CAITLIN MCSHERRY Director of Investment Stewardship ESG Investing
Our Approach to Engagement
The first of those developments has meant more of our conversations focus on peer comparisons of external markers, questions such as “why does the company not provide disclosure on issues its peers do?”, or “why is progress on material risks not as ambitious as those of other companies?” On the second point, we are working hard to provide our clients and stakeholders with more information about how we engage, on what topics and what our outcomes are. This commitment to more transparency led to the publication of our first-ever Stewardship Report, which we intend to update on an annual basis. We believe that engaging with issuers is an essential part of being a long-term active owner, and that engaging with issuers on ESG topics can improve their performance and reduce their risk profile. With our long-term relationships with companies, Neuberger Berman’s investment teams are well positioned to engage with companies on these key issues. In 2021, we conducted 3,162 equity engagements and 1,463 fixed income engagements. Engagement is core to our investment process—whether to inform our investment decision or as part of our stewardship of the asset. We look for companies where we can constructively exchange insights with Board members and management teams. Much of our engagement with issuers arises organically from the investment diligence process, but we are also increasingly focused on ensuring that the same attention and intensity are sustained throughout our stewardship of the asset. We also recognize that while the core propositions of dialogue with companies—diligence, accountability and the exchange of views—remain important, the practice has also seen the development of new, important dimensions, namely more information about companies from external sources, and the appetite for transparency and reporting around engagement practices and outcomes.
2021 ESG ANNUAL REPORT
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