Engagement
One of the pillars of a best-in-class active ownership approach is engagement with the management and boards of companies on ESG considerations. We believe that engagement influences corporate management teams to more effectively manage ESG risks and opportunities, which is essential for long-term outperformance.
Given our size and our practice of investing through third-party investment managers, we more often participate in collaborative engagement groups and initiatives. We believe that the collective influence of like-minded investors with substantial combined holdings will typically lead to better outcomes than we could achieve on our own.
We augment these efforts with the services of specialized engagement service providers. By adding these services to our multi-pronged engagement approach, we leverage the influence of a larger asset base and extend the reach of engagement to represent our ESG concerns to issuers globally.
The following charts summarize our recent engagement activities through our engagement service provider and collaborative initiatives including the Canadian Coalition for Good Governance, CDP, Climate Action 100+, Climate Engagement Canada and 30% Club.
Companies engaged by country/region 2023
Companies engaged by issue 2023
1,136
Companies engaged
56
Countries covered
UTAM works with EOS at Federated Hermes, a leading stewardship service provider whose engagement activities enable long-term institutional investors such as UTAM to be more active owners of the assets they own or manage, through dialogue with public companies on ESG issues. 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.
In 2023, through EOS, UTAM engaged with 764 companies in our long-term portfolios on 3,393 environmental, social, governance, strategy, risk and communication issues and objectives. Of these, 2,311 were linked to one or more of the UN Sustainable Development Goals (SDGs). The SDGs were adopted in 2015 as a global call to end poverty, protect the planet and ensure that everyone enjoys peace and prosperity by 2030.
EOS priority themes for 2023:
Climate change action: The combination of accelerating climate change, challenges for energy security, and rising costs and inequality in access to energy creates a potential risk to climate action in the short term. In the medium term, however, these factors may help accelerate the transition from fossil fuels. EOS engagements focus on companies creating and implementing emissions reduction strategies and targets aligned to the Paris Agreement, seeking to limit climate change to 1.5°C.
Human and labour rights: EOS engages on human and labour rights, expecting companies to acknowledge human rights impacts present within operations and supply chains and to demonstrate appropriate board- and executive-level governance. EOS also focuses on the protection of Indigenous and community rights, the protection of digital rights in the virtual world, and promotion of the UN Guiding Principles (UNGPs) on Business and Human Rights within corporations.
Human capital: As well as advocating for fair wages and benefits, EOS also expects companies to develop a DEI strategy and action plan to close the ethnic pay gap and achieve proportionate ethnic and gender representation. In 2023 EOS challenged companies to expand diversity metrics to include representation and equity for the 2SLGBTQ+ community and people with disabilities.
Board effectiveness: EOS presses boards for more internationally diverse board appointments, enabled by more effective remote working practices. Board composition should be aligned to the strategic needs of each company while reflecting the diversity of stakeholders it aspires to serve.