Since 2019, UTAM has partnered with EOS at Federated Hermes, a specialized provider of global corporate engagement services, to undertake engagement activities representing the combined influence of its clients. The 2021 Annual Review provided by EOS highlights the past year’s activities conducted on behalf of UTAM and EOS’s other institutional clients.

Responsible investing, for UTAM, includes engaging with companies on environmental, social and governance (ESG) issues. This engagement can happen directly or, more typically, through collaborations with other like-minded institutional investors. UTAM’s engagement activities seek to hold both the board and management of investee companies accountable on ESG matters affecting the risk management, ongoing operations and long-term performance of their organizations.

As UTAM President and CIO Chuck O’Reilly notes in the review’s introductory message, partnering with EOS complements these efforts and “allows us to leverage the influence of a larger asset base, and to represent our ESG concerns to issuers globally.”

In the 2021 Annual Review, EOS reports on its engagement activities on behalf of UTAM. Here are some key points from the review:

  • Through EOS, UTAM engaged with 791 companies in 2021, on 3,136 environmental, social, governance, strategy, risk and communication issues and objectives. Of these engagements, 1,804 were linked to one or more of the UN Sustainable Development Goals .
  • EOS’s scope is global – in 2021 the 791 companies it engaged with covered the following regions:
    • North America: 331
    • Europe: 175
    • Developed Asia: 99
    • Emerging and developing markets: 92
    • United Kingdom: 59
    • Australia and New Zealand: 35
  • EOS illustrates the targets of its 2021 engagements in the following charts:

Environmental topics featured in 27.5% of our engagements over the last year. ? Climate Change 80.6% ? Forestry and Land Use 4.5% ? Pollution and Waste Management 10.7% ? Supply Chain Management 1.6% ? Water 2.5%  Social and Ethical topics featured in 20.3% of our engagements over the last year. ? Bribery and Corruption 1.4% ? Conduct and Culture 12.7% ? Diversity 25.3% ? Human Capital Management 21.7% ? Human Rights 31.6% ? Labour Rights 6.3% ? Tax 1.1%

Governance topics featured in 37.6% of our engagements over the last year. ? Board Diversity, Skills and Experience 23.3% ? Board Independence 13.8% ? Executive Remuneration 44.7% ? Shareholder Protection and Rights 14.8% ? Succession Planning 3.3%  Strategy, Risk and Communication topics featured in 14.6% of our engagements over the last year. ? Audit and Accounting 7.2% ? Business Strategy 40.0% ? Cyber Security 3.1% ? Integrated Reporting and Other Disclosure 23.8% ? Risk Management 26.0%

  • EOS measures progress in its engagements by tracking advancement through a series of milestones. EOS reports “solid progress in delivering engagement objectives across regions and themes” in 2021 – at least one milestone was moved forward for about 51% of engagement objectives. Positive progress was most notable in environmental objectives.

Engagement plans for 2022 and beyond

EOS identifies priority themes for future engagements using a formal consultation process with clients, including UTAM, to ensure its engagement plan is up to date and reflects our collective long-term priorities. For 2022, EOS has four priority themes:

  • Climate change action: Many of the world’s largest emitters have made net-zero commitments but don’t have short- and medium-term emissions targets or targets aligned with the Paris Agreement goals. EOS will emphasize matching long-term commitments with a Paris-aligned strategy and targets.
  • Human and labour rights: COVID-19 has exacerbated social inequalities, increasing the risk of modern slavery and limiting access to food and medicines. EOS will also focus on indigenous and community rights, and high-risk regions such as disputed territories or conflict areas.
  • Human capital: EOS will press companies to provide fair wages and benefits, and will emphasize the importance of diversity, equity, inclusion and representation.
  • Board effectiveness and ethical culture: EOS will press boards to make improvements to ethnic diversity in line with recent progress on gender diversity. Boards should aim to achieve representation that is reflective of the diversity of the stakeholders they serve.

UTAM will continue to actively participate in the development of EOS’s priority themes and closely monitor its progress and achievements as it implements its engagement plans. We value our partnership with EOS and it continues to be a key component of our responsible investing stewardship strategy.

Download EOS’s 2021 Annual Review, including UTAM engagement highlights.