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Keith Skeoch, Chief Executive Officer Mike Everett, Governance & Stewardship Director Amanda Young, Head of Responsible Investment
STEWARDSHIP ACCOUNTABILITY FORUM 24 November 2015 STANDARD LIFE - - PowerPoint PPT Presentation
STEWARDSHIP ACCOUNTABILITY FORUM 24 November 2015 STANDARD LIFE - - PowerPoint PPT Presentation
STEWARDSHIP ACCOUNTABILITY FORUM 24 November 2015 STANDARD LIFE INVESTMENTS Keith Skeoch, Chief Executive Officer Mike Everett, Governance & Stewardship Director Amanda Young, Head of Responsible Investment STEWARDSHIP Long-term
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STEWARDSHIP
Long-term relationship
Clients Companies Stakeholders
Built on accountability, engagement and trust Reputation earned over a long period Central to our Investment Proposition
Good for our clients The right thing to do
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STANDARD LIFE INVESTMENTS’ HERITAGE
Cadbury Report 1992 Institutional Shareholders Committee Code 2009 UK Stewardship Code 2010 Kay Review 2013 Building Momentum for Effective Investor Stewardship
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CONTINUING JOURNEY
Increasing shareholder rights Increasing societal and policy maker expectation Increasing client demand Increasing global exposure Broadening focus across capital structure Alternative investment propositions
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TWO TEAMS, ONE VISION, SIMILAR MISSIONS
Responsible Investm ent team To be the industry leader in responsible investment, contributing to a sustainable world and a better financial future for our customers Role
- To research, analyse and engage on
environmental and social issues that have a bearing on SLI’s client portfolios.
- Foundations in the UN Global Compact
- Employment issues
- Human rights & community issues
- Environmental matters
- Anti-corruption
Governance & Stewardship team To act in the best interests of our clients and to seek to protect and enhance the value of their investments in accordance with our Governance and Stewardship principles and policy guidelines Role
- To exercise the rights attached to the ownership of
securities by our clients
- To mitigate the risks to client portfolios by a
process of analysis and engagement with companies on matters of Governance and Stewardship
- To exercise influence in matters of public policy
and regulation where these relate to Governance and Stewardship and the interests of our clients
- To be accountable to our clients for our activities
undertaken on their behalves
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ESG ENGAGEMENT: TWO DIFFERENT SKILL SETS
Dialogue on m aterial ESG issues Dialogue on m aterial ESG issues
Responsible Investment Team Responsible Investment Team Governance & Stewardship Team Governance & Stewardship Team
Enhanced ESG Understanding Enhanced ESG Understanding Investm ent Process Investm ent Process
Add value Add value Com pany Operational level Com pany Operational level Com pany Board Level Com pany Board Level
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GOVERNANCE & STEWARDSHIP
Contributing governance insights to the investment process
Analysis of issues including governance change Helping fund managers take account of governance risk– governance health warning Focused engagement programme
Exercising investor responsibilities
Oversight of voting globally Principles & Policy Guidelines ISS proxy voting platform Attending Annual General meetings
Our broader role
Encouraging best practice Taking part in membership organisations Contributing to the policy debate
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ENGAGEMENT
Standard Life Investments approach to engagement
To hold companies to account To promote high standards and best practice
Topics covered include
Reputational risk Nominations process Remuneration Accounting and Auditing
Collective engagement
45% 39% 16%
Engagement Summary 2014
Meetings & other engagements 245 Voting engagements 209 Remuneration consultation 88 Source: Standard Life Investments, 31 December 2014
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VOTING SUMMARY
23% 16% 24% 22% 5% 10%
Graphic Breakdown of Votes against Board Recommendations*
US (23%) UK (15%) Pacific Basin (24%) Europe ex UK (22%) Canada (5%) Rest of World (10%)
12% 35% 28% 25%
Reasons for Votes Against
Board Matters (12%) Remuneration and Share Schemes (35%) Other (28%) Pre-emption/Dilution Matters (25%)
*Excluding Japan We have excluded Japanese votes against management recommendations from the tables as the figures are disproportionately high when compared to other geographical regions and also when compared to other reasons for votes against. This is due to our high instances of votes against board matters in Japan. The issue that dominates the Japanese market is board independence. Although efforts are being made by many investors and corporate bodies to effect change, independent representation on Japanese boards remains low when compared with the UK and US
- markets. It is our policy in Japan to vote against director elections in situations where the board does not have at least two unaffiliated outsiders, although we will not vote against key executives or independent directors. In 2014, the shares we manage on behalf of our clients were voted
against management recommendations on 296 resolutions at Japanese shareholder meetings. Of these resolutions, 92% of votes against management recommendations related to director elections Source: Standard Life Investments, 31 December 2014
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2014 ENGAGEMENT AND VOTING HIGHLIGHTS
Engagement
Sports Direct RSA Hellerman Tyton Severfield Pfizer Afren Vedanta Micro Focus International HSBC Holdings Royal Dutch Shell
Voting
Barclays Burberry Glencore Implenia International Consolidated Airlines Ryanair Samsung Engineering
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BUILDING AN INTEGRATED MODEL
Ethical products Ethical products Focus on change philosophy Add Value
Integration of environmental & social matters
Analysis of risk and opportunity
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DEFINING AND INTEGRATING ESG
Environmental, social and governance factors Assessing performance, risks and opportunities Part of our investment process Use the “Focus on Change” investment philosophy Not about exclusions being good stewards of our clients money
Cyber security Clim ate Change
Rem uneration
Culture Health & safety
Board independence
Access to Medicines Obesity Corruption Biodiversity Labour rights Tax issues Board diversity Freedom of Association Auditors Clean technologies
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EXAMPLES OF ENGAGEMENT 2014
Water risks in shale operations Anadarko Genetically m odified crops BASF Arctic Drilling London Mining* Tax Avoidance BNP Paribas Living wage Cineworld Health and safety in textile industry ABF Bribery and corruption GSK Labour disputes Lonmin Im pacts on biodiversity / indigenous peoples Soco Stranded Assets Glencore Freedom of expression and data privacy Telenor Product recalls General Motors * Now in administration as a result of operations in Sierra Leone Source: Standard Life Investments
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GOVERNANCE & STEWARDSHIP TEAM
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Guy Jubb Global Head of Governance & Stewardship Alison Kennedy Governance & Stewardship Director Jonathan Cobb Governance & Stewardship Director Mike Everett Governance & Stewardship Director Douglas Wilson Governance & Stewardship Manager Joanna McNeill Governance & Stewardship Manager Nicola Robertson Governance & Stewardship Process & Controls Manager Claire Leighton Governance & Stewardship On Desk Support Nick Duncan Governance and Stewardship Manager
We have a dedicated team that focuses on developing and implementing best practice standards. Our team was established in 1992 and is regarded as one of the leading teams in the governance and stewardship arena.
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RESPONSIBLE INVESTMENT TEAM
Andrew Mason Am anda Young Alix Chosson
Head of Responsible Investm ent Head of the Responsible Investment Team 3rd year investment experience at Standard Life Investments, 18 years experience in the industry. Specialist experience includes extensive know ledge of responsible investm ent strategies, trends and them es; high level engagement and integration expertise. Key focus on labour issues. BSc (Hons), SFA Representative Member of FTSE ESG Advisory Committee ex-UKSIF Board Director for six years Responsible Investm ent Analyst Analyst in Responsible Investment Team 2nd year investment experience at Standard Life Investments, 5 years experience in the industry. Specialist experience in com pany analysis, engagement and
- integration. Key focus on hum an rights
MA (Economics & Finance), MA (Portfolio Management) Responsible Investm ent Analyst Analyst in Responsible Investment Team 4th year investment experience at Standard Life Investments, 11 years experience in the industry. Specialist experience of assessing and m anaging ESG risks w ithin com panies. Key focus on anti-bribery & corruption Master of Arts (Hons), Diploma in Sustainable Business, ESRA Certificate
Rebecca Maclean
Responsible Investm ent Analyst Analyst in Responsible Investment Team 3rd year experience at Standard Life Investments, 5 years experience in the industry. Specialist experience of quantifying and valuing environm ental externalities and building integration valuation m odels. Key focus on environm ental m atters BA, MA, Passed all three levels of the CFA Program Responsible Investm ent Graduate Graduate in Responsible Investment Team 1st year experience at Standard Life Investments and in the industry. Specialist academ ic know ledge of environm ental cost benefit analysis and clim ate change m odelling MA Joint Honours (Philosophy & Economics)
Katharina Lindm eier
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