EOS Stewardship Report 2023

2023 was another turbulent year for the global economy as inflation, rising interest rates, tight labour markets and geopolitical shocks fuelled uncertainty. It was also the year in which the impact of climate change was writ even larger with catastrophic flooding across 10 countries in 12 days, the hottest ocean temperatures ever recorded, heatwaves that scorched the entire Northern Hemisphere, and the worst drought in 40 years across the Horn of Africa. At the same time, the energy ‘trilemma’ that defined 2022 – managing climate risks while ensuring energy security and affordable access to energy – continued.

Encouragingly, the US Inflation Reduction Act (IRA) of August 2022 spurred renewable energy and clean tech investment, and energy prices eased in many markets. This helped to reduce inflationary pressures, although the cost of living crisis persisted in many markets. This series of environmental and macroeconomic challenges reinforced the focus of our advocacy and stewardship activities in 2023.

Geopolitical tensions also remained heightened in 2023, with no sign of an end to the war in Ukraine and the destabilisation of the Middle East through the conflict in Israel and Gaza. Against this backdrop, we continued to engage with companies on how they address the geopolitical risks facing their businesses and their approach to safeguarding human rights in high-risk regions.

This report describes our stewardship work during 2023 and the outcomes of these activities. We have followed the structure of the UK Stewardship Code, reporting principle by principle to communicate our policies, processes, activities and outcomes to clients and wider stakeholders. We outline our engagement, voting recommendations, public policy, screening and advisory work carried out on behalf of our clients.

Building on last year’s reporting, we have provided an update on the firm’s diversity, equity and inclusion (DE&I) strategy and the formation of six core DE&I project groups; insights into our engagement approach on worker rights and benefits and the importance of a just transition; highlights of the latest operational enhancements to our client portal; and a detailed update on our work with Climate Action 100+. Examples and case studies are provided throughout to demonstrate how our approach works in practice.