Responsible Investment
Corporate Behaviour Survey
As part of our engagement process Harbour recognises there are many factors that influence our analysis, and that environmental, social and governance (ESG) considerations have grown in significance as potential value drivers. As an integral part of our investment process, we undertake an annual Corporate Governance Survey (CGS) of all the New Zealand stocks we invest in, covering all aspects of ESG, plus further analysis of senior management/board practices. We actively engage with management and monitor both absolute and relative ratings within our investment universe. The company's CGS rating is also an important consideration in our support of management in our equity proxy voting policy.
While we actively incorporate our survey into our investment process, it is not part of our primary investment rating screens as we are still analysing its ability to add value on a purely quant basis. Furthermore, we have not restricted companies from our investment universe solely based on their CGS score; rather we seek to constructively engage with companies to encourage ongoing improvement in CGS practices in the business community.
We have also entered into a formal research relationship with an Australian funds management firm that includes the weekly sharing of corporate behaviour ratings that provide the basis for interaction with companies on ESG issues. This company adopted the United Nations Principles for Responsible Investment UNPRI) as at September 2008. Harbour is currently a signatory to the UNPRI.
Voting
All voting is recorded in both soft and hard copies. A history of Harbour's voting is provided to the audit committee quarterly, with documentation where appropriate for those instances where voting was contentious, against management recommendations or Harbour abstained. In addition, in those instances where we don't vote in accordance with the Risk Metrics Service, the reasoning is also documented.
Furthermore, a record of all voting is also available to clients on request on a similar basis. We have also undertaken to consult with clients, where so desired, prior to voting on any contentious issues or issues that may attract widespread publicity.