As an active investor, companies are influenced to promote sustainable business and good corporate governance. In this respect, Quoniam works together with Union Investment, which implements our guidelines in contributions and votes at general meetings and in direct dialogue with companies in the interests of our clients.
The engagement approach essentially consists of three phases: in the pre-engagement phase, problem areas in companies are identified that can be addressed through engagement activities. The two levers in the actual engagement phase are the exercise of voting rights and direct dialogue. All votes are published on the Union Investment voting dashboard shortly after the AGM. The most common topics include corporate governance issues, controversial shareholdings, carbon emissions, the switch to renewable energies, diversity, environmental issues and social standards. In the post-commitment process, the results of activities are assessed at regular intervals.
Engagement Report 2021
The second year of the pandemic has ended: Once again, the Corona virus has caused great human suffering worldwide. The resulting impact, especially the necessary containment measures brought economic challenge for us as investors. This also affects Quoniam as an active investor.
One of the challenges was demonstrated by the fact that in 2021 the majority of the general meetings were again held in the virtual space. Enabling digital participation in shareholder meetings was certainly a correct step in view of the incidences and risk of contagion. Nevertheless, we must once again insist that the pandemic is insufficient justification for cuts in shareholder rights. For this reason, we have repeatedly stressed how important it is for us that the full rights to ask questions, to speak and to receive information are guaranteed. Our assessment of a company as an asset manager also depends on how the company deals with its shareholders as owners in a difficult situation. We have vehemently and repeatedly demanded that corporations establish a technical basis for granting owners their full rights.
In addition, Union Investment’s portfolio management focused on human rights in its engagement activities last year. The focus was on the Chinese province of Xinjiang. China is accused of interning at least one million Uyghurs and members of other Muslim minorities in camps since 2017. They work in factories that also supply numerous Western companies with intermediate products, for example for the textile, consumer goods and automotive industries or even the IT sector. Union Investment wrote to a large number of issuers and asked them to answer a questionnaire we had compiled. We have evaluated most of the responses. Overall, it can be summarized that quite a few issuers have terminated their involvement or were able to credibly refute the allegations. At the same time, we are trying to identify further companies that maintain business relationships in these or other critical regions.
Exercise of voting rights in figures
Exercise of voting rights by region
Exercise of voting rights according to voting behaviourerhalten
Company dialogues in figures
Shareholder Rights Directive II (SRD II)
For the sub-funds of Quoniam Fund Selection SICAV, we outsource our engagement activities to Union Investment and refer in this context to the Engagement Policy of Union Investment. The implementation of the Engagement Policy and the publication of the voting behavior can be found in the Engagement Report 2021.
In the future, we plan to introduce our own Engagement Policy that is compatible with the Engagement Policy of our parent company. The expansion of our proxy voting platform from Broadridge will also enable us to generate reports on voting behavior for our customers in the future. Engagement services are only provided by Quoniam according to contractual agreement. Only in these cases will Quoniam provide a corresponding engagement report.