Report

Global SMID Equity Engagement* Annual Report, 2024

Constructive engagement and positive change

In this report we provide colour on the ongoing, mostly constructive, dialogues we are having with our investee companies. In many cases the direction of travel is positive. However, the pace of change needs to accelerate and we plan to re-double our efforts during 2025. We will continue to prioritise human capital-related topics for dialogue, encouraging companies to provide for the financial, physical and mental wellbeing of their employees.

Fast reading

Global SMID Equity Engagement – formally called SDG Engagement Equity – has the twin aims of generating long-term investment returns, while also realising positive social and environmental outcomes. Our approach is a result of the growing awareness among investors of the role they have to play in supporting sustainable business practices. Our belief is that progress towards, and ultimately the attainment of, the SDGs is not a zero-sum game, but is instead a shareholder value creation opportunity.
Many people are affected by the issue of mental health, and this has been particularly apparent over the last few years amid the pandemic and the cost-of-living crisis. Against this backdrop, we engaged with about 60% of the portfolio during 2024 on this topic. We will continue with various dialogues – both positive and difficult – during 2025, while also evolving our expectations.

We believe that – with our engagement – emissions reductions can be expedited, while the resilience and sustained future success of the companies, can be enhanced. In 2025, we will continue to engage with our more carbon intensive holdings, encouraging capital allocation to mitigate business risks and capitalise on commercial opportunities.