Our Responsible Investment overlays
21
Incident and norms-based engagement (including PAI)
Our incident and norms-based engagements address companies suspected of breaches of international norms or conventions or those involved in ESG-related incidents. Outliers in terms of PAI metrics may also be engaged with.
Engagements with companies identified as involved in a veri- fied violation of international norms or those involved in ESG- related incidents are initiated based upon decision from the RIC. The objective of engaging a company in breach of international norms or conventions or those involved in ESG-related incidents is to ensure that the company is taking sufficient measures to address the issues and to strengthen relevant policies and prac- tices, to reduce the risk of future norms-breaches or incidents. For each incident- or norms-based engagement an engage- ment plan with clearly defined targets is created. The engage- ment targets are measurable and are used to monitor and eval- uate progress. The RI team presents the RIC with an overview of the companies in breach with international norms or conven- tions on a quarterly basis, and provides a recommendation of
the preferred action at the end of the pre-defined engagement period. Actions include closing the engagement due to suffi- cient evidence that the company has addressed the norms- breach or incident, or escalating through voting, collaborative engagement or divestment, if the company has failed to display adequate measures to address the issue and to strengthen rel- evant policies and practices. Incident- and norms-based engagements are inherently back- ward-looking, in that it is triggered only after the event. During 2021, these engagements were supplemented by engagement on issues identified using our firm-level PAI process. Here, com- panies that are outliers on specific PAI issues are identified and engaged in a forward-looking way, with the aim to pre-empt the issues identified from later reaching the level of an incident or norms breach.
Made with FlippingBook flipbook maker