01 03.3 Collaborative engagements Principles 7 10 Introduction 02 Sustainable investing In some cases, collaborative engagement offers the 2. Ce res Food Emissions 50 03 most effective way to achieve engagement objectives in Several of our funds are themed around sustainability, Active stewardship the best interests of our clients. Collaboration with other Looking ahead to 2022 03.1 Our engagement approach food and water. The food sector is closely linked with investors is particularly important when we have major climate change as the global food system is responsible 03.2 Engagement outcomes concerns but only small holdings; we can have a greater for approximately one-third of all global GHG emissions1. by theme impact by working together. While we led the majority That is why we identified the intersection between 03.3 Collaborative engagements of our engagements ourselves in 2021, we undertook Our intention is to expand and intensify 03.4 E scalation where initial food production and climate to be an important collaborative engagement activities and we several collaborative engagements with a focus on engagement area and joined the Food Emissions 50 are reviewing our strategic approach for 2022. engagement is not enough climate issues as well as governance and joined industry effort co-ordinated by Ceres. This investor-led initiative 03.5 I nfluencing companies through initiatives to promote the robust functioning of markets. In particular, we have started an analysis of proxy voting is aimed at accelerating progress towards a net-zero statutory rules and guidelines from regulatory 03.6 Conflicts of interest 1. C limate Action 100+ future in the food and agriculture sector by engaging authorities that will shape how we approach 03.7 Industry engagement We are a member of Climate Action 100+. In line 50 of the highest-emitting public food companies in collective engagements moving forwards. In and commitments with our thematic focus on climate, we supported North America. It seeks to improve GHG emissions our home market of Germany, we observe that a collaborative engagement letter that asked a US disclosures, set ambitious emissions reduction targets collaborative engagement is still in an emerging 04 company to add a discussion item to its AGM agenda and implement credible climate transition action state on the back of a regulatory environment AllianzGI as a sustainable business about its climate change commitments, as well as plans in line with the Paris Agreement. As part of our that is not clearly defined when it comes to the adopting a routine advisory vote on its climate strategy. involvement, we joined the working group on land use “acting in concert” implications outlined below. 05 and climate and will be looking to collaborate actively We will continue our work within the DVFA Appendix Given our limited direct exposure, adding our support in 2022 by setting up engagement calls. Governance and Stewardship Commission on to a collective engagement was likely to have a collaborative engagement in Germany. In 2021, greater impact. With the addition of discussion items 3. U K Investor Forum this included a position paper on collaborative to the agenda – as well as a formal response from the We value engagements facilitated by the UK engagement and dialogue with other company – it was clear that climate had become a Investor Forum on issues related to business strategy, market participants. board-level issue and continued engagement would environmental concerns, management of social risks be beneficial (eg, through our Climate Engagement and board oversight, among other topics. In 2021, with Outcome initiative – see page 32). we worked on the two projects: “Engagement with Bid Situations” focusing on takeover situations; and An important outcome of our activity in 2021 was to “Voting Turnout at Irish Companies” (see case study on further define internal frameworks for engaging when page 51). Regarding takeover situations, we facilitated a portfolio company becomes involved in a takeover several meetings with other investors and market bid. The concerns of our Legal and Compliance teams participants to inform our decision-making. This was centred around regulatory restrictions known as important given the level of activity in the UK market “acting in concert”, as well as the sharing of material where access to capital and potentially undervalued non-public information. Through the UK Investor Forum, assets has resulted in a material number of takeover we engaged regulators to better understand their views bids. Both initiatives are ongoing and feed into our around stewardship activity. Going forward, we will work on improving well-functioning markets. enhance our internal guidelines to be more effective in ensuring the best outcomes for clients. 1 https://www.ceres.org/climate/ambition2030/food-emissions-50