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Principles for asset owners and asset managers - Coggle Diagram
Principles for asset owners and asset managers
Purpose and governance
Principle 1: Signatories purpose, investment beliefs, strategy and culture enable stewardship that creates long term value for clients, beneficiaries leading to sustainable benefits for the economy, the environment and society
Signatories should explain, the purpose of the organisation and an outline of its cultures, values, business model and strategy and their investment beleifes
Signatories should explain what actions they have take to ensure their investment beliefs, strategy and culture enable effective stewardship
Signatories should disclose how their purpose and investment beliefs have guided their stewardship, investment strategy and decision making, and an assessment of how effective they have been in serving the best interests of clients and beneficiaries
Principle 2: Signatories governance, resources and incentives support stewardship
Signatories should explain how their governance structures and processes have enabled oversight and accountability for effective stewardship of their organisation and the rationale for their chosen approach, how they have appropriately resourced stewardship activities and their performance management or reward programmes have incentivised the workforce to integragrate stewardship and investment decision making
Signatories should disclose how heir chosen governance structures and processes have been in supporting stewardship and how they may be improved
Principle 3: Signatories manage conflicts of interest to put the best interests of clients and beneficiaries first
Signatories should disclose their conflicts policy and how this has been applied to stewardship
Signatories should explain how they have identified and managed any instances of actual or potential conflicts related to stewardship
Signatories should disclose examples of how they have address actual or potential conflcits
Principle 4: Signatories identify and respond to market wide and systemic risks to promote a well functioning financial system
Signatories should explain how they have identified and responded to market wide and systemic risks as appropriate, how they have worked with other stakeholders to promote continued improvement of the functioning of financial markets, the role they played in any relevant industry initiatives in which they have particpated, the extent of their contribution and an assessment of their effectiveness with examples, and how they have aligned their investments accordingly
Signatories should disclose an assessment of their effectiveness in identifying and responding to market wide and systemic risks and promoting well functioning financial markets
Principle 5: Signatories should review their policies, assure their processes and assess the effectiveness of their activities
Signatories should explain how they have reviewed their policies to ensure they enable effective stewardship, what internal or external assurance they have received in relation to stewardship and how they have ensured their stewardship reporting is fair, balanced and understandable
Investment approach
Principle 6: Signatories take account of client and beneficiary needs and communicate the activities and outcomes of their stewardship and investment to them
Signatories should disclose the approximate breakdown of the schema structure, the size and profile of their memebrship or their client base, assets under management and the length of investment time horizon they have considered appropriate to deliver the needs of clients and beneficiaries and why
Signatories should explain how they have sought clients views and the reason for their chosen approach or how they have sought and received clients views, how the beneficiaries have been reflected in stewardship and investment aligned with an appropriate time horizon, how assets have been managed in alignment with clients stewardship and investment policies, what they have communicated to clients about their stewardship and investment activities and outcomes to meet the needs, including type of information provided and methods/frequency of communication to enable them to fulfil their stewardship reporting requirements
Signatories should explain how they have evaluated the effectiveness of their chosen methods and how they have taken account of the views of beneficiaries, and where managers have not followed their stewardship, the reason for this
Principle 7: Signatories systematically integrate stewardship and investment, including material environment, social and governnance issues and climate change to fulfil their resposnbilities :
Signatories should disclose the issues they have prirotisied for assessing investments
Signatories should explain how integration of stewardship and investment has differed for funds, asset classes and geographies and the processes they have used to integrate stewardship and investment and ensure service providers have received clear and actionable criteria
Signatories should explain how information gathered through stewardship has informed acquisition, monitoring and exit decisions either directly or not heir behalf
Principle 8: Signatories monitor and hold to account managers and/or service providers
Signatories should explain how they have monitored service providers to ensure services have been delivered to meet needs
Signatories should explain how the services have been delivered to meet their needs and the action taken where needs have not been met
Engagement
Principle 9: Signatories engage with issuers to maintain or enhance the value of assets
Signatories should explain the expectations they have set for others, or how they have selected and prirotisied engagement, how they have developed objectives for enagegemnt, what mehtods of engagement, the reasons for their chosen approach and how engagement has differed for funds, assets or geogrpahies
Signatories should describe the outcome of engagement that is ongoing or had concluded
Principle 10: Signatories where necessary, participate in collaborative enagegemnt to influence issuers
Signatories should disclose what collaborative engagement they have participated in and why
Signatories should describe the outcome of collobarative engagement
Principle 11: Signatories where necessary, escalate stewardship activities to influence issuers
Signatories should explain the expectations they have set for asset managers that escalate stewardship activities on their behalf or how they have selected and priotisied issue, when the have chosen to escalate their engagement, the issues and reasons, how escalation has differed for funds assets or georgraphies
Exercising rights and responsibilities
Principle 12: Signatories actively exercise their rights and responsibilities
Signatories should state the expectations they have set for asset managers that exercise rights and responsibilities on their behalf
Signatories should disclose the proportion of shares voted in the past year and why, provide a link to their voting records, explain their rationale for votes, explain the extent to which voting decisions were executed by another entity