Using our influence as a shareholder

Engaging with companies we invest in

We choose companies to engage based broadly on two methods – top-down and bottom-up.

Most of our engagements are undertaken because we have an investment belief, principle or policy that draws our attention to kinds of businesses, such as companies with high greenhouse gas emissions, potential human rights risks, low safety standards, or whose policies do not reflect a risk we believe to be important. This is an example of ‘top-down’ prioritisation. The issues we prioritise are also informed by the advice provided by the Ethical Investment Advisory Group.

Bottom-up prioritisation involves scanning the portfolio for particular indicators of poor performance, concerning governance or human rights issues that may threaten a company’s social license.

Generally, we focus on individual companies, but our systemic stewardship approach (link to this page) also shows how we can engage across sectors and issues that affect multiple sectors.

How we escalate where companies do not meet expectations

We expect all of the companies we own to be responsive to our engagement. If a company does not respond, or we judge their response to be insufficient, we may escalate by casting our votes against management’s recommendation at the company AGM or by supporting a shareholder resolution. This would usually be accompanied by direct engagement outlining our reasons with the company. We may also pre-declare our voting intention, publicly alerting the company (as well as informing other stakeholders) that we are unsatisfied. We maintain a list of recent votes we have pre-declared on, here.

Ultimately, and as a last resort, we may disinvest. Disinvesting does not directly lead to a change in the company’s policies or practices (because on the other side of the sale is another investor who presumably does not share our concerns and buys our shares). Nonetheless, disinvesting can send a clear message and means we no longer have investments in companies that are not addressing issues that are important to us.

Reporting on Stewardship

We are a signatory to the UK Stewardship Code and report in detail on our stewardship efforts in our annual Stewardship Reports.

Screening

We screen companies to avoid providing capital to, or deriving benefit from, some forms of business that we assess to be inconsistent with our members’ views.

Typically, this covers activities or products that cause harm in society and that are deemed by our trustees, informed by advice from EIAG, not to be compatible with our Christian ethos. As a result, we screen and prevent our asset managers from investing our funds in some companies and have internal processes to manage and update this list. One of the most effective ways to capture the activities of a company that you want to exclude is to use a metric that is based upon the revenue they generate from that activity.

We use credible data and run an annual process to check our screening with new data, to ensure our investible universe best reflects our agreed investment beliefs, responsible investment values, and ethics.

We provide annual updates on our screening approach in our Stewardship Report.

We also provide updates on this website periodically on topical issues.