The 2020 Annual Review from EOS at Federated Hermes provides insights on the engagement activities it conducted last year on behalf of UTAM and other institutional investors.

Active ownership, including engagement with companies, is a key part of UTAM’s comprehensive approach to responsible investing. We undertake select direct engagements with companies, but given our size and our practice of investing through external managers, we more often collaborate with like-minded investors through informal and formal groups, such as Climate Action 100+, CDP, Canadian Coalition for Good Governance, 30% Club Canada and the University Network for Investor Engagement (UNIE).

In August 2019, to further extend our reach and influence, we partnered with EOS at Federated Hermes (“EOS”), a leading stewardship service provider whose engagement activities enable long-term institutional investors such as UTAM to be more active owners of the assets that they own or manage, through dialogue with public companies on environmental, social and governance (ESG) issues. As UTAM’s President and CIO, Daren Smith, explains in his introductory message to the report, “EOS takes a collaborative approach, seeking client input in setting priorities and providing opportunities to participate in select engagements and learn from their experienced engagement professionals.”

EOS’s 2020 Annual Review shares highlights of its engagement activities on behalf of UTAM. Here is a preview:

    • In 2020, through EOS, UTAM engaged with 815 companies in the Pension and Endowment portfolios on 2,914 environmental, social, governance, strategy, risk and communication issues and objectives. Of these, 1,346 were linked to one or more of the UN Sustainable Development Goals.A chart illustrating the number of engagement objectives and issues on which we have engaged in the last year.
  • Number of companies by region:
    • North America: 322
    • Europe: 191
    • Developed Asia: 96
    • Emerging & Developing Markets: 90
    • United Kingdom: 83
    • Australia & New Zealand: 33
  • Environmental topics featured in 24.4% of our engagements over the last year. Climate Change 78.5% Forestry and Land Use 4.1% Pollution and Waste Management 10.8% Supply Chain Management 3.7% Water 3.0%Topics featured in the engagements:
    • Governance: 40.2%
    • Environmental: 24.4%
    • Social & Ethical: 18.0%
    • Strategy, Risk & Communication: 17.4%
  • EOS’s proprietary milestone system tracks progress in its engagements relative to the objectives set at the beginning of interactions with each company. In 2020, EOS made progress in delivering engagement objectives across regions and themes, moving forward at least one milestone for about 51% of objectives.

EOS’s 2021 engagement plan

EOS’s engagement plan covers 12 key themes and 36 related sub-themes that reflect the diversity of issues affecting companies around the globe. Climate change has emerged as the top priority for EOS’s clients, and it remains the key focus in 2021, says Dr. Hans-Christoph Hirt, Executive Director and Head of EOS, in the report’s foreword: “Given the systemic importance of climate change, engagement with companies on physical and transition risks with the objective of Paris Agreement–alignment will remain a top priority in our stewardship activities. Encouragingly, we saw in 2020 how the collapse in demand for fossil fuels reinvigorated investor demands to accelerate the transition to a low carbon economy.”

The report also explains EOS’s engagement approach, methodology and overall progress, as well as how it has continued its work during the global pandemic. UTAM is pleased with EOS’s achievements in 2020, especially its work on climate change, and we look forward to further progress in 2021.

Download EOS’s 2020 Annual Review.