UOBAM believes in the value of engagement and aim to enhance risk-adjusted returns of our investments and shareholders’ value in the long run. We identify a range of thematic and material ESG issues that can affect our investee companies in the long run and engage them to ensure that they are well prepared to mitigate these issues.
Throughout the engagement process, we gain valuable insights into our investee companies’ propensity deal with ESG issues and whether they will take the appropriate measures to manage these issues. Engagement acts as an important information source to aid our investment decision.
By engaging with companies, we can also encourage improvement in their ESG disclosure, identify the need to advocate positive change, communicate our concerns and improve its practices on ESG issues, where necessary.
We prioritise our engagement based on geography of companies and size of holdings, severity of identified material ESG issue, potential to generate long-term value following a successful engagement, and specific client request(s).
UOBAM engages with companies through a variety of channels and also considers collaborative engagement with other stakeholders in the event we believe that the efficacy and chance of success of the engagement can be enhanced.
Over the course of the engagement process, UOBAM would pursue a number of courses of action should the company constantly fails to meet the standards expected.
UOBAM will vote against management at the annual company meetings if we are not satisfied with managements’ response to the ESG issues raised and ability to mitigate the identified risks. UOBAM may also consider voting for shareholder resolutions initiated in response to the ESG issues.
Ultimately, if the company still continuously fails to meet the standards expected after the engagement timeline, UOBAM will decide to reduce our exposure to investment holdings size or divest our investment in the company.