Being Responsible on Purpose
Our latest quarterly report on responsible investing highlights something that’s become vital for businesses to define – their purpose.
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06 Dec 20233 min
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Using our influence as shareholders to help
As shareholders, we at Coutts have been using our influence to help companies address the kind of environmental, social and governance topics that can underpin their purpose. We look at how they consider the interests of their customers, employees, communities and suppliers when making decisions.
For example, most of our shareholder voting activity over July, August and September concerned remuneration – ensuring fair pay across the board as many lose their jobs this year – and board structure, focusing on diversity. Both aim to ensure companies are treating their people well.
Overall, we voted at 36 company meetings, and opposed one or more resolutions at seven of them – showing how we’re committed to holding companies to our high standards even if it involves going against their management. The number is lower than the previous quarter because most companies hold their annual meetings in the spring, so that tends to be when most shareholder voting takes place.
We also had detailed discussions with 46 companies that feature in our portfolios and funds on 162 environmental, social and governance issues. The vast majority of those conversations were about their plans to tackle climate change, their behaviour towards their people, and how they’re serving society during the pandemic.
Strong purpose can mean long-term value
Leslie Gent, Head of Responsible Investing at Coutts, says, “We want to ensure that the companies in which we invest on behalf of our clients are well run, support society and act on environmental issues.
“Not only is this good for the world, it can have a positive impact on their long-term value, and their ability to help us deliver robust returns for clients.
“Corporate purpose has become a very important element of achieving all this. Businesses need to figure out and articulate exactly how they plan to benefit not just their shareholders, but the world around them too.”
See below for more detail on our voting and engagement record in the third quarter of the year. And read more about responsible investing at coutts on our dedicated page.
EOS CASE STUDY: BOOHOO
An example of how our voting and engagement partner EOS works with businesses on environmental, social and governance issues
EOS contacted online fashion retailer Boohoo following press allegations about its employment practices in Leicester. The company told EOS it had commissioned an independent review to take a good look at its obligations and duties of care regarding those working within its supply chain. It said the review’s recommendations would be incorporated into its future strategy.
EOS also raised broader concerns about the sustainability of the fast fashion business model generally, and urged the company to be more transparent on its environmental impact.
Lisa Lange, Theme Lead: Pollution, Waste and the Circular Economy at EOS, explains, “Innovative business models are needed that move away from a focus on the number of purchases as a growth model, to consider fashion as a service that fosters the reuse or recycling of garments.”
OUR VOTING AND ENGAGEMENT IN NUMBERS, Q3 2020
When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.
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