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Stewardship

Active ownership is an integral part of our long-term responsible investment approach. It is central to our philosophy, beliefs and processes. Through voting and engagement, we aim to protect and ultimately enhance value in the companies and other issuers we invest in – increasing the climate resilience of our client's investments.

Understanding how these companies and issuers manage their environmental impact, operate and interact with stakeholders help us highlight key ESG risks and opportunities. As investors, we can then encourage positive behaviour, promote high standards, and ensure that the interests of all stakeholders are taken into consideration.

Our approach to stewardship

Our approach to stewardship is moderated by our team of ESG specialists and consists of the four key stages below:


Analysis and research
Perform issuer- and sector-specific
    fundamental ESG analysis
Identify possible areas of concern
Undertake stakeholder due diligence


Company engagement
Meet with companies to understand issues
Raise concerns and encourage action
Seek commitments from companies to
    address concerns
Follow up meetings with board members
Monitor issues and company progress


Voting
Communicate voting intentions
Vote against management where necessary
Support shareholder resolutions
Attend selected AGMs


Further escalation
Engage and collaborate with other investors
Communicate publicly
File shareholder resolutions


Why does engagement matter?

As a global asset manager, we engage with issuers from around the world to protect and enhance the long-term value of our client's investments.

Meeting and engaging with companies on issues such as the delivery of corporate strategy, financial and non-financial performance and risks, allocation of capital and management of ESG issues help us achieve the best practice.

Our engagement objectives

  • Improve our understanding of a company and its strategy
  • Monitor company performance
  • Support or raise concerns about company management, performance or direction
  • Promote good practices

Further information is available in our Engagement Policy.

 

Over

2,300 ESG issues raised

 


Source: HSBC Asset Management as at December 31, 2020


Why does voting matter?

Exercising voting rights at company meetings is an important part of stewardship. We believe that high standards of corporate governance deliver sustainable returns to shareholders. Being able to vote encourages adherence to international and local best practice standards of governance, social practice and environmental sustainability. We aim to vote on all equities for which clients have given us authority.

Our global voting guidelines

Our voting guidelines help us hold companies with poor corporate governance standards to account. These guidelines prioritise the following issues:

  • Independent and diverse representation on the board, and in board committees
  • Remuneration linked to challenging performance criteria with full disclosure
  • Dilution of existing shareholders
  • ‘Poison Pills’ and reductions in equal voting
  • Auditor independence
  • Transparency through shareholder proposals

Over
86,000
resolutions voted

Over
8,900
votes against
management

Over
1,600
shareholder resolutions
supported

Source: HSBC Asset Management as at December 31, 2020