Engagement of Etica Sgr, Voting and Dialogue with Companies

Engagement of Etica Sgr, voting and dialogue with companies

What is engagement in the investment world? The term engagement refers to the activities of dialogue between investors and companies and the exercise of voting rights connected to the shareholding.

The objective of the engagement activity is to establish an ongoing dialogue over time and constructive on issues of sustainability and social responsibility .

The engagement activity of 2017

Let’s see specifically how Etica Sgr’s engagement activity was developed in 2017.

Voting activity: active ownership

voto 270x300 In 2017 the active shareholding of Etica Sgr was aimed at 17 companies , of which 11 Italian, 3 Japanese and 3 American. Etica Sgr undertakes to physically attend the Board of shareholders of the Italian companies in which the funds are invested. A certain fact is not negligible, to make the comparison more and more profitable by involving the Board members in the dialogue.

In particular, specific attention was given to the scope of governance in relation to the following topics:

  • management of gender diversity , in relation to the presence of women in the Boards of Directors;
  • remuneration policies ;
  • independence of the members of the Board of Directors ;
  • dividend policies;
  • purchase of treasury shares .

Activities of dialogue with companies

Dialogue-ethics-SGR

The dialogue activity for Etica Sgr aims to influence and push companies towards sustainable good practices and behaviors .

For this reason, this activity is not limited to the companies in which the funds invest or are part of the Investible Universe.

In fact, the activity can go further and involves other realities, especially if it is carried out with international networks of responsible investors with whom Etica Sgr collaborates. With regard to dialogue activities, the strategic areas identified by
Ethics Sgr are:

      • Climate change.
      • Human rights along the supply chain.
      • Tax optimization.

Why does Etica Sgr believe in engagement?

Etica Sgr, which has always been committed to sustainable and responsible investments , considers engagement to be an essential and strategic element of its business. The engagement activity is not limited to the single shareholders’ meeting in which the right to vote is exercised, but develops during the year in a continuous dialogue. The objectives of which to monitor progress over time through a patient journey are precise, the aim is to highlight companies the opportunities, also in terms of business, to assume increasingly responsible conduct , with a view to adapting the company’s business to environmental and social changes taking place.

engagement

Our action is aimed above all at soliciting reflection and action on aspects related to the environment, to the social, to governance and for this reason we undertake paths for improvement with company interlocutors. Above all in a context such as the current one, where governments, companies and citizens are called to do more to achieve sustainable development.

The importance of the engagement activity for Etica Sgr is confirmed by the fact that, in 2018, the figure of Corporate engagement and network manager was set up, which deals with managing the engagement activity on sustainability issues realized by Etica Sgr independently or within the national and international networks to which it belongs.

Ethics Sgr, engagement and SDGs: unity is strength

The shareholders season 2017 Etica SGR has chosen to associate, for the first time, the issues addressed in the activity of engagement with companies to Sustainable Development Goals (Sustainable Development Goals – SDGs) of the United Nations, with the aim of stimulating the dialogue with companies in a broader, global and shared perspective: that of sustainable development .

These Goals commit the governments of the 193 member countries of the United Nations to promote sustainable development of the planet, touching on issues such as health, education, gender equality, the fight against hunger and poverty and environmental protection.

SDGs

What are the main areas tackled by Etica Sgr?

Find out more by clicking the following items.

Corporate governance

The subject of corporate governance is linked to elements such as the independence of the Board of Directors, the separation between the Chairman of the Board of Directors and the Managing Director / General Manager, the gender diversity in the Board of Directors and the remuneration systems.

This issue plays an important role in the analysis of Etica Sgr, because a well-run company has a better chance of giving good economic results in the long term.

OBJECTIVE 5: Gender equality

 Reaching gender equality and empowering all women and girls. The main obstacle to change is the persistence of a gender gap, often highlighted by the fact that women are still under represented in managerial positions and / or remunerated less at the same position.

OBJECTIVE 8: Digitious work and economic growth

 Encouraging lasting, inclusive and sustainable economic growth
full and productive employment and decent work for all. As part of the eighth Sustainable Development Goal, Etica Sgr dealt with governance issues relating to corporate remuneration policies.

OBJECTIVE 12: Consumption and responsible production

 Guarantee sustainable production and consumption models. One of the Goals of the Sustainable Development Goal “Consumption and Production Responsible” encourages companies, especially large multinational companies, to integrate sustainability information into their annual reports.

The commitment to face climate change

Etica Sgr has always been active in terms of climate change, a commitment that is realized by excluding investments from sectors that have a particularly impact in terms of climate-changing gas emissions, such as the oil or mining sector, and choosing the most virtuous companies from the point of environmental sight . With the engagement activity Etica Sgr strengthens and amplifies the commitments undertaken as a sustainable and responsible investor, encouraging companies in which it invests in developing strategies that are increasingly efficient and consistent with the Sustainable Development Goals linked to climate change.

OBJECTIVE 6: Clean water and hygiene

 Ensure the availability and sustainable management of water and sanitation facilities to all. The United Nations push towards greater
responsibility in the use of water resources. We must achieve adequate and fair access to sanitation for all, reduce pollution and protect and restore water-related ecosystems.

OBJECTIVE 13: Acting for the climate

 Promote actions, at all levels, to combat climate change . Climate change is a global challenge that has no boundaries. Greenhouse gas emissions from human activities are currently at their highest level in history. In this context, Etica Sgr is committed to guiding companies towards a low carbon economy, urging the reporting of emissions and the reduction of consumption, favoring the development of renewable energy.

OBJECTIVE 15: Life on earth

 Protecting, restoring and promoting sustainable use of the Earth’s ecosystem, sustainably managing forests, combating desertification, stopping and reversing land degradation and halting the loss of biological diversity . The United Nations considers it important to mobilize and substantially increase the financial resources to conserve biodiversity and ecosystems. Etica Sgr therefore urges companies to adopt responsible procurement policies for timber, reducing deforestation caused by palm oil suppliers and policies to respect animals.

Human rights along the supply chain

The issue of human rights is of crucial importance, especially in those countries characterized by low-stringency legislation, where many companies operate through their suppliers. Etica Sgr has always been careful to respect human rights in the selection and monitoring processes of the supply chains of companies in which its funds invest. The engagement action is aimed at soliciting the Boards of the companies on the values ​​of social and environmental responsibility also towards their suppliers. It is important to encourage the reporting of internal processes, such as supply chain audits, to avoid incidents of discrimination or exploitation such as child or forced labor.

OBJECTIVE 8: Decent work and economic growth

 Encouraging economic and lasting, inclusive and sustainable growth, full and productive employment and decent work for all . For Etica Sgr a sustainable supply chain is necessary and at the same time highly rewarding. At the forefront of campaigns against the violation of human rights, Etica Sgr draws the attention of companies on the policies for supply chain management and workforce procurement practices, so that respect for the environment and human rights is protected throughout the supply chain.

OBJECTIVE 16: Peace, justice and strong institutions

 Promoting peaceful and more inclusive societies for sustainable development ; offer access to justice for all and create efficient, responsible and inclusive bodies at all levels . The United Nations requires the planet to reduce illicit financial and arms flows by 2030 and combat all forms of organized crime. It is important for national institutions to strengthen themselves, including through international cooperation, to prevent violence and combat terrorism and crime.

Tax optimization

Investors are increasingly turning their attention and interest into the business conduct of the companies in which they invest. Consequently, for a company it is strategic to reconcile economic growth with a correct distribution of resources, adopt transparent tax management and in line with current legislation, appropriately remunerate all stakeholders, report in an integrated manner its business activity. .

OBJECTIVE 10: Reduce inequalities

Reduce inequality within and between nations . Reducing national and international inequalities is perhaps one of the most challenging objectives. In fact, few resources are available for the poorest countries to improve their situation. The Sustainable Development Goal 10 draws attention to this aspect monitored through specific indicators, including social, economic and political inclusion of citizens. Reducing inequality is also and above all a necessity because, beyond a certain threshold, inequality also damages economic growth.