Eurizon s responsibile World ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY Engagement Policy ENGAGEMENT REPORT
At Eurizon, shared values play a vital role. As an organisation and as individuals we are linked together by a goal, which is both ambitious and important: fuelling confidence and building the future. We are proud to be part of a company whose mission is protecting and growing the assets of our clients Our MISSION We VALUE the savings of our customers by creating and managing investment solutions that fit their needs. We TRANSFORM the complexity of the financial markets into opportunities. We COLLABORATE with companies that we invest in to promote respect for sustainable growth and high standards of governance. Trustworthiness, innovation and high-quality service are our defining features. Our Corporate VALUES BELONGING: we work with pride and participation. INTEGRITY: we feel responsible for the trust of those who rely on us. EXCELLENCE: we target quality of results and on-going improvement. PASSION: we work with professionalism and involvement, combining head and heart. Our VISION We are committed to a culture that promotes the value of people, their aspirations, and savings at large: A FINANCIAL HUMANISM based on respect, accountability and awareness of one s own qualities. 15% market share in Italy 303 billion euros of assets as of 31/12/2018 ENGAGEMENT POLICY operating in 25 countries Data by Assogestioni and processing by Eurizon as of 31/12/2018 1
EURIZON CAPITAL SGR - ENGAGEMENT POLICY Eurizon Capital SGR (hereafter also referred to as Eurizon ) promotes a proactive interaction with investee companies, in the belief that issuers that implement high corporate governance standards can generate improved long-term performance for investors. As a signatory to the Principles for Responsible Investment (UN PRI), Eurizon pays close attention to the policies implemented by the issuer companies in which it invests, in the belief that sound corporate governance policies and practices (incorporating environmental, social and governance aspects) create value for shareholders in the long term. The Company adopted a Strategy for the exercise of participation and voting rights attached to the financial instruments held in the managed UCIs for an effective integration of corporate governance in the investment process. IMPLEMENTATION the Company is geared towards a constructive dialogue and collaboration with significant issuers, adopting a targeted approach to corporate governance The SGR gives consideration to the importance of monitoring and engagement with its issuer companies. As a result of the adoption of the Italian Stewardship Principles, the Company is even more geared towards a constructive dialogue and collaboration with significant issuers, adopting a targeted approach to corporate governance. In order to identify significant issuers for the activation of the engagement process, the SGR considers, in particular, issuers characterised by: 1 2 3 Significant exposure on managed products (ownership of significant share capital); Significant bet against benchmarks (in case of Investment Case formalized by Investment Director); High exposure to ESG risks. In this regard, in accordance with the Adoption of Italian Stewardship principles for the exercise of administrative and voting rights in listed companies, Eurizon is committed to a detailed analysis of investee companies and to a constructive dialogue with board members and/or statutory auditors of significant issuers. Eurizon recognises the potential benefits deriving from collective engagement actions with other investors and will adopt this approach when it is believed to be the most effective means of improving communication with investee companies. ENGAGEMENT POLICY 2
In line with the PRI, Eurizon has adopted a selection methodology of financial instruments that takes into account environmental, social and governance factors, as an integral part of the investment selection and monitoring process: such methodology is applied to all active management funds, both benchmark-based and flexible. CONFLICTS OF INTEREST Any engagement activity is carried out in respect of external and internal policies regarding the management of conflicts of interest and privileged information. Furthermore, Eurizon has defined specific internal procedures that prevent the circulation of information among the different companies of the Group and the Parent company, Intesa Sanpaolo, as regards the exercise of voting rights attached to the managed shareholdings; more specifically, such procedures allow Eurizon to make decisions in the best interest of investors, independently of any internal and external influence. REPORTING Eurizon undertakes to make engagement activities transparent through its website, publishing periodic reporting on engagement with its issuer companies, as well as on the attendance at shareholder meetings. Such reports include both quantitative and qualitative information. ENGAGEMENT POLICY 3
ENGAGEMENT SUMMARY In the year 2018, Eurizon Capital SGR carried out about 600 engagements with issuers, of which nearly 22% exclusively about ESG aspects. Engagement Activities by Sector Health Care 5% Industrials 25% Information Technology 6% Materials 9% Real Estate 2% Telecommunication Services 8% Utilities 4% Consumer Discretionary 14% Consumer Staples 4% Energy 5% Financials 18% EURIZON ENGAGEMENT Year 2018 Consumer Staples 25 Energy 32 Financials 108 Telecommunication Services 45 Utilities 24 Health Care 31 Industrials 148 Information Technology 37 Materials 51 Consumer Discretionary 81 Real Estate 13 PERIODIC REPORT 4
Engagemnt Activities by Geografical Area Latin America 3% North America 7% Russia 1% United Kingdom 5% Asia 9% Australia & Pacific 1% Europe 74% 42 5 33 438 54 16 7 Asia Australia & Pacific Europe Latin America North America Russia United Kingdom This document, its individual parts and the information and data contained within, do not constitute a solicitation or a recommendation to trade financial instruments or subscribe to mutual investment funds. PERIODIC REPORT 5