Escalating matters through the proxy voting group
For institutional asset managers who own thousands of publicly traded companies in their client portfolios, proxy season can represent an enormous decision-making challenge under a compressed timeframe. From time to time, issues lead to engagement escalations with issuing companies.
Our proxy voting working group was established to facilitate the review of proxies across portfolios. The group reviewed proxy voting matters at over 90 issuers through the 2021 proxy voting season, meeting at least weekly through the highest voting volumes in April and May. The group also deliberated on matters through email to remain responsive to issues as they arose. In several instances, these reviews by the working group led to engagement escalations.
In one of many examples of how the proxy voting group has strengthened our engagement activity, the group reviewed issues with dual classes of shares. Such structures can lead to a misalignment between economic ownership and voting rights. These reviews led to conversations with some of those issuers to encourage a phaseout of their dual-class share structure.
The case studies shown here are for illustrative purposes only, do not represent all of the investments made, sold, or recommended for client accounts, and should not be considered an indication of the ESG integration, performance, or characteristics of any current or future Manulife Investment Management product or investment strategy.
Manulife Investment Management conducts hundreds of ESG engagements each year but does not engage on all issues or with all issuers in our portfolios. We also frequently conduct collaborative engagements in which we do not set the terms of engagement but lend our support in order to achieve a desired outcome. Where we own and operate physical assets, we seek to weave sustainability into our operational strategies and execution. The case studies shown are a sampling across issues and geographies. Our approach to ESG investing and incorporation of ESG principles into the investment process differs by investment strategy and investment team. It should not be assumed that an investment in the company discussed herein was or will be profitable. Actual investments will vary and there is no guarantee that a particular fund or client account will hold the investments or reflect the characteristics identified herein. Please see our ESG policies for details.
We consider that the integration of sustainability risks in the decision-making process is an important element in determining long-term performance outcomes and is an effective risk mitigation technique. Our approach to sustainability provides a flexible framework that supports implementation across different asset classes and investment teams. While we believe that sustainable investing will lead to better long-term investment outcomes, there is no guarantee that sustainable investing will ensure better returns in the longer term. In particular, by limiting the range of investable assets through the exclusionary framework, positive screening and thematic investment, we may forego the opportunity to invest in an investment which we otherwise believe likely to outperform over time.
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