Our engagement plan identifies 12 key themes and 37 related sub-themes. We find this breadth of coverage is necessary to reflect the diversity of the issues affecting companies in our global engagement programme.
We review our engagement plan every year to ensure it is up to date and reflects client priorities. For 2022, we have four priority themes – human and labour rights, climate change action, human capital, and board effectiveness and ethical culture.
Respect for human and labour rights is a priority theme as this underpins a company’s wider corporate culture, business ethics and enterprise risk management, all of which affect the creation and preservation of long-term value. As the conflict in the Ukraine intensifies, our engagement on human rights becomes ever the more critical and the latest details of our approach can be found here.
Climate change continues to be the biggest single issue of concern for long-term investors. Society is facing a climate emergency, with only around a decade in which to take the necessary action to avoid the worst of the impacts threatening societal welfare and stability. The required pace of transition poses many risks to traditional business models through new forms of competition, regulation and physical risks, as well as offering opportunities.
While economic activity has bounced back in the wake of the Covid-19 pandemic, many sectors continue to face labour shortages forcing companies to re-evaluate their employee value proposition in order to retain staff. Important aspects of successful human capital management include diversity, inclusion and full representation of workers; fair wages, incentives and benefits; and health, safety and wellbeing.
Finally, there is considerable evidence that board performance is vital to the long-term success of a company. We believe that boards should be composed of directors with technical skills aligned with the strategic needs and direction of the company and a diversity of perspectives, to improve decision making. Also, boards must take responsibility for the ethical culture of a company.