potential impact on earnings around the introduction of an emissions trading scheme, the performance of firms around workplace safety issues and the level of employee turnover and engagement at different firms.
From a proxy voting perspective, the overall principle for voting on environmental and social proposals focuses on how the proposal may enhance or protect shareholder value in either the short-term or long-term.
We encourage companies to consider whether they have a material exposure to climate change risk by reference to the recommendations of the Financial Stability Board’s Task Force on Climate- related Financial Disclosures (TCFD) and, if they do, to consider making the disclosures recommended by the TCFD.
A comprehensive record of voting is provided on a quarterly and annual basis to clients. This report includes every resolution voted and records our reasoning for any vote AGAINST management. A more detailed proxy voting report (including analysis and outcomes of voting and any company engagement) will be provided half yearly. Aggregate voting statistics will be disclosed annually on our website as required by the Financial Services Council.
In addition to voting, Vinva will normally enter into dialogue with a company if we have concerns in relation to corporate governance, environmental and social issues. Engagement may be in the form of correspondence, phone calls or meetings.
If you have any questions regarding this Policy, please contact us as follows:
Vinva Investment Management Limited
Level 13, 10 Bridge Street
Sydney NSW 2000
Tel: +61 2 8298 4700
Fax: +61 2 8298 4777