EOS 2024 Annual Review and UTAM’s Engagement Highlights

EOS at Federated Hermes, a specialized stewardship service provider engaged by UTAM since 2019, has released its 2024 Annual Review. The review represents EOS’s focus and progress in engagement with companies over the past year on behalf of UTAM and its other institutional clients.

In the review’s introductory message, UTAM President and CIO Chuck O’Reilly elaborates on how UTAM approaches both engagement and investment similarly, with a long-term perspective. “Engagement that advances U of T’s commitments — to sustainability and responsible investing — is best approached as a long-term endeavour,” he writes. “We believe that effective engagement is best defined by steady, incremental improvements across many companies and industries.”

EOS reports that in 2024, it engaged with 705 companies on 3,284 environmental, social, governance, strategy, risk and communication issues and objectives. The engagement themes cover areas that align with many of UTAM’s responsible investing priorities:

EOS measures progress in engagement activities by setting a series of milestones for each engagement. At least one milestone was moved forward for about 45% of its objectives during the year, representing solid progress across regions and themes. As Chuck writes, “Each year, we see tangible milestones reached—small steps that, over time, build toward lasting impact.”

Engagement priorities

Through a vigorous consultation process with clients — including UTAM — EOS identifies key engagement themes to guide its work. This approach ensures that its engagement strategy reflects emerging issues, such as artificial intelligence in the workforce, and long-term collective priorities. In 2024, its engagement priority areas were:

• Board effectiveness: In 2024, EOS focused on improving ethnic diversity to enhance board performance across function, composition and structure and to match recent progress towards gender diversity. Board composition should be aligned to the strategic needs of each company while reflecting the diversity of stakeholders it aspires to serve.
• Climate change: EOS continued to press companies to create and implement greenhouse gas reduction strategies and targets aligned to the Paris Agreement. EOS evaluated the credibility of transition plans, including their reliance on technology, and sought governance oversight of related risks. Specific engagement focuses included mitigating high methane-emitting sectors, addressing physical climate risk, and supporting a just transition to net zero.
• Human and labour rights: EOS engaged companies to acknowledge human rights impacts present within operations and supply chains and to demonstrate appropriate board- and executive-level governance. Indigenous and community rights, human rights in conflict zones, data privacy, and freedom of expression were areas of focus.
• Human capital: EOS, in recognition of workforce pressures from artificial intelligence implementation and cost of living increases, intensified engagements on advancing workers and improving their skills, as well as closing pay gaps across ethnicities. Health and safety risks were extended to mitigate climate-related risks, such as heat stress.

“Engagement is a powerful component of responsible investing, one we remain committed to for the long term,” Chuck says. We continue to work closely with EOS — contributing to the development of its priority themes and monitoring its progress; our collaboration is a cornerstone of our responsible investing efforts and our stewardship strategy.

Download EOS’s 2024 Annual Review, including UTAM engagement highlights.