Responsible Investors and the cotton supply chain Kevin Thomas, - PowerPoint PPT Presentation

ENGAGING WITH COMPANIES ON SUPPLY CHAIN PRACTICES Responsible Investors and the cotton supply chain Kevin Thomas, Senior Analyst, SHARE Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

Why is it important for pension funds and other investors to be involved? For companies : For companies : For investors : For investors : • • Concerned about duty to Concerned about duty to • • Reputational risks can Reputational risks can shareholders shareholders affect returns affect returns • • Can be influenced by Can be influenced by • • Better management of Better management of engagement and/or engagement and/or ESG issues tends to ESG issues tends to proxy voting proxy voting correlate with better correlate with better overall management overall management Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

What have investors done to address child and forced labour? • Participating in the Responsible Sourcing Network • Engaging with companies in their portfolios to encourage adoption of the Responsible Cotton Pledge and better supply chain practices • Jointly lobbied the Uzbek government and key international decision-makers about the issue Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

What can Canadian investors do to address child and forced labour? • Engaging with Canadian companies: • Gildan Activewear • Hudson’s Bay Company • Canadian Tire • Reitman’s • Loblaw Companies (Joe Fresh) • Retail Council of Canada Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

What we’re hearing back from companies • Loblaw becomes first Canadian company to sign Cotton Pledge (October, 2013) • Most have a general policy against child labour but are not adopting measures to track country-of-origin information for cotton Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

Responsible sourcing is a responsible investment issue • SHARE raises a range of responsible sourcing issues with companies in pension portfolios: • Bangladesh worker health and safety • Conflict minerals in electronics, auto parts, etc • Precarious employment • Environmental impacts • Human rights in the mining sector Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

Responsible Pension Investment Asset Selection Active Ownership Screening Proxy Voting Integration Engagement Targeted/Impact Securities Investment Class Action Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

Implementing Responsible Investment What can a pension plan do? • Ask managers to explain ESG approach and resources • Become a SHARE affiliate member • Review proxy voting reports from all equity managers • Request quarterly or annual report on manager ESG activities • Join in collaborative shareholder engagements Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

Implementing Responsible Investment Trade Union Investor Initiatives • Trustee training • Engaging with companies • Filing shareholder proposals • Organizing proxy voting Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525

Suite 1200, 1166 Alberni Street, Vancouver, BC V6E 3Z3 Canada T 604 408.2456 F 604 408.2525