The aim of our stewardship activity is to protect our clients’ interests, the value of their investments, and improve associated sustainability outcomes.
EQ Investors (EQ) takes an active role in influencing fund managers and companies to adopt responsible practices, and this year, our strategy focuses on six key engagement themes:
- Climate change
- Biodiversity risk
- Human rights & modern slavery
- Ethical AI
- Access to Medicine; and
- Healthy Nutrition.
Some of these topics are ongoing engagements, with achievements to build on this year.
We publish annual sustainability reports that highlight our commitments, progress, and impact. To provide an example, below is a summary of activity undertaken as part of our focus on biodiversity risk.
Biodiversity risk
We recognise that the rapid decline of ecosystems poses both environmental and financial threats. While the largest direct drivers of biodiversity loss are excluded from portfolios, we acknowledge the need to address indirect investment links to nature destruction. Companies reliant on unsustainable resource extraction face growing regulatory and reputational risks, making biodiversity a critical area for engagement.
In the past year, we have pursued a three-pronged approach:
- Engaging fund managers with exposure to higher-risk industries.
- Collaborating with investor groups to influence companies directly; and
- Using AGM activism to elevate biodiversity issues at the board level.
Through our approach, we identified priority sectors and set seven best practices for fund managers. Over 50% of the 11 fund managers engaged implemented at least one new best practice, and on the back of EQ’s engagement their participation in biodiversity-focused collaborative engagements rose from 36% to 82% as a direct result of our intervention.
As part of the UN PRI Spring initiative, we engaged collaboratively with Banco Bradesco on deforestation-linked lending and Reckitt Benckiser on sustainable sourcing. EQ’s AGM engagements resulted in restated certified sourcing strategies by the chemicals company Croda, while DS Smith pledged stronger biodiversity regeneration goals post the upcoming merger.
Looking ahead to this year, upcoming regulations (from the EU) will further reinforce biodiversity as a key financial and sustainability concern, and our team looks to keep up the engagement momentum in that context.
Find out more
If you would like more information about EQ’s stewardship & engagement approach, please get in touch.
Please remember, this content is provided for information purposes only. Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
