Half year results progress – Engaging with industry and using our influence

Ahead of our Half year results for 2023, we’ve been looking back at the progress we’ve been making against our strategic priorities - Asia, Sustainability, Alternatives and UK savings and wealth.

In the blog below, our Head of Stewardship, Andy Mason, discusses some of our 2023 milestones in the Sustainability landscape – successful engagement with the mining industry and collaborating with investee companies to create better standards.

Earlier in the year, we shared the work we’ve been doing to engage with some of our largest mining holdings following incidents of unacceptable workplace behaviours and a continued lack of female representation on boards.

A turning point in the scrutiny of companies came in 2022, when an inquiry in Australia highlighted severe workplace practice issues including sexual harassment, assault, sexism and racism in major mining companies with limited consequences. As asset managers, we have a responsibility to engage with companies in order to mitigate serious reputational and financial damage to the firms, and the wider industry, all with a view of appropriately stewarding our clients’ capital.

By implementing a Diversity & Inclusion policy, we also produced a position statement outlining exactly what is expected of investee companies in relation to diversity and inclusion. Some companies have policies that are great in theory but are never followed through; we believe in putting these principles at the heart of our active engagement with companies we invest in. This work culminated in the creation of a statement containing recommendations for companies in the industry to build psychologically safe spaces for people of all backgrounds and demographics to work.

Later in the year we backed up this work by introducing new voting priorities across a range of issues. It’s absolutely critical to us that we use our influence to turn conversations into action and holding organisations to account. These include:

• Taking voting action against companies that do not have board oversight of climate change
• Voting against remuneration where the cost-of-living impacts on customers and employees has not been fully considered and,
• Voting actions against US companies that do not have 30% female board representation.

So, what’s changed since then? Well, our work with the mining industry has been supported by key players including CEOs of major companies including BHP and Rio Tinto, and the International Council on Mining and Metals. This endorsement shows that we are moving in the right direction and that by working with our investee companies we can achieve positive outcomes.

Looking ahead into H2 and beyond, we’re keen to move past the Boardroom, and ensure that the wider workforce of organisations is held accountable to these standards. Looking even further ahead, we’ll be expecting 40% of board to be female in UK-listed investee companies by 2025, and we need to see further representation of ethnic minorities, too.

I believe that we have the tools, influence and teams to continue to drive real, positive change in challenging industries and I’m proud of the work that we have done so far. It sets a strong foundation for the future.