We also see it as our role to influence public policy setting. As public policy can be a driver for financial and sustainable reform of companies, it has become increasingly important for long-term investors. In 2015, we were involved in several initiatives in the public domain:
- Corporate taxes: In many cases, tax efficiency is legal and can increase the company’s financial performance, particularly in the short term. However, taking the longer term consequences into consideration, aggressive tax planning entails significant risks. These risks include financial, regulatory and reputation risks. Triodos Bank supports a fair and effective tax system, taking into account the interests of all stakeholders. We stand on the principle that taxes should be paid in the countries where the earnings are realised. In the past, the fund engaged with all its investee companies on tax transparency and tax policy. The replies from companies made it clear that responsible and transparent tax behaviour is not yet well developed. In that light, the fund advocates country-by-country reporting to the public by all listed companies. Such disclosure would increase overall transparency and allow for a more detailed analysis by investors. On June 30, 2015, Triodos Research spoke at a public seminar organised by Members of the European Parliament to discuss the importance of country-by-country reporting for investors. Following the public seminar, on July 8th the European Parliament voted in favour of country-by-country reporting by listed companies on profits made, tax paid on profits and public subsidies received. Members of the European Parliament are now having informal talks with member states to seek agreement on the final version of the legislation.
- Conflict minerals: In 2015, the fund continued its engagement efforts on conflict minerals. These minerals include tantalum, tin, tungsten and gold originating from the Democratic Republic of Congo and its adjoining countries. Following an investor statement addressed to the European Commission, European Council and European Parliament in 2014, calling for a more stringent EU policy on conflict minerals, Triodos Research was invited to speak at a public hearing in the first half of 2015 organised by the Dutch Parliament (Tweede Kamer) and also took part in the Forum on responsible mineral supply chains organised by the OECD International Conference on the Great Lakes Region. On May 13, 2015, just ahead of the vote on the issue in the European Parliament, we published another investor statement, again in conjunction with a group of US and European investors, calling on the European Parliament to strengthen its position. Triodos Bank was pleased to see that the European Parliament did indeed vote in favour of extending mandatory supply chain due diligence to companies that use conflict minerals in their products, as requested in the statement. The European regulation, however, will only be completed after a final round of negotiations (‘trialogue’) between the European Commission, the European Council and the European Parliament.
- G20 Energy Efficiency Finance Task Group: The objective of the Task Group was to push the topic of Energy Efficiency Finance ahead of the G20 Leaders Summit that took place in November 2015.
- Paris Pledge for Action: Triodos Investment Management was one of the signatories to the Paris Pledge for Action. By signing this statement we pledge our support to ensuring that the level of ambition set by the universal climate agreement of COP 21 in Paris is met or exceeded.
- Human Trafficking Risks: Triodos Investment Management co-signed a letter to Members of the US House of Representatives and the Senate calling upon them to co-sponsor and pass the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015. This bill is a relevant step towards eliminating human rights abuses throughout supply chains.
Triodos Research produces this engagement report yearly. You can find more up-to-date information about our engagement activities at http://www.triodos.com/en/investment-management/socially-responsibleinvestment/active-engagement. If you have feedback on this report or other engagement activities, please contact Triodos Research.
About Triodos Research & Triodos Investment Management
Triodos Research provides the research for the Triodos sustainable investment funds (Triodos SICAV I) and for Triodos Bank Private Banking, engaging with (stocklisted) companies during selection and during the period of share and bond ownership. Triodos Research is part of Triodos Bank.
Triodos Investment Management connects a broad range of investors who want to make their money work for lasting, positive change with innovative entrepreneurs and sustainable businesses doing just that. In doing so, we serve as a catalyst in sectors that are key in the transition to a world that is fairer, more sustainable and humane.
With our highly professional investment teams, we have built up in-depth knowledge throughout our 25 years of impact investing in sectors such as Energy & Climate, Inclusive Finance, Sustainable Food & Agriculture, Arts & Culture, and Sustainable Real Estate. Triodos Investment Management also invests in listed companies with an above average environmental, social and governance (ESG) performance. Assets under management as per 30 June 2015: EUR 2.9 billion.
Triodos Investment Management is a globally active impact investor and consists of Triodos Investment Management BV and Triodos Investment & Advisory Services BV, both wholly-owned subsidiaries of Triodos Bank NV.
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