Engagement

With engagement, we actively influence the management and business practices of the companies in which our customers invest their assets. This increases the sustainability in our portfolios. In this way, we strengthen the sustainable focus of our investment strategies.

Engagement as a central investment approach

Our sustainability principle, «ESG integration», focuses on engagement as a central tool for promoting sustainable corporate practices. This also allows us to identify and manage potential ESG risks so that the long-term value of customer investments is protected and enhanced. The focus is on counteracting climate change.

Engagement refers to the ongoing dialogue between shareholders and management. Our asset managers present important ESG issues to companies.

Engagement creates added value for our stakeholders. Successful engagement helps companies to improve their governance and the management of their environmental and social issues, which in turn reduces financial risk and improves performance. The integration of ESG criteria is also considered part of the fiduciary duty of pension funds. We expand these minimum requirements with our ambitions and the wishes of our stakeholders.

We aim to disclose the progress achieved in our engagement activities with regular publications. We follow established standards such as the ASIP ESG standard and REIDA.

Progress is reflected in the published key figures for equities and bonds.
Key figures equities
Key figures bonds

For institutional portfolios, we provide comprehensive reports that highlight the ESG risks and CO₂ measurements of each portfolio. If you have any questions, please contact our ESG experts.

Our three-step engagement strategy

Our three-step engagement strategy is designed to ensure a focused dialogue with companies to raise awareness of ESG issues and to encourage steps towards improving their practices.

Engagement via our external asset managers

Our external asset managers seek target-oriented dialogue with the management of companies in which they invest our customers’ assets. Through dialogue, asset managers can encourage them to improve their business practices surrounding ESG issues. This should help to improve the investments’ long-term returns and risk profile.

Participation in an international engagement pool

Participation in the ISS engagement pool aims to maximise the impact on companies by pooling efforts. A larger, jointly held portion of the shares allows members to exert greater pressure. By interacting with other members, we can implement our three-step engagement approach more effectively and encourage companies to make positive change.

Climate Action Engagement with the Zurich Group

Over a period of at least two years, the Zurich Group has cooperated with companies directly, as well as through Climate Action 100+ and the Net Zero Asset Owner Alliance (NZAOA). It focuses on dialogue with carbon-intensive companies to set emissions targets. If the engagement fails, Zurich Invest Ltd will vote against members of the Board of Directors and, if necessary, sell shares as a last measure.

An engagement pool is an association of investors who pool their resources and influence together to impact companies and bring about positive change. This is usually done through ongoing dialogue with the companies in which they have invested in.

An engagement pool sets common ESG goals, develops a coordinated engagement strategy, conducts joint reporting initiatives and monitors outcomes.

Engagement goals

Find out more information about the strategy, management and challenges companies face in relation to ESG
Have a positive impact on business practices, including ESG practices and ESG footprint
Membership of companies in: Net Zero Asset Manager Initiative and Climate Action 100+

Engagement measures

We support companies that take steps to reduce their CO₂ emissions and commit to net-zero targets.
We represent interest in governance (G), with a particular focus on preventing corruption.
We monitor corruption risks.
We promote integrity.
We support policies aimed at preventing bribery and unethical behavior.

Escalation process

The escalation process is an important tool for increasing the impact of engagement activities. If progress is not made or there is a lack of response from a company, it enables issues to be forwarded to more senior management or the board of directors. This increases the pressure on the company to make improvements on ESG issues. The escalation process also helps to minimise potential ESG risks.

As part of our ESG monitoring process, we continuously monitor progress and place companies on a watch list.

The minimum duration is 24 months.

If Zurich Invest Ltd considers the company’s efforts to be unsuccessful after a 24-month period, it will vote against the re-election of the CEO (and, if necessary, other members of the Board of Directors) as part of exercising its voting rights.

If Zurich Invest Ltd does not identify any significant progress after a further 12 months, a divestment will be explored under its exclusion list.

By means of regular monitoring, we ensure that an investment is reconsidered once the company has made further progress in terms of their reason for exclusion.