Quoniam: Engagement Report 2022 

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 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 2022

2022 was challenging in many respects: the war in Ukraine, the increasingly noticeable consequences of climate change with heat waves and floods, and the still ongoing Corona pandemic kept political actors, capital markets, and investors alike busy.

The Russian invasion of Ukraine on 24 February 2022 changed Europe. In addition to the immeasurable suffering of the Ukrainian population, the war of aggression and the sanctions imposed on Russia are also accompanied by shifts on the economic map. We reacted to this through our engagement process, where numerous companies from various sectors were reached, including Anheuser Busch InBev, Siemens, Fortum, and Deutsche Telekom. The conclusion: a considerable number of the companies are currently suspending their Russian business due to the war or have initiated a withdrawal from their activities there. With the companies still active in Russia, in-depth engagements are being sought to identify the business’s reasons and risks and decide on a further course of action.

The 27th United Nations Climate Change Conference was held in Egypt in November 2022. Despite falling short of a major breakthrough in reducing greenhouse gas emissions, there was an agreement in principle for a “loss and damage” compensation fund for vulnerable countries that suffer particularly severely from climate disasters. Parallelly, the UN World Conference on Nature saw the international community reach ambitious goals for biodiversity conservation. Biodiversity loss is part of the environmental protection that concerns all of us, and particularly as asset managers, it has a growing relevance because of the economic risk it represents. In this context, almost all relevant companies in the agri-food industry and manufacturers of personal and household care products were surveyed to know if they have prepared for the planned regulatory measures against deforestation and what companies are doing voluntarily to combat it. However, the initial findings from the engagement initiative could have been better, with half of the companies failing to respond despite reminders. The responses received indicate that more robust action is urgently needed.

The engagement analysts also had to deal with corporations unwilling to hold annual general meetings (AGMs) once again in person in the coming years. Therefore, we must 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. In addition, a draft law has been introduced proposing the adoption of purely virtual AGMs. Union Investment and other industry associations, such as the BVI and the DVFA, have criticized it as it falls short of expectations by not providing a genuine general debate and curtailing shareholder rights. The draft is to be revised after the consultation phase, and it is hoped that the suggestions from the associations will be reflected.

Exercise of voting rights in figures
Source: Union Investment; January 1, 2022 – December 31, 2022 
Exercise of voting rights by region 
Source Fig 2: Quoniam Asset Management GmbH

Exercise of voting rights according to voting behaviourerhalten
Source Fig 3: Quoniam Asset Management GmbH
Company dialogues in figures 
Source: Union Investment; January 1, 2022 – December 31, 2022 
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 2022.
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.