22 www.ppf.co.uk Responsible Investment Report 2019/20 23 Being active owners – continued A p Summary of engagement themes p Segregated portfolios engagement by types of issue r o in 2019/20 ach Executive remuneration (45%) Board diversity (24%) 18% Engagement programme companies Human rights (22%) 192 42% # of # of issues % of objectives objectives engaged on Business strategy (37%) (related to) # of objectives completed 19% objectives objectives with or engaged engaged progress discontinued E Reporting & disclosure (26%) xe c Environment 90 62 47% 6 u t io Social 77 37 57% 9 51% n Climate change (63%) 21% Governance 179 67 54% 10 objectives with progress Governance Strategy, risk & Environmental communication 80 26 42% 5 Total 426* 192** 51% 30 Strategy, Risk & Communication Social & Ethical Source: EOS at Federated Hermes (external provider) 2019 * We measure engagement outcomes for specifically set objectives, while engagement happens on a broader set of identified issues of concern within ESG themes. Source: EOS at Federated Hermes (external provider) 2019 L ** Total number of objectives is higher than total number of companies engaged due to more o o k than one objective per company for some companies. in g Segregated equities f Companies engaged by number of interactions o r engagement outcomes and w Board composition and In support of the ‘30% Club’, our ar interaction intensity diversity and inclusion external provider developed a board- d Engagement differs between 71 level diversity recommendation to companies – some need multiple Within our segregated equity have 30 per cent women on FTSE engagements before they take action, mandates, board composition and 100 boards and 25 per cent on FTSE while others are responsive after very diversity accounted for almost a 250 boards (read about voting on minimal interaction. We are pleased quarter of governance-related board composition and diversity on to report that, as a result of successful engagements undertaken by our page 27). engagement, at least one milestone 32 33 external provider on our behalf. was moved forward for around 50 per Number of companies Through engagement, we seek We also support the progress cent of our objectives. to underline the importance of of board and gender diversity in 1 interaction 2 or 3 4+ diversity. This includes gender, age, other jurisdictions, for instance, the interactions interactions ethnicity, nationality, background, publication of the German Corporate skills and experience to improve Governance Principles mirrors the Companies engaged by number of interactions decision-making and avoid goal of the ‘30% Club’. Currently, only groupthink. Good governance 8 per cent of German companies 36 features significantly in our have more than one woman on the engagement, as it is often the first executive board. Two thirds still step towards addressing social or have no female board members. In 29 environmental issues. the US, we also continued to push our expectations for board diversity 21 across a number of dimensions. Engagement progress 11 Milestones seeing positive progress Governance Social Environment Strategy, Risk & Communication Source: EOS at Federated Hermes (external provider) 2019