The Report*, which details the Aegon AM’s stewardship activities throughout 2020, builds on the firm’s long-established culture of responsible investing stretching back over 30 years. It covers Aegon AM’s Stewardship considerations when engaging with companies, and activity in encouraging them to maximise investment returns through good governance practices, including respect for society and the environment.
The Report covers engagements typically initiated following one of three potential triggers; long-term financial risks arising from ESG issues as part of Aegon AM’s research process or separate monitoring; where companies do not comply to clients’ standards as outlined in specific mandates/where Aegon AM particular concerns arising out of voting activity; or finally, in relation to specific responsible investing strategies that actively seek to encourage certain corporate ESG behaviours.
Explaining the process of engagement Miranda Beacham, Head of ESG – Equities & Multi Asset Group at Aegon AM says, “The material ESG factors impacting companies such as diversity, climate change and supply chain standards are not overly dependent on whether we hold bonds or equity. We are encouraging best practice in these matters because they will result in a sustainable company that will have better shareholder returns and will be able to service the debt they have to bondholders.”
Looking specifically on diversity issues, Beacham notes, “we have seen some real progress in terms of gender diversity as an outcome of engagements over the last few years, but recently there is a real appetite to increase in gathering information and disclosure around other aspects of diversity. Some companies are really focussing on neural diversity and mental health. These conversations are not over, there is still much work to do and we will continue to encourage progress.”
Pointing to the ‘innovative programmes’ being implemented by some of the companies Aegon AM engaged with in 2020, Beacham highlights software company AVEVA which “Has a programme to retain women in India after they leave to start families”.
IT infrastructure provider Softcat is another example, with the company having “A good story on diverse social backgrounds and are making real progress in other areas,” says Beacham.
Across the Atlantic, Beacham says US companies have traditionally been far more reticent to discuss diversity, “However, the events of May 2020 led to a complete change. We have had far more fruitful conversations in 2020, showing a willingness to increase disclosure and talk about where they have challenge. The conversations are at a far earlier stage than we would have in the UK, but we look forward to continuing these conversations in the future.”
Aegon AM’s Stewardship Report can be viewed in full here
*This report represents Aegon AM’s compliance submission for The UK Stewardship Code 2020. Our application is
being reviewed by the Financial Reporting Council, who will publish a list of signatories in the summer of 2021.
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