For professional investors/qualified investors only

Columbia Threadneedle Investments

Stewardship Report 2023
A review of our stewardship approach andactivities in line with global stewardship codes.

Stewardship report 2023

Contents
Foreword		

3

Chapter 1 About Columbia Threadneedle Investments
Chapter 2 ESG Integration
Chapter 3 Engagement
Chapter 4 Voting and corporate governance
Chapter 5 Meeting our clients’ needs
Chapter 6 Promoting well-functioning markets
Chapter 7 Governance and oversight
Chapter 8 Conflicts of interest
Chapter 9 Review and assurance

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10
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56
74
80
86

Appendices for global stewardship codes90

21 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Stewardship report 2023

Foreword
Welcome to our 2023 Stewardship Report, which seeks to demonstrate Columbia Threadneedle
Investments’ commitment to the UK, Taiwan, Japan and Korea Stewardship Codes. We are a global,
active asset manager and a long-term investor, and as such, investment stewardship is criticalto how we seek to deliver the investment outcomes our clients expect, while also meeting ourfiduciary duty. Our stewardship approach is complementary to our investment approach as major
shareholders and bondholders of companies all over the world – a responsibility we take seriously.
2023 was another testing year for markets and investors. Geopolitical tensions persisted, whilst
stubborn inflation and tighter monetary policy exacerbated the global cost-of-living crisis not seenfor over a decade. Yet perhaps the largest surprise of all was the resilience demonstrated by global
economies in response to these pressures, with many – in contrast to widely held predictions –avoiding recession entirely.
In this context, we believe we are more likely to make investments that generate positive financial
outcomes for our clients if we fully understand the risks and opportunities associated with theissuers in which we invest – including those that relate to environmental, social and governance(ESG) factors. We seek to turn information and data into forward-looking insights that can add
real value to our investment decisions. Collaboration across teams is a strength of our firm, andwe are proud of our efforts during 2023 to further combine our global research capability andextensive corporate access with Responsible Investment (RI) expertise. We believe this leads
to better outcomes for our clients by providing deeper insights to support investment decisions.
2023 also saw the publication of our harmonised, global RI engagement and proxy voting policy
and approach. We focused on implementing this throughout the year, the outcome of which isevidenced throughout this report – our first as a fully integrated organisation.
As investors, we believe well-governed companies and issuers are better positioned to adapt andmanage the risks and challenges inherent in their business and to capture opportunities that
foster long-term value creation. Constructive engagement and dialogue with issuers, as well aswith other stakeholders such as tenants of the real estate assets we manage, enhances thisunderstanding of risks and opportunities as we make investments on behalf of our clients. As
part of this, we seek to understand the management of financially material ESG factors and, whereappropriate, encourage improvements in practices that we believe could help drive financial returns
for our clients and contribute to a more resilient and sustainable global economy.
It is in this sprit that we share our engagement and voting activity for 2023 within this report,
alongside ESG integration and conflict management. We are proud of our commitment to ourclients and hope this report provides an insightful demonstration of our role as stewards of theircapital.

William Davies
Chief Investment Officerof Columbia Threadneedle
Investments

David Logan
Head of EMEA and Global
Business Operations

Not all products or services are available in all jurisdictions or through all firms. Columbia
Threadneedle Investments is the global brand name of the Columbia and Threadneedle group ofcompanies. Not all services, products or strategies are offered by all entities of the group.

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Stewardship report 2023

CHAPTER 1

About Columbia
Threadneedle
Investments
Columbia Threadneedle Investments is the global asset
management business of Ameriprise Financial, Inc., entrustedwith US$637bn / €577bn / £500bn on behalf of individual,
institutional and corporate clients around the world1. We offer ourclients a broad range of actively managed investment strategies
and solutions covering global, regional and domestic markets andasset classes.

Our purpose and investment beliefs
We’re driven by what matters to our clients and we’re focused on delivering their desired investment
outcomes. Our investment beliefs centre on the understanding that markets are inefficient and that
active management can play a powerful role. We believe that original, independent research makes
investment decisions smarter and therefore enables us to offer added value to our clients. We value
well-governed companies that demonstrate understanding of the key risks and opportunities they
face, including material environmental and social factors.
Four cornerstones underpin our investment beliefs, enabling us to act as responsible stewards of ourclients’ assets:

Globally connected: Our reachis expansive, with over 2,500
people – including morethan 650 investment
professionals – spanning 17 countries aroundthe world2. But for us, a global perspective isabout more than numbers; it is about thesmarter advantage we create when we bringour teams’ insights together.
We’ve built our diverse expertise and on-theground knowledge into our investment

1

processes and solutions, covering almost every
key asset class and market.

Intense research: We have over 200
research analysts around the globe,
and proprietary tools harnessing big
data and next generation analytics.
This allows us to turn information into forwardlooking insights that can add real value to ourinvestment decisions, enhancing our ability to help
deliver good financial outcomes for our clients.

	Ameriprise Financial Q4 2023 earnings release. This AUM includes Pyrford International Limited, who submit a separate UK Stewardship Code report to
the Financial Reporting Council. This report does not cover their approach, activity and outcomes in relation to stewardship.

2

4

Columbia Threadneedle Investments, as at 31 December 2023.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

Responsible ethos: We think our RI capabilities
can help our clients achieve their financial goals
whilst, for those clients for whom it is a priority,contributing through their investments toshaping the future world they seek. This continually pushes
us forward in how we strive to operate as a business indeveloping our in-depth RI research capability as support forinvestment analysis and, where applicable, portfolio
construction. Although RI research is made available to all
Columbia Threadneedle Investments portfolio managers,
each portfolio management team makes its own investment
decisions and certain teams may place more, less or noemphasis on such research in any given
investment decision.

Continuous improvement: Markets don’t standstill and neither do we. Every day, we’re looking
for opportunities to improve how we invest andwhat our clients experience – be it the separate
Investment Consultancy & Oversight team or Investment
Risk team that ensure the robustness of our investment
processes, the emphasis we place on developing our talent,or the innovative solutions that we offer. The world is
continually changing, and with it our clients’ needs, which is
why we are always evolving.

Our culture and values
We are proud of our culture at Columbia Threadneedle
Investments – it is a key driver of our success. Four corevalues enable us to maintain our culture, and ensure ourclients remain at the heart of everything we do. Beinga values-driven organisation also enables us to attract,develop and retain our talent whilst ensuring our employees
feel safe, included, valued, and respected.
These values help to shape the actions we take asa business, including how we define our investment
stewardship to help guide our focus on consistently meeting
our clients’ investment outcomes.

Client focused: Our company was built on serving
and satisfying clients, and meeting our clients’needs is always our number one priority. We
make a positive difference in our clients’ lives.

Integrity always: We uphold the highest
standards of integrity and stand behind what wesay and do. We know that trust must be earned
continually and are committed to transparency
in our financial disclosures.

Excellence in all we do: When we execute withexcellence, success naturally follows. We
provide world-class service and innovative
product solutions and are personallyaccountable for delivering results and maintaining thehighest quality.
Respect for individuals and for thecommunities in which we live and work: We
respect each other, value diversity and work as
a team to meet our goals. We value our people,
encourage their development and reward their performance.
We are good citizens in our communities.

Our responsible investment approach
A responsible ethos is one of the four cornerstones ofColumbia Threadneedle Investments. In deliveringoutcomes that are consistent with client objectives,
integrating material ESG considerations3 into ourinvestment research and stewardship can help inform
our investment decision-making. By combining intense
research, sophisticated tools, specialist expertise and acollaborative approach, we’ve continually evolved our RI
capabilities so that they can help support the investment
decisions we make on behalf of, and the range ofsolutions we can offer to, our clients.
As stakeholder and client expectations continue to evolve,
so must we. That means rigorous oversight of how weinvest on behalf of our clients, continuous learning,
and the evolution of what we do. As a complement toour research, RI analysts may collaborate with otherinvestors, through industry working groups, to help inform
our understanding of emerging ESG issues that may
impact our clients and their investments. We contributethoughtfully and proactively to government and regulatory
consultations, helping to improve industry standards andstimulate innovation.

Together our clients entrust us with

US$637bn / €577bn / £500bn

3
We consider ESG factors that have a significant positive or negative effect on an issuer’s value or performance and therefore could be material to ourconsideration of investment risk and returns in the client portfolios we manage. To help us identify and prioritise such issues for engagement, we consider
generally accepted industry frameworks.

61 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

RI developments in 2023
Below we highlight examples of how wedeveloped our RI capabilities during 2023,
across initiatives; research, data andreporting; and client-focused activities.
RI initiatives
During 2023 we continued to embed ESG factor integration
within existing strategies, as appropriate, taking into account thediffering investment priorities of our clients. More information
on ESG integration and developments in 2023 can be foundin Chapter 2. We also established a streamlined RI Approvals
Process to review participation in membership organisations,collaborative engagements and letters, corporate commitments,
and public statements to governments or government/regulatory
agencies, and ensure that such activities help support our focus
on delivering clients’ desired investment outcomes. This enabled
us to participate in the FRC’s UK Corporate Governance Codeconsultation, as well as join the 30% Club Germany, Mining2030
and the Data Convergence Initiative.
We published an internal addendum to our RI Engagement
Policy on collaborative engagement, to guide RI analysts incollaborative engagement and ensure our activities do not havea negative effect on competition in the asset management
industry and industries in which we invest; do not inadvertently
act in concert with other investors in a portfolio company; anddo not exert control over a portfolio company in a manner which
would contravene applicable regulation.

After launching our global active ownership policies in January2023, much of the year was focused on implementing theseand providing relevant training sessions for RI analysts, researchanalysts and portfolio managers. Our RI team delivered a range oftraining sessions to investment teams, including:n Presenting engagement projects to the Responsible Portfolio
Management group and the UK Equities team.
n Onboarding the Dividend Income team on the Workforce
Disclosure Initiative, and discussing human rights with the US
Large Cap team.
n RI capability training to Investment Grade, EMEA Equities,
High Yield and US Equities teams.
n Delivery of over 25 internal investment desk presentations
and six internal thematic roundtables on topics such as
human capital, energy transition, chemicals and obesity andtheir relevance when considering financially material risks
and opportunities as part of the investment decision making
process.
RI analysts also held sessions with each other on engagement
themes such as human rights and labour standards and how suchthemes can impact companies’ effective management of risk.

Research, data and reporting
Research and data outputs continued to be made available tosupport research analysts and portfolio managers’ considerationof relevant ESG factors as deemed appropriate by portfolio
managers in their management of client assets, including:4	We also vote on behalf of reo® clients – a global base of asset owners, including pension funds, insurers, asset managers, fiduciary managers, charities, family offices and discretionary managers. reo®
clients can access the full suite of our active ownership expertise including ESG research, screening, engagement, and proxy voting. The number of votes on behalf of reo® clients is not included in these
metrics here, nor throughout the rest of the report. reo® clients receive dedicated reporting.

*

For these figures, we sought independent limited assurance from KPMG. Please see p92 for more details.

81 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs

n Seven new ESG tools launched on our global investment
platform (Aladdin) to cover ESG risks and opportunities,
plus continued development of additional new tools (moreinformation can be found in Chapter 2).
n Screening of over 450 companies for inclusion in our
responsible fund range, as well as for our Sustainable
Development Goals (SDG) mapping, Principle Adverse
Indicator (PAI) and good governance assessments.
n Continued focus on controversy work, with 29 instanceswhere RI analysts reached out to or engaged companies on
United Nations Global Compact breaches.
n Frequent publication of internal ESG-focused investment
research notes for use by analysts and portfolio managers.
We also focused on reporting outputs dedicated to meeting
regulatory requirements such as stewardship codes and theEU’s SFDR regulation, as well as sustainability labels such as
Febelfin (BeNELux) or FNG (Germany, Austria, Switzerland, andLichtenstein) for certain funds.

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6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Client-focused RI activities
Throughout 2023 we continued to deliver for those of our clients
whose investment priorities incorporate specific RI preferences byenhancing our product range, client engagement and education,and expanding our expertise.
n Three product launches in EMEA with an RI focus: our CT
Sustainable Global Equity Income Fund, CT Sustainable
Global Equity Enhanced Income Fund, and Global Social
Bond strategies. We closed our US Social Bond Fund due
to lack of asset growth.
n Hosted our Responsible Investment Conference inLondon, attended by UK and European-based clients.
More information on the conference can be found in
Chapter 5.
n Expanded our presence in APAC, moving one RI productspecialist to Singapore to better meet demand andinteract with clients in this market. We also achieved
signatory status to the Japan and Taiwan stewardshipcodes for the first time. In 2024 we are also applying to
the Korea stewardship code.
n Sponsored, and presented at, the PRI in Person conferencein Tokyo, while also conducting face-to-face client meetings
while in the region.

companies engaged and 7,046
company meetings voted* by RI
analysts during 20234*

n Delivered 13 ESG Viewpoints and 12 impact reports tohighlight to clients our research and engagement on material
ESG issues, as well as the ESG performance of certain funds.
n Spoke at over 30 conferences on RI to share our knowledge
with clients and expand our presence. This included apresentation on El Nino and weather-related risks with morethan 700 US clients and prospects registered.

9Stewardship report 2023

CHAPTER 2

ESG Integration
As stated in Chapter 1, we believe the consideration offinancially material ESG factors can provide an important
perspective to our investment research. Considerationof these factors could affect an investment’s valuation byhelping assess future investment risk, unlocking potential new
investment opportunities and fulfilling our clients’ long-term
financial objectives.

Material ESG factors are incorporated within
investment research and ongoing portfolio
monitoring, with portfolio managers retaining
discretion in terms of consideration of these factors,
as they would with other potentially material factors,
when making investment decisions. Separate
approaches are taken within our Alternatives
business.

Nuances in ESG integration
Strategy and Products
It is important to recognise in how we manage ourclients’ investment portfolios the difference between
strategies that incorporate to differing degrees
a level of ESG integration to ensure appropriate
consideration of financially material risks andopportunities, and those that have a defined asustainable investment approach to meet specificfinancial and non-financial goals desired by certain of
our clients. The consideration of ESG issues forms
part of our overall investment research process andongoing portfolio monitoring for risk management
purposes. However, we also offer products to meetthe preferences of certain clients located in EMEA
that have clear, specific and binding ESG objectives
in their investment guidelines alongside financial
objectives. These include products with an elevatedlevel of ESG factor incorporation and potentially
sector/security exclusion, as well as funds that invest
entirely in sustainable investments and have both afinancial return objective and target environmental
and/or social outcomes or impacts.

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Asset class
The extent of ESG integration varies based on
asset class given risk exposures, liquidity of
instruments and the length of time we may beinvested. Asset class nuance also impacts theway we conduct active ownership; the degree ofownership or control that an investor has can greatly
impact the ability to engage and effect change that
supports shareholder value creation. For example, theownership structure and typically close relationships
with management within private equity or infrastructure
investment may allow for a larger scope forengagement relative to what may be achieved throughengagement with sovereign issuers. We may alsochoose to prioritise engagement where the portfolio
management team’s investment horizon is longer oraligns with a specific ESG factor, rather than engaging
where a holding period is shorter and that factor isunlikely to impact the value of the investment.

Geography
As part of our approach, we also take accountof geographic variations. We recognise that ESG
standards, the level of investor engagement, andresponsiveness to thematic ESG factors may be
influenced by the country or region the issuer operates
in. For example, an emerging market issuer may havelower regulatory standards on certain ESG factors
versus a European issuer. Governance structures
may vary based on the market; for example, a greater
prevalence of state-owned enterprises in somemarkets, or unique approaches like the two-tiered board
systems such as in Germany. To be effective, we must
consider ESG factors in the context of these nuances.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

Sophisticated tools power ESG integration
During 2023, we completed an extensive project to join equity,
fixed income and multi-asset investment teams together on
Aladdin, a portfolio management platform, which marked a major
step forward in our integration of legacy businesses. We also
continued to expand the availability of our ESG integration tools,
uploading these to Aladdin incrementally.
We process and analyse data from many sources to create
powerful analytical tools, designed to enhance and inform theintegration of ESG considerations into investment research,
portfolio construction and risk monitoring, by giving a clear pictureof the ESG considerations that may be financially relevant todifferent investment opportunities.
Not all metrics are available for or applicable to every portfolio
manager and the portfolios they manage, but this list represents
the range of tools available to equity, fixed income and multiasset teams globally. The extent to which these are used willvary according to the client mandate and the strategy objective
such as investment time horizon. Data limitations may also meanthat there may be incomplete portfolio coverage. Each portfolio
management team makes its own investment decisions andcertain teams may place more, less or no emphasis on particular
ESG factors in any given investment decision.

We process and analyse data frommany sources to create powerful
analytical tools

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Our ESG integration tools
ESG Materiality Ratings
A key input into our research – a real-time view on
how issuers are managing industry-specific financiallymaterial ESG risks and opportunities.

Net Zero Framework
Assesses an asset’s alignment with a net zero future,and for portfolios aligned to our net zero approach,overall portfolio progress towards net zero.

Sustainable Development Goals (SDG)
Maps issuers revenue streams to the SDG targets
as positive, negative, and neutral. Allows us to target
investments to achieve real-world outcomes.

Carbon Analytics
Provides a snapshot of the carbon efficiency ofissuers, as well as enabling portfolio-level emissions
comparisons.

Good Governance Model
Highlights issuers with practices which indicate poor
governance related to board structure, employee
relations, remuneration or tax management.

Exclusions Framework
A scalable exclusions framework that aligns with thediffering approach of products available within our range.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Key developments in 2023 for our ESG integration tools:

ESG Thematic Insights
Investment-led insights on relevant ESG themes provide
important context for stock-level analysis, enabling afuller assessment of ESG risks and opportunities.

Principal Adverse Impact Model (PAIs)
Utilising the PAI framework under the EU’s SFDR, themodel identifies issuers at risk of causing significant
adverse impacts on the environment or society.

Controversy Rating
An internal framework using the UN Global Compact
principles to assess issuers against potential breaches
of international standards; it can help us prioritise
engagement.

Specific tools and frameworks for Alternatives■ EPC and Flood risk ratings■ Evora SIERA energy and carbon analysis■ GRESB data and analytical tools

Sustainable Investments

n Completed work on our net zero tool, based on our net
zero methodology, which is now available on Aladdin.
Work continues to expand coverage of investments underthe methodology.
n Developed a bespoke tool to appraise the quality
and consistency of deforestation management ofissuers involved in soft commodity value chains. We
are iterating this tool to expand the remit to covercorporate management of all nature impacts andrisks, and plan to conclude the development of thistool in 2024.
n Refined our SDG mapping tool and increased its
applicability to portfolios. We also updated our
methodology, provided training sessions to investment
teams, and updated a client-focused whitepaper about
our SDG mapping approach.
n Released an EU SFDR workspace on Aladdin for
applicable products to allow investment teams to assess
the proportion of sustainable investments held; the split
between environmental and social-aligned sustainable
investments; and combined views to monitor Good
Governance and PAIs.

Bringing together our internal SDG, Net Zero, PAI
and Good Governance datasets we determine if aninvestment is considered sustainable.

We plan to conclude developmentof our deforestation tool in 202413

Stewardship report 2023

Engagement is additive to our research
Engaging in two-way dialogue with companies, corporate
issuers and real asset occupiers can supplement gaps inour data and help us gain a better understanding of how ESG
risks and opportunities are managed. See Chapter 3 for our RI
engagement approach and examples.

Close collaboration between our teams
Global collaboration is core to our investment approach. We
have over 45 professionals in our Responsible Investment
team (RI team), including thematic research analysts
who produce research on specific sustainability themes;
engagement and voting analysts who specialise acrossdifferent ESG issues, sectors and markets; ESG integration
specialists; and product specialists. Many RI team members
work closely with our research analysts, who collaborate
across asset classes and sectors, and undertake ESG
analysis and engagement as part of their role. RI analysts andresearch analysts work with portfolio managers to enhanceknowledge and highlight risks and opportunities, which
ultimately supports portfolio managers in their assessment of
which investments to make.

integrity of investment strategies. They engage with our portfolio
managers – to review their performance, discuss their decisionmaking, and analyse their processes, to ensure we remainaligned to our clients’ objectives and identify opportunities
to continually improve. This oversight process ensures
accountability and facilitates continuous improvement, while
maintaining manager autonomy. We believe this contributes
towards our ability to deliver repeatable investment outcomesand ensure each investment team is adhering to its philosophy
and process.

Use of service providers
We also use external data providers to support our in-houseresearch and proprietary tools. Examples include MSCI,
Bloomberg and FactSet. We prefer to utilise the raw data
provided by these vendors and to structure this into in-housetools that best support our ESG and stewardship insights, as
described earlier in this chapter. We keep data providers underreview to ensure that we are selecting the highest-quality data
source. For more information on our vendors, including selection
and monitoring, please refer to Chapter 7.

We believe our research-intense approach, as outlined above,
ensures we have a deep understanding of the wide rangeof risks and opportunities across the complex, intertwined
global landscape, and drives how we deliver better investment
outcomes for our clients.

Oversight
Across equities, fixed income and multi-asset, our separate
Investment Consultancy & Oversight team ensures the

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Global collaboration is core to ourinvestment approach1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Examples of ESG integration
across asset classes and investment desks

Equities: Industrie De Nora | Chemicals | Italy

Fixed income: Various banks

De Nora is a market leader in electrode technologies
exposed to the growing green hydrogen market. An equity
research analyst reviewed the stock and, with a thematic
research analyst from the RI team focused on the energy
transition, discussed assumptions on green hydrogenprojections, which are embedded in the valuation model. The
stock review was then presented and discussed in the EU
Small Cap team meeting, which included attendance by four
portfolio managers. In the meeting, the analysts discussed
how, despite the expertise and newly announced hydrogenprojects, they view De Nora’s green hydrogen market
demand forecasts too optimistic based on bullish industry
projections versus our more conservative views based on
our thematic research on this market. The analysts also
discussed increasing competition in the market from EU
and Chinese companies, as well as technological risk
(specifically, alternative technologies gaining pace).

In 2021 credit research analysts and thematic researchanalysts from the RI team engaged over 50 banks
to understand their climate strategy and climate risk
management approach. The analysts followed up with aseries of meetings which were designed to establish progresson targets, measurement, reporting and underwriting. The
RI analyst took the information gathered from the banks’
responses and from management/other meetings, andconducted bottom-up analysis on climate disclosure within
the sector. As a result of this analysis, the RI analyst ranked
names 1-10 based on climate risk. Fundamental rankings
by the credit research analyst, meanwhile, related almost
exclusively to governance and culture. The analysts compared

Outcome: Based on the analysis that was presented by
the equity and thematic research analysts, which involved
unclear visibility of funding of many projects, as well as aninherent risk of delay/cancellation due to various reasons
not controllable by the company and an expensive valuation,
the EU Small Cap team decided not to invest.

We believe our research-intense approachensures a deep understanding of the risks
and opportunities across the complex,
intertwined global landscapeStewardship report 2023

these fundamental rankings to the climate scores to evaluate
what changes should be considered. As a result, the analysts
made changes to 14 issuers’ fundamental rankings, moving
issuers between three and five ranks. In continuation of this workin 2023, the analysts engaged with 47 banks to gauge how they
are embracing the energy transition and managing climate changerisks. Thematic research analysts helped to formulate questions
aimed at nine areas of assessment to help understand the mostfinancially material issues resulting from a net-zero transition to
the banking sector: financed emissions performance, operational
preparedness, incorporating climate into the financing decision
making, preparedness for regulatory change, governance andopportunities. More information can be found in our thought
leadership piece ‘A unique lens on banks and net zero’.

Outcome: The analysts assigned scores of 1-10 in each of
the nine areas and made an overall assessment in terms ofwhether the bank is aligned, aligning, committed or not alignedwith a forward-looking net zero pathway. This new informationand net zero alignment status was incorporated into our overall
fundamental investment view and was used to adjust fundamental
rankings, ratings and thesis statements.
Multi-asset: Greencoat Renewables Investment Trust

more knowledge of Greencoat Renewables and how it has
performed since IPO, as well as the steps the company hastaken to diversify its business in terms of both technologies
and geographies invested in. The team were encouragedby this call and subsequently sent Greencoat Renewables
its ESG and Net Zero questionnaires and organised acall with management to gain further insight, from bothand investment and an ESG perspective. The company
answered these questionnaires satisfactorily, and confirmed
adherence to the applicable multi-asset fund investment
policy and that it is an Article 9 product under SFDR. During
the subsequent call, management provided a good overview
of the company addressing aspects such as the philosophyof the trust and team expertise. An RI analyst with climate
and environment expertise joined this initial call; they had
no major concerns with Greencoat Renewables, although
they did raise additional questions which were addressed
during a second ESG-focused call.

Outcome: The information gained through these preinvestment engagements, and particularly thesecond meeting on ESG issues, gave good
insight into Greencoat Renewables and its ESG
approach. Following the RI analyst’s review of

Background: Greencoat Renewables is an investor in eurodenominated renewable energy infrastructure assets with a focus on
Irish wind farms. For our sustainable multi-asset strategies that invest
in alternatives, focusing primarily on listed investment trusts, we
require certain minimum criteria to be met, including the exclusion of
weapons and tobacco; a general commitment to ESG integration; anda commitment to positive sustainable investment trends.

Action: The Multi-Asset team initially had a call with the analyst
covering Greencoat Renewables at broker Davy. This provided

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We use external data providers to
support our in-house research andproprietary ESG integration tools1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

Greencoat Renewables’s responses, both on calls and to thequestionnaires, the Multi-Asset team initiated a holding in thecompany and are looking to potentially engage in the future on
certain points raised.

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Managing
climate risks andimplementing our net
zero commitment

Alternatives: Real Estate – Milliners Yard | United
Kingdom

Background: The supply-demand imbalance of the UK
rental market is such that the flow of capital and its
deployment and ongoing management can deliver coremarket investment returns, underpinned by defensive andsustainable income streams, while creating positive impact
by increasing housing supply and improving the quality andenvironmental credentials of available residents’ homes.

Our 2023 climate change report details how wemanage climate-related risks and opportunities, inline with the recommendations of the Taskforce on
Climate-related Financial Disclosures (TCFD). During2023 we also published product-level TCFD reports
for a broad range of our products, covering our
UK-domiciled funds and many of our EU-domiciled
funds.

Action: Through a development partnership with UK housing
association Home Group, our UK Real Estate team haveforward funded the development of Milliners Yard – anapartment block in Liverpool located on the site of a former
department store, within walking distance of some of thelargest key worker organisations in the city, such as a hospitaland two universities. During 2023, members of the teamvisited the site to celebrate the ‘topping out’ ceremony,signifying the successful completion of the structural phase of
the construction.

As a signatory to the NZAMI, achieving the goal of
net zero emissions by 2050 or sooner with respect
to our assets under management is subject todirection by our clients on a portfolio-by-portfolio
basis.5 Our net zero methodology currently only
covers equities and corporate bonds, as well
as direct real estate investments in the UK andcontinental Europe. We are implementing our net
zero commitment in stages, analysing portfolios
individually to ensure we are using an effective
and robust approach. We are also developing
methodologies for other asset classes.

Outcome: Once complete, the site will host 258 low-carbon,
quality apartments with a targeted affordability of 25% ofmedian local household incomes, while 10% of theunits will be offered at a 20% rental discount. As well as
providing locally affordable rental housing, the scheme
will also contribute to the larger regeneration of thearea, providing community space and amenities, while
enhancing biodiversity.

We currently have no products aligned to ourapproach to implementing NZAMI that are available
for sale to US investors and no clients in the US who
have directed that their portfolios be managed in linewith our NZAMI approach.
Critical to our role as an active manager, we engage
with the companies we invest in to engage in aconstructive dialogue about their transition towards
net zero and deliver for their stakeholders – further
details of our RI engagement can be found in
Chapter 3. We offer a broad choice in investment
strategies for individual and institutional clientswith differing priorities, including solutions thatmeet the growing client demand for more climateaware investment opportunities, and we are further
evolving our offering in this regard.

5 .36% of our AUM aligned with our net zero commitment as at November 2022. Pyrford
7International has been excluded from this AUM count.

17

Stewardship report 2023

CHAPTER 3

Engagement
As active owners, engagement dialogue, including
around ESG factors (RI engagement) with the issuers
we invest in on behalf of our clients is an integral
part of our approach to research and investment,
and as stewards of client capital.

How we engage with issuers
During 2023, we focused on
implementing our harmonised, global
approach to RI engagement which
we developed during 2022, bringing
together different approaches from
Columbia Threadneedle’s businesses.
We define RI engagement as having
constructive dialogue with issuers
on a range of risks including thoselinked to ESG factors that could havea material impact on their businesses
and, where necessary, encouraging
improvement in management practices
that we believe could help drive financial
returns for our clients. Consistent withclient expectations, our primary driverfor RI engagement is to support longterm value creation by mitigating risk,
capitalising on opportunities linked torange of factors including those relating
to ESG, and for certain clients (including
all clients serviced by our EMEA
business) reducing any material negative
impact that our investment decisions
6

could have on these factors. We believe
that, by engaging in this way, we can playa part in building a more sustainable andresilient global economy, which is ultimately
beneficial for our clients. This can also help
drive positive impacts that are in line withthe achievement of the SDGs, which someof our clients look to achieve as part oftheir investment priorities.
Underlying each theme is a rangeof sub-themes to help focus ourengagement. We monitor the outcomesof our engagement and report on our
progress to our clients and throughpublic reporting.
RI engagement is issuer-focused andpredominantly executed for equities
and corporate fixed income. Within our
Alternatives business, engagement withreal estate tenants and other stakeholders
within private equity and infrastructureis also extensive and covered later inthis chapter. Engagement in Alternatives
is covered in the ‘Stewardship andactive ownership case studies acrossOur reo® service is used by a global client base of asset owners, including pension funds, insurers, asset managers, fiduciary
managers, charities, family offices and discretionary managers. Clients can access the full suite of our active ownership expertise
including ESG research, screening, engagement, and proxy voting.

18

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’
needs

1

2

3

Labourstandards

4

5

Publichealth7

Corporate
governance67 Governanceandoversight

8 C
 onflictsof interest9 Review andassurancevarious asset classes’ section below.
We can also cover the following asset
classes when requested by investment
teams: Infrastructure; Collateralised Loan
Obligations; Asset Backed Securities;
Municipal Bonds; and Commodities.
During 2023, we have been designing andtesting a dedicated sovereign engagement
programme.

Our engagement is structured aroundseven high-level themes:

Climatechange6 P romoting
well‑functioning
markets

Environmental
stewardship,includingbiodiversity

For our responsible engagement overlay(reo®) clients6, engagement covers listed
equities, and corporate (financial and nonfinancial) credit.

HumanrightsOur RI engagement with companies isreinforced by the broader RI-linked public
policy engagement.

Business
conduct

Collaboration across asset classes andthematic and sectorial disciplines
ensures an informed approach. Ourconsultative, research-driven process
for engaging corporate leadership andmanagement contributes to ourinvestment insights (see Chapter 2),
collaboration (see the ‘Collaboration’section of this chapter), appropriate
escalation (see the ‘Escalation’ sectionof this chapter) and our exercise of client
voting rights (see Chapter 4).

19

Stewardship report 2023

Engagement identificationand process
Our RI engagement with issuersis largely executed through close
collaboration between RI analysts,
research analysts and portfolio
managers. The RI team prioritises
engagement in alignment withoverall preferences7 ofmanaged asset clients andreo® clients as may beprovided to us:

1

Priority issuers

We identify and prioritise issuers for RI
engagement based on the following:■ Assessment of potential impact of ESG
risk and opportunity factors now andin the future, using financial materialityof risk issues in accordance with SASB
Standards8■ Investment teams’ and researchanalysts’ judgement and expertise■ Issuers’ previous engagement trackrecord■ The significance, probability ofoccurrence, and severity of adverse

impacts on ESG factors, including
their potentially irremediablecharacter, scale (gravity), scope andcharacter (noting whether remedialaction is possible)■ Assessment of likelihood of successfor engagement■ Level of exposure, typically based on
size of holding across both managed
client assets and reo® client assets
Additional considerations may bebrought in depending on the issue underengagement, such as specialist data
sources to identify issuers subject to7

Including our annual reo® client consultation on issuer and thematic priorities. More information can be found in Chapter 5.

8

Sustainability Accounting Standards Board20

a specific risk we are focusing on. This
includes engagement projects (seebelow), and our net zero engagement,
which is prioritised according to a setof factors including financed emissions
intensity and the quality of climate
strategy.
We set specific engagement objectives(Objectives) and track progressagainst these to assess achievements(Milestones) and determine next
steps. When we open discussions
with individual issuers, we aim toclearly communicate our Objectives,
expectations and desired outcomes.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets2023 projects
■
■
■
■
■
■
■
■
■
■

2

Engagement projects

On an annual basis, RI analysts conduct
a high-level assessment of a wide rangeof current and emerging ESG issues
and their potential impacts on long-term
investment returns, and on the economy,
environment, and society. The resultsof this assessment help determine thespecific ESG issues on which we will focus
our RI engagement activities going forward.
Project-based engagements on specificissues normally run for two to three years
and are concluded by a final assessmentof progress. During 2023, this assessment
included review by our research analyst
and portfolio management teams, a
web-based survey and multiple emails
addressing all investment professionals
requesting feedback. We are working toevolve this further for future years.

Coal phase-out 2.0
Deforestation
Emissions and plastic waste
Responsible governance ofArtificial Intelligence
Diversity in clinical trials
Improving board gender diversity
in Asia
Climate change and banks
Physical risks of climate change
Social audit assurance
Mandatory human rights due
diligence3

Event-driven

engagement

Part of our RI engagement happens inreaction to scheduled events such as
AGMs, where we would outline shareholder
expectations, and encourage changes to anissuer’s operations, governance structure or
strategic approaches with the aim of helping
to deliver long-term value for shareholders.
RI engagement activity may also occur in
response to unscheduled and controversial
events, such as scandals or major
environmental disasters linked to corporate
operations. Our event-driven engagement
also happens in reaction to potential issuer
breaches of global standards, such as
the OECD (Organisation for Economic Cooperation and Development) guidelines for
multinational enterprises or the UN Global
Compact. Collaborative engagement would
also fall under this prioritisation category.

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

2024 projects
Continued from 2023
Coal phase-out 2.0
Deforestation
Emissions and plastic waste
Responsible governance ofArtificial Intelligence■ Diversity in clinical trials■ Improving board gender diversity
in Asia■■■■

New projects for 2024
■ Responsible water stewardship■ Sustainable Food Systems■ Sustainable Critical Mineral
Supply Chains■ Independent Board Evaluations

4Engagement for
specific mandates,
fund strategies, or
regulatory requirements

Individual client mandates, fund strategies
or jurisdictional regulatory requirements
may require a dedicated approach toengagement that is different to theapproach outlined above. This will beoutlined in client mandate documentation
and/or fund/ strategy-specific investment
policies.

21

Stewardship report 2023

Conducting RI engagement

resolutions, intervening at an AGM, or partially or fully divesting.

We engage at different levels within issuers depending on thenature of our Objectives, including with the board, executive
management, investor relations, sustainability leadership,
and operational specialists. Our approach to conducting RI
engagement is to use constructive, confidential dialogue, typicallyinteracting one-to-one with issuers and building a relationship oftrust over time as long-term investors. Where appropriate, we may
also form or join coalitions with other investors, non-governmentalorganisations (NGOs) or industry groups, whilst ensuring that we
adhere to applicable anti-trust competition legal and regulatory
requirements and any other applicable limitations when doing so.
Please see chapter 6 for more information.

Escalation
If issuers do not demonstrate progress on matters that we
believe deliver shareholder value for our clients, we may consider
collaborative engagement9, public statements, filing shareholder

Tracking engagement progress
Objectives, Engagement Activity and Milestones are tracked andmonitored for ESG-focused engagements. RI team engagement
is tracked in a database, and content shared with all researchanalysts and portfolio managers via a dedicated email distribution
list. The database allows us to produce engagement activity
reports for internal use and, as appropriate, clients, or the generalpublic.
We measure and report on the success of RI engagement throughthe assignment of Milestones, which recognise improvements inissuers’ ESG policy, management systems or practices against the
Objectives that were set. Milestones are ascribed using a threestar rating system, with three stars indicating the most significant
impact of change and one star reflecting smaller, incremental
change along a pathway for the issuer, or across a broader
context, for the relevant industry as a whole.

RI engagement statistics for 2023

1,424
867

*

total engagements

45
217
*

		

*

companies engaged

		countries covered by engagement*

total number of Milestones

Source: Columbia Threadneedle Investments, as at 31 December 2023.
*For these figures, we sought independent limited assurance from KPMG LLP. Please see p92 for more details. Please refer to our Reporting Criteria document for our approach to theclassification, calculation and reporting of stewardship data.

Environmental: Climate change remained a key component of ourenvironmental engagement during 2023. Specific areas of focus
included energy transition, companies’ net zero strategies, andemissions management. A sizeable portion of our environmental
stewardship engagement focused on natural resources.
Product sustainability and pollution impact were other areas ofengagement.

Social: During 2023, our engagement on social issues waslargely focused on labour standards and human rights. Topics of
9engagement included forced and child labour, gender diversity inthe workplace, and human rights due diligence. We also engaged
companies on public health, on issues such as access tohealthcare and nutrition.

Governance: Board diversity was an important aspect of ourcorporate governance engagement during 2023, with a particularfocus on gender diversity. We also engaged on board effectivenessand ESG oversight.

Collaborative engagement is not exclusively used for escalation purposes but can also be used, where appropriate, as standard engagement with other stakeholders.

221 About us2 E SG
integration

3 Engagement

5 M eeting
ourclients’needs4 Voting andcorporate
governance6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

RI engagement breakdowns

Engagements by theme

Issuers engaged by area

%

E 36

%
366
SS3

E 36 % %Climate change

GG2288%%23%

Climate change
23%
Environmental
stewardship 13% 13%
Environmental
stewardship

Labourstandards
Labourstandards
PublichealthPublichealthHumanrightsHumanrights

20% 20%
4% 4%
12% 12%Business
conduct
Business
conduct
Corporate
governanceCorporate
governance

5% 5%
23% 23%

EuropeNorth America
Asia (ex Japan)
Japan
Other

Engagements by Sector

4488%

Industrials
Health Care
Financials
Information Technology
Consumer Discretionary
Engagement
by method
Real EstateConsumer Staples
Materials
Utilities
EnergyCommunication Services

Engagement Intensity
Industrials
Health Care
Financials
Information Technology
Consumer Discretionary
Real EstateConsumer Staples
Materials
Utilities
EnergyCommunication Services
13%
9%
11%
11%
16%
7%
8%
13%Meeting
Meeting7%
Meeting
personMeeting(in (inpersonor or
5%teleconference)teleconference)
1%Company consultation

13%
9%
11%
11%
16%
7%
8%
13%
7%
5%
1%

36%
31%
21%
7%
6%

One-to-one
Collaborative
Project

79%
16%
4%

36%
31%
21%
7%
6%

79%
16%
4%

Engagement by leadership level
48%

%

5 1%

51

Board director(s),non-executive(s)Senior Executives
Operational Specialist
Investor Relations
Corporate Secretary
Company Consultant

48%
45% 45%1%
1%
1%Company consultation
Conference/ Seminar
Conference/ Seminar
Field
triptripandandon-sitevisit visit
Field
on-site1%
1%
1%Correspondence
Correspondence
LetterLetterEmail

51% 51%
8%
8%
43%

Email

One-to-one
Collaborative
Project

EuropeNorth America
Asia (ex Japan)
Japan
Other

18%
13%
17%
47%
3%
1%

43%

Board director(s),non-executive(s)Senior Executives
Operational Specialist
Investor Relations
Corporate Secretary
Company Consultant

Source for all charts: Columbia Threadneedle Investments, as at 31 December 2023. Rounding may result in chart figures not equaling 100%.

18%
13%
17%
47%
3%
1%

23

Stewardship report 2023

Engagement
examplesThe following examples reflect engagement conducted by RI analysts.
The insights gained from these engagements are made available
to investment desks to support their research and investment
decision-making.

RWE AG
Utilities
Germany
Theme: Climate Change
Subtheme(s): Emissions Management, Energy Transition, Just
Transition, Net zero strategy
SDG:

SDG Target(s): 13.2

BackgroundRWE submitted a new set of 1.5°C targets to the Sciencebased Targets initiative in May 2023 and are awaiting validation.
The focus of our RI engagement has been on the company’s
decarbonisation strategy to meet these targets.

ActionRI analysts discussed RWE’s coal phase-out timelines andstrategy for the end-of-life for these assets, their natural gas
strategy, and their approach to hydrogen and Carbon Capture,

24

Usage and Storage (CCUS). They also discussed in various
meetings with the Head of Sustainability, CFO, and representativesof IR the climate component of their executive remunerationand the progress towards their renewables targets. RWE statedthat the coal foundation model (i.e. establishing a foundation toorganise the dismantling of coal-fired power generation) which
had been discussed within the German government is unlikely tomaterialise. However, they confirmed that they have agreed withthe government to a 2030 coal phase-out, bringing this forwardfrom 2038. RWE has previously highlighted developing ‘green
conversion roadmaps’ for these assets, and we encouraged
additional disclosure on the end-of-life plans for these. RWE noted
policy uncertainty, particularly regarding support for the conversionof some of these assets to hydrogen-ready gas-fired plants, as areason for limited disclosure. Regarding their renewables strategy,
RWE highlighted the recent EU emergency permitting measuresand revisions to the EU Renewables Directive, in part now
incorporated into German law, will speed up the permitting process
for renewables. They believe this should help them meet theirrenewables capacity targets for onshore, offshore and solar energy.

OutcomeRWE have been very open to engagement and have taken onboard
many of the RI analysts’ requests for additional disclosure
regarding their climate risk management. They are currently in theprocess of revising their ‘Growing Green’ strategy, following several
government policy updates, and highlighted that they will look toprovide more public disclosure on the topics above. RI analysts
will review the strategy and additional disclosures before further
engagement.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’
needs

Adobe Inc
Information technology
United States
Theme: Human Rights
Subtheme(s): Human Rights OtherSDG:

SDG Target(s): 10.3

Background
Artificial Intelligence (AI) is embedded in many of Adobe’s offeringsand has the power to drive greater innovation and monetization
opportunities. Their approach to Responsible AI was high on our
RI engagement agenda.

ActionRI and research analysts held a dialogue with Adobe’s Investor
Relations and General Counsel to learn more about the company’s
approach to Responsible AI. They asked about the governanceapproach and requested further details on its impact assessment.

General Mills
Consumer staples
United States
Theme: Corporate Governance
Subtheme(s): Capital Structure and Shareholder Rights

6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

They also discussed areas of biggest potential risks and how
Adobe approaches mitigating them. The company formed an
AI ethics governance committee several years ago which is
responsible for conducting an AI ethics review every time an AI
feature is proposed. It involves identifying potential harm andbias and multiple tests to minimise and eliminate these risks
where possible. To measure the success of its efforts to mitigate
AI bias or harm, Adobe tracks the percentage of outputs that are
categorised as harmful. Adobe provided context about its Firefly
tool (its generative machine learning model used in the field ofdesign), which is trained solely on its licensed assets in order toreduce copyright related risks. It also mentioned that a wide variety
of teams are involved in the oversight of testing, to ensure diversityof perspectives are considered. Beyond social issues, the risks
on the environment front in relation to AI are believed to be more
nascent. Nonetheless, the topic is addressed at the Board level
when considering the potential impact on its net zero commitment.

Outcome
Adobe has been ahead of the curve on Responsible AI, which
presents a revenue opportunity, competitive advantage, and theopportunity for proactive risk mitigation. The RI and researchanalysts were encouraged by the constructive dialogue, using theopportunity to better understand Adobe’s leading approach. They
will take some of these findings and outcomes into our internal
Responsible AI assessment framework as Responsible AI remains
a key topic for 2024. Engagements such as these are key for
us to continuously evolve our understanding of how companies
are thinking about Responsible AI and to learn and share goodpractices as we encourage industry-wide improvement.

implications for shareholder rights. They highlighted that given
General Mills’s by-laws currently do not allow shareholders theright to call a meeting, we view this proposal as a positive step.
However, they inquired about the considerations the company took
in determining the 25% threshold and underscored that it would be
unlikely for shareholders to reach such a high percentage, given
the more passive investment strategies of their largest institutional
investor shareholders.

SDG: N/A

OutcomeBackground
Recent RI engagements with General Mills, including their AssistantGeneral Counsel, Assistant Corporate Secretary, and the Corporate
Secretary, have focused on governance topics: at its 2023 AGM,
General Mills tabled a management proposal to allow shareholders
holding 25% of common stock to request a special meeting. Thiswas shortly followed by a shareholder proposal of a 10% threshold.

ActionRI analysts engaged to discuss the management proposal andWe view special meetings as a positive shareholder right, allowing
shareholders displeased with the company or the board torequest a meeting to enact change. While our view is that 10% is
a more suitable threshold than 25%, we believe that General Mills
opening this avenue to shareholders is nonetheless a positive
development. As such, we chose to support both the management
and shareholder proposals, thereby underscoring the suitabilityof the 10% threshold. Both proposals passed, with management
receiving c71% support and the proponent receiving c60%. In thesecircumstances, we anticipate the Board adopting the 10% threshold,leading to a significant step forward in shareholders rights at
General Mills.

25

Stewardship report 2023

Engagement casestudies across various
asset classes
The below examples highlight examples of engagement led by different investment
desks (sometimes together with RI analysts), and we include what impact theengagement had on the investment case.
The engagement style can vary by asset class, as reflected in the examples: some engagement is more focused on obtaining
information to help monitor companies’ business practices and inform investment decisions, while some engagement is conducted
specifically to encourage improvement in companies’ management of ESG issues, to the extent deemed financially material.

Equities

UnileverConsumer goods
United Kingdom

targets and granular disclosure of the capital expenditure tomeet them. On plastics, they were pleased to see the increase
in resource dedicated to plastic risk management across thegroup and the efforts taken in cross-industry collaboration.
Expectations now are for a robust strategy around flexible
packaging and sachets.

Background

Outcome

RI analysts joined members of the UK Equities team for five ESGfocused engagements with Unilever during 2023, and several
meetings with management during results periods, to determine
the quality of board oversight and encourage alignment between
strategy and sustainability.

The RI analysts and UK Equities team were encouraged by theengagements, concluding that a sharper focus on financiallymaterial ESG factors – supported by strong governancestructures and pay incentives – can drive business from
customers and consumers who increasing prefer sustainable,
traceable products. Unilever’s efforts position itself well forincreasing global sustainable regulation, and its position asa leading consumer goods company means that while it isfrequently scrutinised by NGOs, the press, and investors,
it has potential to effect positive change. This can bebeneficial for sales, profit and its license to operate. Comfort
was gained from the meetings that Unilever’s approach tosustainability aligns with its strategy and is industry-leading,and the UK Equities team increased their exposure to Unilever
during the year.

ActionThey met the new board chair and head of the remunerationcommittee chair, and encouraged a focus on the ESG factors
most material for the business to support a turnaround:human capital, climate change and plastic. Human capital andclimate change meetings focused on culture, the importanceof target-setting and improving accountability to drive
performance. They were pleased to see more focused climate261 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’
needs

Mettler-Toledo International
Healthcare
United States

BackgroundA portfolio manager from the Global Equities team, alongwith an RI analyst focused on healthcare, spoke with MettlerToledo’s Head of Sustainability and Investor Relations on several
environmental and social topics.

ActionThe focus of the call was on human capital management, DEI(diversity, equity, inclusion) efforts, and supplier/humanrights due diligence. The portfolio manager and RI analyst
were pleased to see information on the company’s employee
engagement results, which they had previously engaged
on. A Milestone was logged for this. On DEI efforts, MettlerToledo is not considering publishing ethnicity data; they
will most likely only do this when regulation requires. They havealso dropped their DEI targets on female representation in
management and board positions. The company wants to moveaway from quotas and will now focus on DEI training and diverse
candidate pools in recruitments processes. While appreciating
the internal and external pressures the company faces on(publicly) committing to DEI targets, the portfolio manager and
RI analyst stressed that initial quotas historically have proven to6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

be a catalyst for more diversity and representation throughout
the workforce. With regards to human rights and supplier due
diligence, they stressed the relevance of having more insight
into Mettler-Toledo’s supplier due diligence, especially because
the company has a large and diverse supplier base with a large
proportion in high-risk countries such as China.

OutcomeOverall, the call was considered very insightful, and the
Global Equities team remain invested in Mettler Toledo.
Along with the RI analyst, they will carefully monitor andfurther engage Mettler-Toledo on its DEI practices andsupplier due diligence.

Our engagement style can vary byasset class

Fixed income

Grünenthal
Pharmaceuticals
Germany

Background
Members of the High Yield Credit team engaged the Grünenthal
management team with the aim of informing them about the
impact of SFDR on issuers, and to assess the robustness of theirgovernance structure.

ActionDuring the engagement, it was clear that while the CEO and
CFO have limited knowledge about ESG/RI, the CRO was very
knowledgeable. However, they did need to stress impact of theregulatory changes, which were initially dismissed by the CRO.

Grünenthal disclosures currently are strong in comparison to otherprivate healthcare companies (data includes e.g. scope 1,2 and 3
emissions; water and waste management). The High Yield Credit
team highlighted the benefits of further improving disclosures
via discussion of Principle Adverse Indicator data points. Someof the required information is already available (e.g. gender pay
gap assessment). Grünenthal stated they are setting up an ESG
dashboard to track KPIs, research progress, and ambitions,among other points.

OutcomeThe High Yield Credit team look forward to Grünenthal’s updated
report, which will elaborate on their existing coverage. The
information provided during the engagement demonstrated
structure in place on conflict of interest awareness, with regards toboth the board as well as within the business (suppliers/partners).
Work is being done to increase women on the board as well as toprovide disclosure of gender participation and a gender pay gap
report. The team maintained their overweight position.

27

Stewardship report 2023

Private Equity
Private equity can encourage ESG best practice withincompanies given we typically hold material stakes incompanies on behalf of our clients and have close
relationships with management. Stewardship is therefore alarge part of our RI strategy within private equity. The entire
Private Equity team engages with investee companies on ESG
issues throughout the year during meetings, site visits, AGMs
and catch-up calls. Their Annual ESG Survey acts as their

Cyberhawk
Energy services

formal engagement tool and is sent to every current company
that they hold. The survey collects over 70 ESG datapoints
based on four core elements: ESG culture and commitments;
investment process; active ownership; and oversight andreporting. Respondents’ answers are scored and tracked
annually and published in our annual Private Equity ESG
Report. This exercise allows the team to track and monitor ourinvestments and facilitates areas for engagement.

by removing people from hazardous working environments such asrope access or scaffolding. As such, Cyberhawk’s economic and
ESG performance are intrinsically linked.

United Kingdom

ActionBackgroundIn 2019 the Private Equity team invested into Cyberhawk, aScottish provider of energy infrastructure asset inspections
using Unmanned Aerial Vehicles (drones) and proprietary asset
management software. Cyberhawk’s technology replaces highCO2-emitting helicopters, while its software allows assets tobe monitored remotely thereby reducing staff travel and GHG
emissions. Its inspection techniques also increase health & safety

The entire Private Equity teamengages with investee companies on
ESG issues

28

Under the Private Equity team’s ownership, climate change andhealth & safety have become a strategic priority for Cyberhawk.
The Private Equity team’s Board seat affords them the ability
to drive and articulate progress. They have worked closely withmanagement to embed Board-level metrics that align revenue
generation to key ESG topics e.g., the number of staff-hours saved
from hazardous working environments and GHG-emission reduction.

OutcomeThe Private Equity team continue to hold Cyberhawk. Cyberhawk
committed to the United Nations Race to Zero campaign where
its objectives are to halve GHG-emissions before 2030, develop aroadmap to net zero by 2050, and publish its progress annually.
In its 2023 ESG Report, Cyberhawk disclosed that it reduced its
GHG emissions by 16% to 506 tonnes (ahead of SBTi’s 5% target),of which 41% was Scope 1, 5% was Scope 2 and 54% was Scope
3. Cyberhawk also reported that its technology saved customers
11,327 days of surveying time in hazardous areas, almost 50%
increase from the prior year.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance

Liability Driven Investment (LDI)For LDI, ESG factors are considered for selecting andmonitoring of counterparties. When building our list of
approved counterparties, we include ESG scores, buildingon MSCI ESG data and weighted for thematic relevance persector as determined by RI analysts, who also engage withcounterparties on ESG risks and opportunities identified.
During 2023, RI analysts conducted over 50 engagementswith over 30 banks on their management of climate-related
financial risks. Through the course of this engagement,
we have seen enhancements in banks’ governance andmanagement of climate-related financial risks, with manybanks now incorporating climate risks into their risk appetitestatements and continuing to strengthen their climate
scenario analysis. We have also seen an expansion of thesectors and portion of banks’ loan books covered by financed
emissions targets, and greater detail on their strategy toachieve these. We are also members of the Institutional
Investors Group on Climate Change (IIGCC) Net Zero Bank
working group, engaging collaboratively alongside otherinstitutional investors to better understand how banks in
Europe, Canada and Asia are managing climate-related
financial risks.

Real EstateWithin our Real Estate business across the UK and Europe,
we have a framework under which we engage with ourinvestors, occupiers, property managers, environmental
advisors and our supply chain. Our Real Estate teams canattend to physical buildings to control ESG characteristics,
and they can talk to tenants to seek aligned interests or try
to encourage sustainable behaviour, which can be formalised
through green leases. For example, our Real Estate business
committed to achieving net zero carbon emissions across ourmanaged direct commercial real estate investment businessby 2050 or sooner working in partnership with our clients.
To help achieve this commitment, the Real Estate team areencouraging the use of green lease clauses; pursuing robust
tenant engagement strategies through methodical outreach5 M
 eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

and targeted dialogue to seek landlord and tenant aligned
interests around renewable energy sources; and increasing
the use of research and technology to help drive data captureand decision-making. Each of these functions requires us todevelop effective partnerships. During 2023, the Real Estateteam participated in the IIGCC real estate working groupfocused on the sector’s contribution to the updated guidanceon the Net Zero Investment Framework.
Our US Real Estate business engages with stakeholders
on material ESG topics. This includes engaging property
managers to encourage the implementation of sustainability
approaches; and distributing educational materials, hosting
events and conducting satisfaction surveys to encouragesustainable practices by tenants.

Infrastructure
In most cases in this asset class our clients are theoutright or substantial majority holders in the assets andcompanies in our portfolios, thus our Infrastructure teamviews are conveyed directly through our clients’ ownership.
Our European Sustainable Infrastructure Strategy follows
a custom-built investment framework ‘OMS’ (Operational,
Macroeconomic, Sustainable), where a progressive
approach to assessing and integrating sustainability
risks and opportunities is undertaken through the abovementioned ownership structures of the assets andcompanies. A sustainability lifecycle monitoring framework,
which is built around and based on various international
standards and frameworks (e.g., FMO, SASB, and SDGs)
covering 58 measures across 18 ESG themes, allows us toengage with companies and assets actively and regularly
on ESG topics.
We continue to work on extending our active ownershipefforts to all asset classes we invest in on behalf of ourclients. For example, during the latter half of 2023, we began
discussions with our Sovereign Debt team about building out
our engagement capabilities within this asset class.

29

Stewardship report 2023

RI engagement in practice– 2023 Milestones
RI analysts record Milestones where companies
make tangible improvement in their policies
and practices in alignment with our Objectives.
In 2023, we recorded 217 Milestones*
where issuers improved ESG policies andpractices following our engagement.

change23%a three-star rating system. One star is awarded for a smaller change to ESG practices;
ToClimaterecordMilestones we use
Environmental stewardship13%
two stars are awarded for meaningful updates/changes to ESG practices; and three stars are awarded for material
Labour standards
20%changesof significant ESG importance.
Below provides examples of different Milestone ratings.
Public health4%
Human rights

12%

Business conduct
Corporate governance

5%
23%

Milestones achieved byengagement theme

DaisekiJapan
Industrials
SDG:

S
%

32

E 4 5%

Milestone: %2
G2

Target: 13.2 – Integrate climate change plans into policies
and strategies
Issue: Climate change

Set SBTi certified emissions reduction target
Climate change
Environmental stewardship

33%
12%

Human Rights
Labour Standards
Public Health

11%
18%
3%

Corporate governanceBusiness conduct

21%
2%

Daiseki set science-based emissions reduction targets
that have been certified by the Science Based Targets
Initiative. The commitment targets a 34% reduction in
Scope 1+2 and 20% reduction in Scope 3 emissions by
FY2028 compared to FY2022. RI analysts have been
engaging Daiseki on its emissions management programme
since 2021.

Source: Columbia Threadneedle Investments, as at 31 December 2023
*For this figure, we sought independent limited assurance from KPMG LLP. Please see p92 for more details. Please refer to our Reporting Criteria document for our approach to the classification, calculation
and reporting of stewardship data.

301 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Hewlett Packard EnterpriseMediaTek

United States

TaiwanInformation technology

Information technology

SDG:

SDG:

Milestone: 

Milestone: Target(s): 8.7 – Eradicate forced labour, modern slavery &human trafficking

Target: 5.5 – Ensure full equality of opportunity for women,
including at leadership levels

Issue: Human rights

Issue: Corporate governance

Enhanced human rights due diligence

Added first female director to board

Strengthened and formalised human rights due diligence forsales in high-risk areas. The company also partnered with
BSR (Business for Social Responsibility) and published bestpractices for human rights due diligence in technology sales
channels. RI analysts had previously spoken to the company
about improving its approach to customer due diligence
regarding technology sales in high-risk areas.

MediaTek is part of our “improve board gender diversity inAsia” RI engagement project. We are glad that the company
added its first female director at the AGM in May 2023. RI
analysts will continue to engage on its board diversity policy
and diversity at the senior executive level.

Commerzbank

Nestlé

Germany

Switzerland

Financials

Consumer staples

SDG:

SDG:

Milestone: Milestone: Target: 12.2 – Sustainably manage and make efficient use ofnatural resources

Target: 2.1 – End hunger and ensure access to safe andnutritious foodIssue: Environmental stewardship

Issue: Public health

Consideration of biodiversity in its risk management

Target to increase sales of healthier products

The bank has – for the first time – published a factsheet
where it outlines how biodiversity affects the bank and how
related risks are being considered in lending. As the approachis still rather descriptive than strategically fundamental, we
still see room for improvement.

In September 2023, Nestlé announced a target to grow sales of its
more nutritious foods by CHF 20-25 billion by 2030. This represents
approximately 50% growth over their 2022 sales. The target applies
to Nestlé products with a Health Star Rating (HSR) of 3.5 stars
or more, together with its specialised nutrition products. We had
engaged on nutrition and specifically setting a sales target, together
with other investors part of ShareAction’s Healthy Markets Initiative.
While we believe that a proportional sales target (increasing sales ofhealthier products while decreasing sales of unhealthier products)
has the most long-term impact on public health, we acknowledge
the significant step that Nestlé has taken with this target.

31

Stewardship report 2023

Engagement and Sustainable
Development Goals (SDGs)

KSC
In 2015, United Nations Member States set a target date of 2030 to achieve the 17
Sustainable Development Goals (SDGs), which are a blueprint to achieve a betterand more sustainable future for all by addressing global challenges such as poverty,
climate change and peace.

92%
positivealignment with
the SDGs

321 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs2023 marked the half-way point to 2030. While many companies
now have sustainability strategies aligned with the SDG
framework, robust implementation and meaningful and lastingchange is imperative as we move into a new a new phase ofaccelerated progress towards the goals.
We believe the 17 SDGs and underlying targets provide a
useful tool for companies and investors to be able to contributeto achieving the ambitious blueprint referenced above.
The framework has created a common language between
stakeholders, and we are seeing that having a positive impact
within our engagement. Our engagement database includes the
169 SDG targets, all related to the 17 SDGs, which allows us to6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurancelog interactions, progress and results to this granular level where
relevant. The main exception to this is our corporate governanceengagement, which we do not map to the SDGs (with exception ofboard diversity, which is mapped to SDG 5 and relevant targets).

Robust implementation of sustainability
strategies and meaningful and lastingchange is imperative

Alignment breakdown
SDG 2: Zero Hunger

0.7%

No targets were >0.5% aligned

SDG 3: Good Health and Well-Being
3.8

No targets were more than 0.5% aligned

4.0%

12.5%

5.1	End all forms of discrimination against
women and girls

10.0%

Ensure full equality of opportunity for
women, including at leadership levels

2.5%

SDG 6: Clean Water & Sanitation
6.3

Improve water quality by reducing pollution

SDG 7: Affordable and Clean Energy

1.5%
0.7%

1.5%

19.3%

12.2

 ustainably manage and make efficientS
use of natural resources

1.4%

12.4

Manage chemical usage and waste throughout
their life cycle

1.2%

12.5

Reduce waste through prevention, reduction,
recycling and reuse

1.7%

12.6

Encourage companies to adopt sustainable
practices and enhance ESG reporting

14.9%

4.6%

SDG 5: Gender Equality

5.5

SDG 12: Responsible Consumption
and Production

SDG 13: Climate Action
13.1
13.2

22.8%

 trengthen adaptive capacity to
Sclimate-related events

2.5%

Integrate climate change plans into policies
and strategies

19.9%

Double the global rate of improvement inenergy efficiency

1.1%

SDG 8: Decent Work and Economic Growth

15.7%

8.2

Achieve greater productivity through innovation

0.9%

8.5

Achieve full and productive employment for all

3.7%

SDG 15: Life on Land

5.5%

8.7

Eradicate forced labour, modern slavery & humantrafficking

8.1%

15.1	Ensure sustainable usage of terrestrial
freshwater ecosystems

0.8%

8.8	Protect and promote safe working environments
for all workers

2.8%

7.3

SDG 9: Industry, Innovation and Infrastructure

2.0%

9.1

Develop resilient and sustainable infrastructure

0.6%

9.4

Upgrade and retrofit industries toincrease sustainability

SDG 10: Reduced Inequalities

1.4%

1.1%

SDG 11: Sustainable Cities and Communities

0.9%

No targets were >0.5% aligned

14.1

Prevent and reduce marine pollution of all kinds

1.1%
0.9%

15.2

Promote the implementation of sustainable
management of forests

1.8%

15.5

Take urgent action to reduce degradation ofnatural habitats

2.9%

SDG 16: Peace, Justice and Strong Institutions

1.7%

16.6

Develop effective, accountable andtransparent institutions

1.0%

2.0%

Empower and promote inclusivity for all

10.2

SDG 14: Life Below Water

Source: Columbia Threadneedle Investments, as at 31 December 2023. Only targets >0.5% aligned
are shown on the table.

33

Stewardship report 2023

23%

of our engagement linked to SDG 13:
	
Climate actionT he majority of this linked to target 13.2: Integrate
climate change plans into policies and strategies.
We continued to encourage companies to adopt orstrengthen their net zero strategies and manage theiremissions accordingly.

19%	of our engagement linked to SDG 12: Responsible
consumption and production
 imilar to last year, most of this engagement wasSlinked to target 12.6: Encourage companies to adopt
sustainable practices and enhance ESG reporting.
Examples include encouraging stronger climate
disclosures, such as the inclusion of Scope 3 emissions(recognising ongoing data challenges for many asset
classes/issuers), as well as enhancing employee
diversity and employee engagement disclosures.

16%

	of our engagement linked to SDG 8: Decent workand economic growth eflecting our focus on labour standards and humanRrights, a lot of this engagement was aligned with target
8.7: eradicate forced labour, modern slavery & humantrafficking. Particular examples include engaging boards
on forced labour and human rights in high-risk regions,as well as dialogue on approaches to supply chain risk
mitigation and human rights due diligence.

No SDG link
 % of our engagement did not directly link to a SDG.
8
Most of this relates to corporate governance, on topics
such as board independence and effectiveness, as well
as executive remuneration. Some of these engagements
were held in advance of or after AGMs, to either seek
further information to better inform our vote or to discuss
our voting rationale.

Collaborative
engagement
How we participate in collaborative engagement
As stated previously, our preferred approach to conducting
engagement is to interact one-to-one with issuers and maintaina relationship of trust over time as long-term investors. However,in certain instances RI analysts participate in collaborative
engagement with other investors and other stakeholders, either
directly or through industry working groups. This can canenhance our stewardship of client capital by allowing
investors to communicate their concerns more effectively
with corporate management. Furthermore, working together
with industry bodies to promote a well-functioning financial
system benefits our clients, society as a whole and is afundamental responsibility of financial institutions. We
consider any offers to collaborate on a case-by-case basis,
assessing the relevance for our holdings and how involvement
could be additive to our investment analysis, as well as if it is in
the best interests of our clients. We will not collaborate with third
parties if their approach or agenda for engagement is not alignedwith ours. A list of our key RI memberships and affiliations
is shown in Chapter 610.
During 2023, only engagement conducted by the RI teamcan be broken down to report how much was done collaboratively.
In 2023, this was 16%.

10
When undertaking any collaborative engagement activity, we ensure that we act at all times in accordance with the requirements of competition law, including but without limitation, prohibitions on
concerted practices between firms as set out in an addendum to our engagement policy.

341 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs

Examples of collaborative engagement conducted by RI
analysts in 2023

Climate Action 100+Volkswagen AG
Consumer discretionary
Germany

Background
Volkswagen (VW) is the largest automotive company globally, withsignificant influence on automotive climate policy, especially inEurope. However, VW has been reluctant to provide investors withmore transparency on its positioning on public policies, and its
lobbying on climate related policies directly and through industry
associations compared with peers. This lack of transparency isespecially concerning given the role that the Porsche CEO and
Volkswagen Chairman played in successfully advocating for an
e-fuel exemption in the EU’s 2035 combustion engine ban.

We consider any offers to collaborate
on a case-by-case basis

6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

ActionRI analysts have engaged VW bilaterally and collaboratively
through CA100+ on this topic since 2019. More recently,
they reviewed early drafts of VW’s lobbying disclosures andengaged to clearly articulate our expectations and encouragethem to publish the report well in advance of the AGM. As
VW could not commit to publishing the report before theAGM, and we have experienced them over-promising in
the past, we escalated our engagement by voting against
several items on the company’s ballot, including the Actionsof the Board of Management, Actions of the members of
the Supervisory Board and Re-election of members of theSupervisory Board.

Verdict
Although VW did in fact publish its Association Climate
Review 2023 immediately prior to the AGM, it was past thedeadline set and given the timing we did not alter our voting
decision. This report is the joint-highest rated automotive
company lobbying report assessed by InfluenceMap (theclimate-lobbying focused NGO). We welcomed this reportand believe that our close work with VW’s external affairs
team delivered a marked improvement in its quality. Although
VW has a particularly advanced method to assess industry
association alignment vs its peers, we have still identified
several areas for improvement, and appraising more industry
associations and rating associations on their activities(rather than stated positions). We will continue engaging withthe company to secure these improvements.

35

Stewardship report 2023

FAIRR Working Conditions Initiative

Cranswick
Consumer staples
United Kingdom

Background
Cranswick is a UK-based producer of food products that has
made positive strides in improving working conditions andhuman capital management through strengthening workforce
engagement.

that additional support is provided to workers when sick. They
have recently instated a new independent board director who
has begun a site tour, conducting townhalls as well as group andindividual workers interviews to deepen workforce dialogue. We
look forward to a discussion on the analysis and implementationof any findings.

Asia Research and Engagement

Mitsubishi UFJ Financial Group
Financials
Japan

ActionAs part of the FAIRR Working Conditions Initiative, during2023, RI analysts led a collaborative engagement focusing on
Cranswick’s grievance mechanisms and workforce survey; its
approach to automation; and the implementation of sick pay
across the business. They requested information on the typeof assessments of sick leave policies to understand if it wasof sufficient depth to assess the efficacy of the policies. On
automation, they were encouraged to learn that the processof semi-automation of heavier work on the production line has
enabled an expansion of the work pool, with the proportion of
women increasing given the less physically demanding natureof the work. RI analysts also encouraged increased employee
support during the cost-of-living crisis and were pleased tonote the increased frequency of salary reviews and benefits.
The proportion of permanent workers has increased to 80%,
providing more financial security to staff.

Outcome
We believe that the oversight of human capital management
and implementation of policies is strong and labour market
attractiveness is carefully considered at Cranswick. The
company was receptive to our engagement and as a result is
looking to increase disclosure on workforce statistics suchas unionisation rates and grievance issues. Convincing thecompany to harmonise sick leave pay policies across thesites remains a challenge, but there is some reassurance inBackground
MUFG announced their Carbon Neutrality Declaration in 2021,
and became the first Japanese bank to join the Net Zero Banking
Alliance. In 2022, the company published a progress reportwhich included an updated fossil fuel lending policy prohibiting
financing to new thermal coal mining projects, a coal power
corporate financing phase out by 2040, and 2030 financed
emissions targets for the power and oil and gas sectors. Theseare positive steps, but we believe there are further areas for
improvement as they start to implement these commitments.

ActionRI analysts engaged MUFG several times in 2023 both individuallyand collaboratively through our involvement in the Asian Corporate
Governance Association and Asia Research & Engagement (ARE).
In April 2023, the company expanded its financed emissions
targets to cover commercial and residential real estate, shippingand steel, and expect 70% of their loan book to be covered bytargets by June 2024. They also noted that they will enhancetheir climate risk management and disclose more informationon their client engagement. We engaged to seek information on
their approach to setting financed emissions targets and theirfossil fuel lending policies, as well as the implementation ofthese targets.

OutcomeA list of our key RI memberships andaffiliations is shown in Chapter 6

36

MUFG have responded well to both our private and collaborative
engagements, improving their disclosure and climate risk
management policies. However, they do not currently havethermal coal mining phase-out or financed emissions targets,
which we will continue to engage with them on. They assess
their exposure to high transition risk sectors, as part of theirclimate risk management framework, and we will encouragethem to include an assessment of their clients’ managementof transition risk within this. RI analysts will also continue toengage with them on their environmental & social policy and risk
management framework.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

Escalation
How we escalate active ownership activities
Our equity and corporate credit escalation process leverages theunique rights available to holders of equity or corporate credit.
Voting rights generally apply to equities; therefore in instanceswhere we hold equity and credit of an issuer, we look to
escalate for the benefit of all our investments, including throughconsideration of votes cast. See Chapter 4 for more informationon the exercise of voting rights.
The following illustrates our approach to escalation for equities
and corporate credit (with voting action where applicable).
We seek to consistently apply our engagement and escalation
approach to corporate issuers regardless of their geographic
location or domicile market.
Escalation in other core public asset classes, aside from equities
and corporate credit, is more limited due to fewer options being
available to security holders. In those asset classes we would
apply our ownership rights, for example, through legal channels,
and/or divestment.

In considering engagement escalation strategies, eachquarter end, RI analysts make a case-by-case assessment ofprogress against the Objectives we have set for each issuer.
We also annually review the responsiveness of companies toour engagement. Both data points feed into the escalation
decision, and we escalate accordingly if we deem it appropriate
to do so.
In selecting an escalation strategy, we consider aspects suchas:n Our clients’ goals and preferences (which will determine
whether their holdings participate in any escalation
strategy)n The level of responsiveness of the issuer
n The materiality of the topic
n Whether the issue is best managed in a private or publicforum
n The period in which we would pragmatically expect changen Any inherent limitations or strategies for affecting change
within certain sectors, company structures or geographies,
such as the ability to file shareholder resolutions

Escalation activity by the RI team takes
place in collaboration with researchanalysts and portfolio managers

Escalation activity by the RI team takes place in collaboration
with research analysts and portfolio managers within our firm.
Where we do think it necessary to escalate our engagementin the best interests of our clients, we carefully consider whichroute to take on a case-by-case basis. See examples below.

Collaborative Engagement11: We generally prefer to11
Collaborative engagement is not exclusively used for escalation purposes but can also be used as standard engagement with other investors. Any collaborative engagement undertaken for escalation
purposes will always be taken in full compliance with the requirements of applicable law and/or regulation including, but without limitation, prohibitions on acting in concert with other parties.

381 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’
needs

engage issuers in private to enable honest, open, andfrank discussions to take place. However, we will support
collaboration with other investors if we deem it to be an
impactful engagement or escalation strategy to ultimately help
create and protect shareholder value. Given ownership of anissuer is often dispersed, collaborative engagement may berequired to give a shareholder’s voice weight to address issues
effectively at the issuer or industry level.

Example: RI analysts engaged with Huaneng PowerInternational on how they are managing the potential risk of
stranded assets in the context of the Chinese government’s
carbon reduction commitments, as well as their broader
decarbonisation journey. In 2023 we initially struggled togain access to this majority state-owned enterprise but
through our active involvement in local NGO Asia Research& Engagement’s Energy Transition Platform, we held acollaborative call in Q4 2023. After initial difficulties schedulingengagement, the collaborative call was very constructive inunderstanding the company’s broader goals and commitment
to decarbonisation. It was clear that they appear to be doing
more than they publicly disclose, with their highlighting theirambition to become a clean energy provider. As a state-owned
company, their decarbonisation efforts will be highly dictatedby government policy. While they took on some suggestions
to enhance the disclosure of their existing efforts and their
management of climate-related risks, they highlighted that
additional disclosure would likely be dependent on further
regulatory requirements and guidance. We will consider further
collaborative engagements with the company on this issue.
Public statements: For both equity and corporate credit,
escalation issuing a public statement outlining disagreementwith management’s approach and setting out ESG bestpractices that we would encourage management to implement
is an additional escalation option.
We do not have 2023 examples of issuing or signing a publicstatement as a direct means of engagement escalation.
However, during the year, we signed public statements without
them being an escalation. One of the signed statements
was the Investor Statement for the 10th Anniversary of Rana
Plaza from the Interfaith Centre on Corporate Responsibility(ICCR) – a coalition of 300+ global investors using shareholder
advocacy to encourage companies to improve their
management of ESG issues. The investor statement called forthe expansion of the International Accord model to Pakistan
to improve worker safety protections following the signing of
the International Accord for Health and Safety in the Textile
and Garment Industry by 194 brands in 2021. The statement
called on apparel companies sourcing from Bangladesh andPakistan to strengthen their implementation of human rights
due diligence to effectively embed their corporate responsibility
to respect human rights.

Filing shareholder resolutions: Filing an equity or bondholder
resolution can be a key rallying point of an engagement

6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

campaign to change issuers’ behaviour with the aim of helping
to drive creation of shareholder value. Examples might include
improving board accountability, executive pay practices, ESGrelated disclosure, climate change action or employee welfare.
While we did not independently file any shareholder resolutions
as a means of engagement escalation in 2023, we did supporta shareholder resolution at Starbucks’s 2023 AGM, asking
the company to commission an independent review of its
policies and practices relating to freedom of association andcollective bargaining. In our view we had exhausted our optionsof engagement with Starbucks on the issue, and therefore
chose to support the shareholder resolution as a means ofescalation. A majority of shareholders supported the resolution,and in response, Starbucks engaged an independent assessor
to investigate their practices and deliver an impartial report.
The report concluded that while Starbucks had no intention tobreach the principles of freedom of association and the rightto collective bargaining, there are things the company can andshould do to improve its stated commitments and its adherence
to these important principles.

Annual General Meetings (AGMs): Requesting a shareholder
meeting or intervening at an AGM offer the opportunity for direct,
public dialogue with boards and top executives. Interventions at
AGMs can also trigger further dialogue with an issuer, paving theway to more in-depth engagement on an issue. We do not haveany examples of this for 2023.

Proxy voting: Voting against management on key resolutions
sends a clear signal to issuers and can help with further
engagement efforts. Examples of votes against management
can be found in Chapter 4, as well as in links to our public
voting disclosure.

Partial or complete divestment: Where appropriate for client
portfolios taking into account they will have differing investment
goals, re-weighting a position to reflect the investment riskof poor ESG practices or selling outright a holding can be a
powerful signal of dissatisfaction in response to inadequate
progress against Objectives set in collaboration of RI analysts,
research analysts, and portfolio managers.
Example: As part of our RI engagement with Dali Foods Group
together with Asia Research & Engagement on sustainable
proteins, an RI analysts and member of the Global Equities teamspoke to the investor relations director to present that initiative
and to seek more information on traceability of raw materials,
climate change strategy, and disclosure. We commended
the company on its first reporting to CDP (formerly: Carbon
Disclosure Project) on climate and water, recognising the datagathering and reporting efforts. However, they did not receive
clarity on the roadmap for environmental and climate work. A
recurring theme was the reference to lack of resources, echoing
previous calls. In addition, board oversight appears to belacking, raising questions about overall direction. Disappointing
progress here was a contributing factor in the Global Equities’
team decision to divest.

39

Stewardship report 2023

CHAPTER 4

Voting andcorporate governanceGood corporate governance is at the heart of any successful
business, instrumental in supporting the delivery of strategic
objectives and in driving sustainable performance, as well as
maintaining legal requirements and ethical standing.

Over the past decade or more, we have supported
the development of corporate governance codes byinternational investor associations and local market
bodies, with best practice guidance for companies
on key governance topics, from board composition toshareholder rights.
The Columbia Threadneedle Investments Corporate
Governance Guidelines cover these topics for
portfolios managed by Columbia Threadneedle
Investments for its clients, help crystallise our global
stewardship philosophy and underpin our approachto voting at the shareholder meetings of our investee
companies. We implemented these guidelines along
a newly harmonised process – which is outlined in

our Proxy Voting Policy, which was published in
January 2023 and updated in January 2024.

We expect companies to have:n Empowered and effective board and management
structuresn Effective systems of internal control and risk
managementn Commitment towards creating a culture oftransparency and accountability and soundbusiness ethics
n Remuneration policies that reward the creation of
long-term shareholder valuen Systems to identify, assess and manage risks,
including those associated with social andenvironmental factors

In January 2023 wepublished our global,
harmonised Proxy
Voting Policy

40

We seek to exercise voting rights on our clients’behalf at all shareholder meetings associated with theholdings of the investment mandates we manage. This
provides the opportunity to promote good practice atissuers, or express our concerns identified throughresearch and engagement, including when escalation
becomes necessary (see Chapter 3).
We believe that voting is an impactful tool for driving
improvement in company practices and market
standards, as well as for re-enforcing Objectives set
in RI engagement. We explain our understanding of1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

good governance and our approach to voting to our key investee
companies. We believe our approach increases the potential togenerate better long-term, risk adjusted returns for our clients.
While we aim to exercise voting rights on all securities we manage
for clients, that may not always be practical due to marketspecific reasons such as share blocking or power of attorneyrequirements.

Disclosure
We are committed to transparency in our voting activity. We
publish our full voting record with rationales for proposals
where we did not support management, among others. Our
disclosures list the issuer name, meeting date, proposal nameand how we cast the vote. All votes cast against management areaccompanied by a short-form rationale for the dissent.
Different legal entities currently disclose voting activity separately
at different intervals:n Columbia Management Investment Advisers (CMIA)n Columbia Threadneedle Management Limited (CTML) and
Threadneedle Asset Management Limited (TAML)

Custom policy
Our Corporate Governance Guidelines form the basis of ourcustom voting policy. The principles describe our views on key
ESG issues used to inform our monitoring and assessment ofissuers and support the approach we use to make our voting
decisions consistently across the firm. We follow internal
regional voting policy benchmarks to adhere to local norms andregulations.
Together with our internal research insights, this provides theframework within which custom voting policy recommendations
are applied, and to flag issues and inform discussions between
our RI analysts, research analysts, and portfolio managers making
the voting decisions.

Amendments to custom policy
Each year our proxy voting and corporate governance analysts
lead a review of our custom voting policy, with a view to updating,where necessary, the principles that form the basis of our custom
policy.

We believe that voting is an
impactful tool for driving
improvement in company practices
and market standards

42

The custom policy review is informed by multiple inputs,
including:(i) regulatory changes, (ii) voting trends or voting results, (iii)
observations from our experience researching issues andimplementing votes, (iv) commentary from portfolio managers
and analysts, and (v) feedback from clients.
Subject to any escalations as discussed below, final voting
decisions are made under a process informed by: (i) our custom
voting policy, (ii) prior research and engagements, (iii) our voting
watchlists, and (iv) our proxy voting and corporate governanceanalysts working in collaboration with portfolio managers andresearch analysts. Our proxy voting and corporate governanceanalysts, who are part of the wider RI team, serve as the central
point of oversight of all votes cast and have responsibility forthe implementation of our custom voting policy, including any
matters requiring escalation as detailed below.
We use a risk-based approach to execute voting rights on behalfof our clients while delivering comprehensive coverage of a wide
portfolio of stocks.
Portfolio managers hold final vote authority regardless of issues
to be voted on, holdings size, or the market in which votes will
be cast (as outlined below acting through engagement with
our proxy voting and corporate governance analysts and, if
necessary, through their representatives on the Proxy Voting
Working Group (PWG)).
Our proxy voting and corporate governance analysts review more
complex and sensitive cases, and partner with ISS to deliver
voting on the more simple, routine votes through the applicationof detailed in-house voting policies based on the Corporate
Governance Guidelines.
The subset of votes we review manually is typically around
20% of total votes cast. Given the introduction of our new
harmonised, integrated proxy voting policy and corporate
governance guidelines in 2023, we reviewed – out of caution -approximately 30% of the votes cast manually.
The corporate governance and proxy voting analysts liaise withportfolio managers and analysts to determine an appropriate
vote and coordinate voting decisions where an issuer is held
across various investment teams. Split votes where determined
necessary to align with differences in client demands andinvestment policies are possible, but were very rare in 2023.
For matters of escalation and where no consensus can bereached between portfolio managers and the corporate
governance and proxy voting analyst for a specific vote, cases
can be escalated to the PWG which includes portfolio manager
and RI team representation.
In 2023, there were 18 escalations to the PWG on a proposal
level, covering 14 different companies.
The proxy voting and corporate governance analysts castvotes on a proxy voting platform hosted by ISS. In addition,1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance

we have retained proxy advisory firms Glass, Lewis & Co.,
Institutional Voting Information Service (IVIS) (in the UK) andISS to provide proxy research services and context, data anddiffering perspectives on voting matters. Our firm undertakes
due diligence and regular monitoring of our third-party service
providers, as detailed in Chapter 7.
To supplement our internal research and proxy advisor
research, we may also use additional research from nongovernmental organisations, industry associations, academic
institutions, or brokers.
The proxy voting system is used to identify forthcoming
company meetings, based on the receipt of ballots from
custodians. From this an automated log is compiled ofupcoming outstanding votes which is used to verify that all
requested voting decisions are inputted to the proxy voting
system in time for them to be communicated to the custodian/investee company and registered at company meetings.

5 M
 eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

To assist in accommodating variances in our approachto a specific issuer, region, sector or bespoke list ofcompanies (often as a result of engagement), we are able
to use watchlists loaded onto the voting platform to flag ameeting of importance. These allow us to systematically flag
various issues for different funds, regions or geographies
as considered necessary. Issuers flagged on a watchlist
undergo additional analysis by our RI analysts, who makevoting recommendations to portfolio managers andresearch analysts.
We also include issuers forming part of our RI engagement
projects within our priority watchlists.
The above voting guidelines are applied to all shareholder
meetings outside of our Conflicts of Interest Policy. ISS voting
policy and recommendations are applied to meetings where
we are deemed to be conflicted. Please see Chapter 8 forfurther details.

43

Stewardship report 2023

How we voted in 2023

7,046Management and shareholder proposals voted:*

Management-sponsoredproposals

Shareholder-sponsoredproposals

76,17374,646
81% For

1,572
52% For16%

E proposals

S proposal

G proposals

219
44%

523
72%

75,301
84%

Company meetings voted*

	Total proposals voted*

Votes against management

Source: Columbia Threadneedle Investments, as at 31 December 2023.
*For these figures we sought independent limited assurance from KPMG LLP. See p92 formore details. Please refer to our Reporting Criteria document for our approach to theclassification, calculation and reporting of stewardship data.

We also counted 130 votes that were a mix of ESG issues, thatcannot be categorised into the E, S or G groups. Of these, we
voted 42% in favour of the proposal.

Voting activity by topic

Voting activity by region

60

50

55%

50

46%

40

40

30

30

20%

20
15%

11%

10%
2%
Emerging
markets

UnitedKingdom

Japan

APAC
ex Japan0

Source for all data: Columbia Threadneedle Investments, as at 31 December 2023. Rounding may result in chart figures not equaling 100%.

44

6%

4%

North America

Anti-takeover

1%

Audit

Capitalisation

Remuneration

Director

Reorganisationand Mergers

1%

0

10

7%

Latin America

8%10Europe ex UK

14%

Other

20

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs

Voting in fixed income
Bondholder meetings are less frequent in comparison toshareholder meetings but are often the result of a significant
corporate event, such as restructurings and reorganisations ofissuers’ capital structures.
We believe that active consideration of creditors’ interests inengagement helps investors to address the issue of shorttermism. Namely, by taking a “universal investor” approach toan issuer that encompasses both debt and equity perspectives,
unduly risky behaviour that promotes short term gains
for shareholders – at the expense of creditors – might bediscouraged. At the same time, investors should encourage amore balanced, sustainable corporate strategy and financial policythat is better positioned to stand the test of time.
Therefore, in our engagement as a bondholder, we foremost
encourage companies to manage these risks actively to protect
their underlying credit quality and financial strength.
We will vote bondholder meetings if the portfolio manager
considers it to be appropriate to do so. The opportunity forinvestors to meet issuers around new issuance also gives someleverage for engagement. During 2023 there were 107 voting
proposals for 18 corporate credit issuers on which we either
provided consent or exercised voting rights as bondholders of
securities held in our corporate investment grade or high yield
portfolios, and we were supportive of the proposed actions on all
proposals.

Voting in multi-asset
Our multi-asset business largely invests in underlying Columbia
Threadneedle Investments equity and fixed income products, aswell as equity and fixed income securities, and alternatives, allof which reflect to differing degrees our approach to integrating
active ownership. For investments in externally managed funds,
we exercise ownership rights through our operational due
diligence activities during the selection phase, which includes a6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurancequestionnaire on ESG governance, strategy, implementation andreporting. Where applicable, we apply our Columbia Threadneedle
proxy voting policy.

Voting in other asset classes
In 2023 we did not cast any votes in respect of assets held in
non-corporate asset classes.

Client-directed voting
Voting in segregated accounts is governed by the terms of clients’investment management agreements. In nearly all instances,clients vest voting authority with us, although some may reserve
the right to withdraw delegation of proxy voting authority andinstead direct a vote in limited circumstances (including anoverride of our custom policy). In certain instances, clients may
wish to retain voting authority on all matters.
We vote all shares in pooled funds and do not presently have amechanism to gather input and efficiently vote in accordance withindividual shareholder’s wishes. We believe clarity on industry
standards of practice applicable to a shareholder ‘expression ofwish’ is necessary to facilitate the evolution of market practice.
We will, therefore, continue to engage with vendors and theinvestor community to seek to develop standards, guidelines, andbest practices to facilitate progress across the industry.

Managing stock lending/recalls for voting
During 2023, we undertook stock lending activities on one
particular group of funds we manage, but this is not widelypracticed across our business. Clients may also participate instock lending programmes in segregated mandates. Where clientsprovide for it, and upon their request, we may engage with themto seek the recall of stock loaned out for proxy voting purposes.
There were no client-directed stock recalls during 2023.

45

Stewardship report 2023

Significant votes and outcomes and the Shareholder
Rights Directive II
Below are some examples of our votes and their outcomes
during 2023. We have sought to provide votes with arepresentative balance of outcomes, recognising that many do
not result in optimal outcomes despite our best efforts.

expectations, and hear more about how the company plans to
respond to shareholder engagement ahead of the 2024 annual
meeting.

Wizz Air Holdings Plc
Consumer discretionary

Our methodology for selection is based on characteristics
of our global voting universe, including aggregate size ofholdings in the company, number of clients holding the stock,significance of the voting issue for a company or in the relevantmarket, impact on shareholder value and materiality of the voteto engagement outcomes.

United Kingdom

We have also tracked the outcomes of these votes (where
possible, detailed below) and have found that in most
instances, the issues we had identified also represented aconcern for many other investors. Across these meetingsand other high votes against management in our portfolio(for example, over 20%), we expect companies to engage
with investors and disclose how they are addressing theconcerns raised.

had concerns regarding the excessive quantum, among others,
despite a material decrease in the share price.

AGM date: 2 August 2023
Vote matter: Remuneration Report & Remuneration Policy.
How we voted: We voted against the remuneration report as we

Outcome: The remuneration report and policy received 31%
and 28% dissent respectively which signals notable disapproval
from shareholders. We will further focus on the company as
2024 progresses.

Brenntag SE
Materials

Broadcom Inc

Germany

Technology
United States

AGM date: 3 April 2023
Vote matter: Advisory vote to ratify named executive officers’
compensation.

How we voted: We voted against the say-on-pay as we hadconcerns regarding the timing and quantum of the equity grants
to the CEO, which was further exacerbated by continued concerns
regarding the lack of concrete succession planning and key
person risk.

Outcome: The say-on-pay vote did not pass and we have had
continued engagement with the chair of the compensationcommittee at Broadcom to discuss the pay result, our votes andPortfolio managers hold final voteauthority regardless of issues to bevoted on, holdings size, or the market
in which votes will be cast46

AGM date: 15 June 2023
Vote matter: Election of Richard Ridinger and Sujatha
Chandrasekaran to the Supervisory Board.
How we voted: An activist had proposed counter proposals to thetwo directors in place. We abstained from voting for the current
directors. This was due to engagements with both the company
and the activist investor. We were happy with both levels of
experience of the directors and the counter directors but wanted
to support an increase in corporate governance standards.

Outcome: The directors Richard Ridinger and Sujatha
Chandrasekaran received a 37% and 38% dissent against themsignalling the shareholder disapproval. We watch for improved
governance practices and execution of the business strategy
over 2024.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

CHAPTER 5

Meeting our clients’ needs
Institutional
Retail

47%
53%

US$M
302
335

£M
237
263

€M
274
303

Columbia Threadneedle Investments is a global asset manager providing a broad
range of investment strategies and solutions for individual, institutional andcorporate clients around the world. With more than 2,500 people, including over
650 investment professionals based in North America, Europe and Asia, we manage
USassets across developed and emerging market equities, fixed income, asset
UK
Europe (ex UK)
allocation solutions, and alternatives.
Global

US$M

£M

€M

33
18

26
14

30
17

60%
32%
3%
5%

US$MThreadneedle£M €M
As at 31 December 2023, Columbia
Equity Investments
51%
323 253 managed
293
Institutional47%
302 237 274
Fixed Income
37%
238 187 216
Retail53%
335 263 303
US$637bn / €577bn / £500bn
of assets.
Money Market
4%
24
19
22
Alternative
Hybrid and Other

5%
3%

Discover the breakdown of our assets and clients:
AUM by client type (%)

AUM by asset class (%)
Institutional
Retail

US$M
47%
302
53%
335

£M
237
263

€M
274
303

US
UK
Europe (ex UK)
Global

US$M
302
335

£M
237
263

€M
274
303

US$M
323
238
24
33
18

AUM by investment deskregion (%)

AUM by client region (%)

£M
253
187
19
26
14

60%
32%
3%
5%

US$M
384
202
20
32

£M
301
158
16
25

€M
348
183
18
29

€M
293
216
22
30
17

US$M £M €M
US$M £M €M
Africa0%
1 807 932US60%
384 301 348
APAC ex Japan
1%
8
6
7
UK
32%
202 158 183
Canada0%3
23Europe (ex UK)
3%
20
16
18
Europe ex UK
10%
66
52
60
Global
5%
32
25
29
Japan
0%
2
2
2
Latin America
8%
57
44
51
Middle East
2%
12 10
11
UK
21%
142 111 129US58%
402 315 364
US$M £M €M
Equity51%
323 253 293
Fixed Income
37%
238 187 216£M
Moneywe
Market4% external
24 €M19
As at the 31 December 2023 close of the reporting period,
hadUS$M54
reo® 22clients with $1.0trn / £796bn / €919bn assets
US
384
Alternative60%
5% 30133 34826
30
under engagement.12
UK
Hybrid and32%
Other 202
3% 15818 1831417Europe (ex UK)
3%
20
16
18
Client focus is one of our core values as outlined inGlobal
Chapter 1. We
identify
andunderstandour clients’ unique and diverse needs,
5%
32
25
29
Institutional
Retail47%
53%

Equity51%
Fixed Income
37%
Money Market
4%
Alternative5%
Hybrid and Other 3%

providing them with the necessary attention and resources, as well as investment strategies and structures that meet their needs.

Source for all figures: Columbia Threadneedle Investments, as at 31 December 2023. Columbia Threadneedle Investments is the global band name of the group of companies that together make up theasset management business of Ameriprise Financial, Inc. It includes Pyrford International, which submits its own Stewardship Report to the Financial Reporting Council.
12

Subsequent client exits US$M
during Q1 £M
2024 has€M resulted in a new total of 51 external reo® clients as at 31 March 2024, which will affect assets under engagement reported for the quarter.

Equity51%
Fixed Income
37%
Money Market
4%
5%
48Alternative
Hybrid and Other 3%

323
238
24
33
18

253
187
19
26
14

293
216
22
30
17

AfricaAPAC ex Japan
CanadaEurope ex UK
Japan

0%
1%
0%
10%
0%

US$M
1
8
3
66
2

£M
807
6
2
52
2

€M
932
7
3
60
2

US$M
384
202
20
32

£M
301
158
16
25

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

Aligning our investment and RI engagement time horizons with clients’ goals
As stated in Chapter 2, investment teams operate with ahigh degree of autonomy in developing their own investment
approach. This enables us to accommodate a wide range
of investment styles and offer our clients a diverse set ofstrategies that invest over different time horizons to meettheir desired investment goals. For various fundamental
bottom-up strategies, investment teams look to invest
in quality companies and hold them over the long term,
resulting in an investment horizon of at least three to five
years and some securities are held in the portfolio for 10

Engagement● Initiatedengagement.
Key ask was toimprove carbon
emissionsmanagement
and reporting.

2008● Expanded
engagement toincludeanti-bribery andcorruption issues.

● Initiateddialogue on board
effectiveness andindependence.

● Initiated dialogue
on data privacy
and security
issues.
● Continued our
engagement onboard
effectiveness.

2011

2015

2016

Milestones

Source: Columbia Threadneedle Investments, as at 31 December 2023

50

● Continued engagement ondata privacy and security.
● Continued our dialogue on
board composition.
● Re-initiated engagement
on environmental
management issues;carbon emissions, energy
and water efﬁciency.

2017

2018

● Developed andpublished ananti-fraud andwhistleblowing
policy that calls forzero tolerance inrelation to corrupt or
fraudulent activities.

● Improvements
in data privacy
and security
management
systems.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs

years or more. We monitor and engage investee companies
on an ongoing basis during the holding and coverage period,
and update our investment thesis accordingly. This includes
engagement on risks related to ESG factors that could havea material negative impact on a company’s performance and,● 2021 Targets:● Continued engagement
on board compositionand effectiveness.

6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

where necessary, encouraging improvement in management
practices that we believe could help drive financial returns forour clients. As an example, the below shows our long-term RI
engagement with Tencent during its 2010-2023 holding period
in one of our funds.

● 2022 Targets:

Initiate dialogue on board
diversity, external auditor
tenure, product quality
and safety and Net Zerotargets.

Engage to encourage diversity &inclusion targets, improved employee
engagement reporting, improved
oversight process of subsidiaries,
and grievance mechanism reporting.

● Initiated dialogue on
board refreshment,
auditor external auditor
tenure, net zero targets,anti-trust andresponsible marketing.

● Initiated dialogue on human capitalmanagement, diversity & inclusion,
governance and Russia.
● Initiated dialogue on ethical artiﬁcial
intelligence.
● Continued engagement on net zerotargets.
● Continued engagement on data
privacy.

● 2023 Targets:
Engage to improve workplace disclosure,set diversity & inclusion targets, improveoversight of subsidiaries, improveboard effectiveness and diversity.
● Initiated dialogue on human rights● Initiated dialogue on gaming● Continued dialogue on diversity& inclusion● Continued dialogue on data privacy& security● Continued dialogue on board
effectiveness● Continued dialogue on responsible
AI/AI governance● Continued dialogue on human capitalmanagement

2019

2020

2021

2022

2023

● Assigned responsibility
for ESG oversight to theboard.
● New independent
director appointed.
● Revamped approach to
IT security.

● Improved disclosure on
the data privacy ofusers.
● Responded to the CDP
climate change
questionnaire.

● Responded to the CDP
climate change
questionnaire.
● Announced a net zerocommitment.
● Set and publishedenvironmental KPIs.

● Improved
climate-related
disclosures.

● Improved
gender diversity andindependence ratio on
the board.

51

Stewardship report 2023

Client engagement
As part of account setup and onboarding, our dedicatedrelationship management teams build close client
relationships to understand specific investment goals,
objectives and risk tolerances, which helps to develop an
investment and portfolio transition plan in conjunction withthe portfolio management and operational teams. These
goals, objectives and risk tolerances may also relate to ESG
and stewardship matters. Ongoing relationship meetings,
mandate/portfolio review meetings and consultant/intermediary due diligence reviews allow us to communicate
with clients directly, providing them with important updates,
views on market developments and asset allocation trends,
as well as seeking their views. For many of our clients,
ESG and stewardship themes will form part of our ongoing
discussions with our distribution teams, and investment and
RI professionals.
Recognising that many of our institutional clients rely on
input from their consultants, we have a dedicated consultant
relations team working in conjunction with our relationshipmanagers. Our engagement with consultants and clientson ESG matters may manifest itself in a number of ways
depending on their specific preferences:
n ESG-focused meetings.
n Data requests on stewardship activity and sustainability
metrics.
n Regular reporting on engagement and voting (most client

52

updates include engagement activity information). This
includes following industry templates where they exist,
such as the Pensions and Lifetime Savings Association’sand Investment Consultants Sustainability Working Group’s
templates in the UK. Some clients receive, upon request
and on an ad-hoc basis additional information, on areas
such as ESG integration in investment portfolios, and net
zero methodologies and implementation.
n We regularly share our thematic insights on a variety of ESG
topics with clients.
Consultant feedback is shared and discussed between relevant
teams, and any perceived shortcomings of our policies andapproaches addressed.
Fund policies and approaches are reviewed and discussed withfund boards. During 2023, topics reviewed and discussed withfund boards continued to include our RI policies, committing
certain of our European domiciled funds to align with our net
zero methodology and the labelling of certain European funds
under EU SFDR. As part of our annual proxy season strategy
post-mortem, we developed and proffered a series of voting
policy amendments to several internal funds boards for theirapproval. Such amendments included refinements to director
election assessments (e.g., defining independence andoverboarding) and executive compensation analyses following
client and other key stakeholder feedback. We were pleased toreceive approval by fund boards for each of the amendments.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Client events
Our RI conference
In November 2023 we hosted our Responsible Investment
Conference, attended by clients mostly based in the UK
and Europe. The focus of the event was on how we invest
on behalf of our clients in a transitioning world. Topics on
the agenda included perspectives from the Global Headof RI, on 20 years of working in the RI space; a panel ofinternal and external experts on social issues; and hearing
directly from our investee companies Smurfit Kappa andMarks & Spencer about their RI journeys and perspectives
on investor engagement. Breakout sessions included the
UK regulatory backdrop, biodiversity, and portfolio managerled sessions on our responsible & sustainable strategies.

Our Dutch RI seminar300+

client meetings attended by RI teammembers during 2023

External consultation
We also consult our clients for their input on preferences
for priority ESG issues for RI engagement. This includes ourbiannual client consultation process with our reo® clients todiscuss and agree shared thematic priorities and objectives.
These client views are typically representative of broader industry
trends and concerns. Further prioritisation of RI engagement
is driven by an assessment of materiality across the holdings
and issues identified in the funds of our managed asset clients,
alongside those identified within the funds of reo® clients.
We can also consult our Responsible Investment Advisory
Council (RIAC), which comprises five external sustainability
experts (including one who retired from Columbia Threadneedle
Investments in March 2023) and an internal member. Moreinformation about RIAC can be found on p76. Following internaland external – including reo® clients – consultations in 2023,
we identified six existing RI engagement projects and four new
projects which will be pursued in 2024, covering a wide range ofengagement issues, sectors and companies.

In June 2023, we held our annual Dutch RI seminar in
Amsterdam, which focused on the ‘S’ in ESG. The event
was attended by c.50 clients and other contacts. The
seminar was interactive, with presentations, interviews,
and engaging podium discussions. An RI analyst
discussed how we work on mitigating social risk throughactive ownership, with a focus on labour standards andhuman rights. A senior portfolio manager on our Social
Bond fund range explained how we generate positive social
impact. The audience also heard from Impact Investor – aventure capital impact investor – on the systemic social
risks in production chains and what companies and theirfinanciers can do about it, and from the Head of Impact
at Tony’s Chocolonely, on the company’s mission to
tackle the problem of child and slave labour in chocolate
production.

PRI in Person conference, Tokyo
In October 2023, we were one of the sponsors of the PRI
in Person conference. We also sponsored the Japanese
signatory meeting, where we presented on the energy
transition and our net zero work, and spoke in conference
sessions covering nature stewardship, engaging on humanrights, and labour standards. We hosted a client event withapproximately 40 fund & reo® clients from across the globe,
and also attended individual client and partner meetings;
a meeting with the Ministry of Finance; and various side
meetings at the conference, including with the Asia Investor
Group on Climate Change and the Asia Research andEngagement group.
Other events included hosting an investor briefing on
reducing conflict risk and webinars on deforestation andsupply chain due diligence in relation to labour standards.

53

Stewardship report 2023

Client communication
Reporting to clients in a transparent manner remains a highly important aspect of our RI capability.
Discover an overview of our content outputs during 2023:
Content

Description

Audience

Frequency

Stewardship ReportIn-depth information on our stewardship activity to satisfy global stewardshipcodes.

PublicAnnually

Responsible
Investment
Capabilities Brochure

A brochure used in client and prospect engagement. Showcases our high-level
RI capabilities, covering research, tools and frameworks, team resource andcoverage, engagement and proxy voting, public policy work, and relevant funds andstrategies.

PublicCreated as a oneoff brochure, to berefreshed as needed.

Stewardship Quarterly
Review

Outlines our RI engagement and voting activity during the quarter, including a
selection of engagement case studies.

PublicQuarterly

Engagement review
and outlook

A detailed review of the RI engagement projects run by RI analysts in the previous
year, and a detailed overview of the engagement projects running in the year
ahead.

Public andalso reo® client
versions that
contain further
information
on priority
companies

Annually

Climate change report

A report structured in line with Task Force on Climate Related Disclosures (TCFD)
recommendations that covers our governance of climate change; strategies to
identify and manage risk and opportunities across our investments; and our own
operational emissions, including a new emissions reduction goal.

PublicAnnually

Entity Level Principal
Adverse Impacts (PAI)statements

Disclosure statements, as directed by Sustainable Finance Disclosure Regulation(SFDR) on how we consider the PAIs of our investment decisions against a setof mandatory and voluntary indicators. Statements produced for CT Netherlands
B.V.; Threadneedle Management Luxembourg S.A.; and all entities in EMEA for
Columbia Threadneedle Investments.

PublicAnnually

Sustainable Finance
Disclosure Regulation(SFDR) disclosures

Applicable website, pre-contractual and periodic disclosure for Article 6, 8 and 9
products within scope of SFDR requirements.

PublicWebsite and precontractual: ad-hoc
Periodics: annual

Product-level TCFD
reports

Reports for many of our UK-domiciled funds and EMEA range. Contain climaterelated metrics such as carbon footprint, weighted average carbon intensity.
Additional information on net zero alignment is included for funds committed to
our Net Zero by 2050 goal.

PublicAnnual reports as at
31 December 2022
published in June
2023 as per the
Financial Conduct
Authority requirement.
Quarterly reporting
began in 2024.

541 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Content

Description

Audience

Frequency

Responsible
Investment reports

ESG metrics for funds in the legacy Threadneedle Asset Management Limited
range, such as ESG Materiality Rating, carbon footprint and controversies
exposure, as well as voting activity. Some reports include a brief commentary.

Relevantclients andconsultants

Quarterly

Impact reports

Annual reports for a selection of dedicated responsible and sustainable strategies
that demonstrate a fund’s ESG profile through sustainability metrics, SDG revenue
mapping, and active ownership details.

PublicAnnually

Real estate strategy
reports

Annual reports for a selection of dedicated responsible and sustainable strategies
that demonstrate a fund’s ESG impact through sustainability metrics, SDG revenue
mapping, and active ownership details.

PublicAnnually

Real estate ESG
reports

ESG reports for a selection of our real estate strategies, written in accordancewith regional disclosure recommendations. All contain strategy specific goals andprogress against these in the reporting year, as well as metrics on environmental
risk. Highlights are also shared in each entity’s Annual Report and Accounts.

Relevant clients

Annually

Voting disclosures

Disclosure of our voting decisions can be found on our website. Different legal
entities currently disclose voting activity separately at different intervals.

PublicUpdated the day after
each AGM

ESG Viewpoints

Thematic, sectoral or regional ESG research and analysis, with reference to our RI
engagement and voting efforts. We support some of these written pieces with ESG
Quickview videos as another form of content to support the piece.

Public; reo®
clients also
often receive
furtherconfidential
company
engagement
details.

Monthly

Thematic Insights

Thematic research pieces covering energy transition, human capital transition andfood and materials transition.

PublicQuarterly

Pioneer Perspectives

High-level content pieces, that typically cover the author’s perspective of a current
ESG issue, or ESG considerations of a topical issue.

PublicAd-hocWe recognise that client reporting around RI is an evolving
area, shaped by differing client expectations but also thedeveloping regulatory landscape and continued focus on
ensuring that statements on ESG practices reflect accurately

how asset managers actually operate. During 2023, we
continued to design and mobilise an operating model toexpand and improve our RI client reporting, with delivery
planned for 2024.

55

Stewardship report 2023

CHAPTER 6

Promotingwell-functioning
markets
As a large, global asset manager, we take seriously our
responsibility to promote a well-functioning financial system
and work collaboratively with others to improve how markets
function. In the long run, we believe that this benefits us in
our investment activities, our clients, and society.

Key market risks identified in 2023 included
high inflation and rising interest rates andthe associated cost of living crisis, as well as
geopolitical instability and conflict. Meanwhile, thefrequency of extreme weather events continued
to pose market-wide risks too. Systemic risks are
considered as part of strategic oversight of ourbusiness, by the Global Executive Group (GEG) andGlobal Business Group (GBG). More informationon our governance processes can be found in
Chapter 7.

Using RI engagement to address market
risks
Thematic analysts produce research and conduct
related engagement on three overarchingsustainability themes – energy transition, humancapital transition, and food and materials transition– to address material ESG risks with issuers. RI
analysts focus their engagement around seven
themes that drive our RI engagement programme,each of which we consider material to the creationand protection of long-term financial value, as well
as social and environmental value.

56

Climate change

Environmental stewardship

Public health

Labour standards

Human rights

Corporate governanceBusiness conduct1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

In 2023, RI analysts planned engagement priorities within these
themes across sectors and regions, addressing material risk
inherent in climate change, poor environmental stewardship andbiodiversity loss, human rights abuses or weak labour standards,
public health risks and weak corporate governance. They identified
sectors and companies most exposed to key issues withinthese themes and engaged independently or collaboratively
to seek improved management of the issues. This dialogue isreinforced with appropriate use of voting rights. Chapter 3 provides
information on RI engagement approach and examples, while
Chapter 4 provides information on our proxy voting approach andexamples of significant votes.
Climate change, biodiversity loss and conflict present significant
threats to markets, destabilising the environment and increasing
volatility in society. During 2023, we engaged companies exposed
to each of these issues, to understand potential impacts on theirvalue, and promote positive change and better-functioning markets:

Addressing climate change: 2023 saw some of the most
severe impacts yet of the changing climate, as El Nino conditions
overlaid on underlying climate trends led to new extremes ofweather in many parts of the world, with major economic andhuman costs. Climate change can have systemic impacts acrossthe economy and financial markets. The energy transition,
driven by government policies and technological advancements,
creates both opportunities and risks as the energy market
pivots to cleaner alternatives. As investors we manage therisks and opportunities related to climate change acrossour investments, and our own physical footprint, considering
our clients’ preferences. We consider existing and emerging
regulatory requirements, through joint work by our regulatory
and RI team climate specialists, as well as participation inindustry groups. Consistent with our objective to deliver longterm investment returns to clients, we engage with companies
on their energy transition and decarbonisation goals, which helps
us to understand how they are navigating these changes, and toencourage the adoption of robust, science-based strategies thatare viable for such companies to implement whilst sufficiently
addressing relevant risks and opportunities that could have afinancially material impact on the company. We engage both
one-on-one and collaboratively, where this aligns with our clientfocused objectives. RI engagement is aligned with our proxyvoting approach, where we seek to reflect our objectives in ourassessment of companies in material sectors, on which more
information can be found in Chapter 4. We will also engage with
policymakers, where appropriate and aligned to meet our clients’needs, to help promote policies which help mitigate, and/or adapt
to, climate change and ensure a smooth transition. As a signatory
to the NZAMI, achieving the goal of net zero emissions by 2050 orsooner with respect to our assets under management is subject
to direction by our clients on a portfolio-by-portfolio basis. Moreinformation on this is available in Chapter 2.
Protecting biodiversity: Dependency on nature is pervasive
throughout the global economy. We were part of the launchinginvestor group for Nature Action 100 in September 2023. This58

collaborative investor initiative will engage the companies withthe most material biodiversity impacts, and has already recruited
over 200 investor members. We will continue to help lead thisinitiative through our position on the Steering Committee andTechnical Advisory Group. 2023 has been a productive year forbiodiversity engagement. We published our Biodiversity Best
Practice Expectations, which will enable us to consistently
evaluate corporate targets, disclosures, governance and strategies
on biodiversity. We focused our biodiversity engagement oncompanies in high-impact sectors such as food and beverage,
extractives, materials and transportation, and reinforced our
engagement by continuing to implement a robust biodiversity
voting policy. Deforestation has been a clear focus area for us,
and in April 2023 we took part in an Investor Policy Dialogue
on Deforestation visit to Brazil to engage with the new Lulaadministration and push for reform. We continue to lead theInvestor Working Group for a Deforestation-Free Automotive
Industry, and work closely with NGOs including Rainforest
Foundation Norway, ZSL and Tropical Forest Alliance on this topic.

Active ownership in times of conflict: Navigating geopoliticaluncertainties remained an RI engagement theme throughout
2023. We saw increased global attention on geopolitical risk
ranging from Myanmar, Sudan, Russia/ Ukraine and Israel/
Gaza/West Bank. While these countries were not the only ones
impacted by ongoing geopolitical conflict, we focused on the areas
where we have the most exposure and, thus, the greatest investor
impact. We published an updated viewpoint in June 2023 where
we provided updates on our engagement efforts with investee
companies with ties to Conflict-Affected High-Risk Areas. We
monitored the industry impact of the war in Ukraine and provided
our insights of impacts across industries from agriculture,
consumer staples and discretionary, energy to technology andbanks. Following news reports about western semiconductors
being found in Russian missiles in the war against Ukraine,
we also reached out to several semiconductor companies tounderstand their approach to customer due diligence to ensure
its products do not end up in the wrong hands. We also hosted
an investor briefing on reducing conflict risk with the experts fromthe EIRIS Conflict Risk Network dedicated to knowledge-sharing,with the experts introducing their projects on Sudan, Myanmar andInvestor Commitments for Conflict. As geopolitical risks intersectwith ESG risks, we will continue to build on our engagementwith investee companies to understand how they are actively
assessing and mitigating the impacts of the conflict on their own
operations and supply chains, but also their part in the conflict.

Climate change, biodiversity loss andconflict present significant threats tomarkets, destabilising the environment
and increasing volatility in society1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Public policy
During 2023, we continued to play an active role inpublic policy development through engagement with
policy makers and regulators on key issues, seeking
to be a constructive investor voice in standard setting.

We predominantly engaged through industry bodies andcollaborative engagement initiatives. We believe that
this ultimately helps promote well-functioning financial
markets.

Country/
regionIssue

Initiative

Overview of the collaboration

Our involvement

Outcomes

GlobalLabourstandards

Workforce
Disclosure
Initiative

Aims to improve corporatetransparency and accountability
on workforce issues.
The initiative provides
companies and investors
with comprehensive andcomparable data on workforce
metrics.

We are long-term membersof the initiative, engaging withcompanies to report to WDI inorder to provide investors withimproved corporate disclosure
on management of operationaland supply chain workforce.

We provided input into thedevelopment of WDI's company
survey, including highlighting
methods to encourage increased
corporate participation in thereporting process as well as how
the survey could be made more
useful in company analysis andengagement for investors. This
resulted in an improved WDI
survey and increased reporting
uptake by companies.

UK

ClimatechangeUK
Sustainable
Investment
and Financeassociation(UKSIF)

Convenes multiple members of
the UK's sustainable financecommunity to enhance andpromote key issues andopportunites within the sector.

We provided input in to the
UKSIF's work on hydrogen
policy in the UK, by providing
our view on the barrierrs ofhydrogen development – under
Chatham House rules.

Hydrogen has the potential tobe an important solution in theenergy transition; acting as agreen energy carrier. However alack of clear policy and visibility
on regulation creates barrierrs
to fiancing and scaling of thetechnology. Our input in to
the UKSIF's work, including
highlighting the importance of
responsible sourcing and theneed for clear policy frames andincentives in order to support
indsutry transition, will feed into
the UKSIF review of the UK'shydrogen policies.

UK

Modernslavery

Find it, Fix it,
Prevent it

An investor collaboration
working to address forced
labour in global supply chains
and seeking meaningful,effective action by companies
in response to the Modern
Slavery Act.

We are members of CCLA's
Find it, fix it, prevent it investor
collaboration on modern
slavery which aims to highlightmodern slavery to issuersand drive improved risk
assessment, mitigation, andremedy as well as extended
disclosure.

As lead investor for two
companies, we provided updates
on engagement developments,aligning with our long-standing
engagement addressing modern
slavery risks and increasing
disclosure. We also provided
input into discussions aoundfuture coalition projects andreceived updates on relevant
developments on public policy.

TaiwanCorporate
Governance

Asia
Corporate
Governance
Association(ACGA)

An independent, non-profit
membership organisation
dedicated to working withinvestors, companies andregulators towards theimplementation of effective
corporate governance practices
throughout Asia.

Taiwan Depository & Clearing
Corporation (TDCC) is the only
virtual AGM platform provider
in the Taiwanese market but
it is not effectively equipped
to meet the needs of foreign
investors. ACGA's Taiwan
Research Director engaged with
TDCC on this topic with our
input and support.

A process will be implemented
that enables foreign investors toattend virtual AGMs. However,suggestions on enhancing
shareholder protection in the
consultation were not includedin the latest amendment to theregulation. Engagement willcontinue.

59

Stewardship report 2023

Country/
regionIssue

Initiative

Overview of the collaboration

Our involvement

Outcomes

TaiwanESG
policy anddisclosure

Taiwan Stock
Exchange(TWSE)

Taiwan Stock Exchange (TWSE)
is the primary stock exchange
in Taiwan.

Engaged with the regulator
on the prospects of ESG
development in Taiwan
including providing feedback on
ESG disclosure in the region.
We requested that TWSE bringforward their sustainability
reports disclosure deadline
to be prior to company AGMs
in order to align with global
practices.

TWSE noted our ask. However,
due to resource limitations within
the Taiwanese audit community,
they stated that the priority isgiven to financial reporting aheadof AGMs, therefore pushing theaudit of ESG reports to after
AGMs occur. We will continue toencouraage this position to bereviewed.

TaiwanCorporate
governanceevaluation
andshareholder
rightsprotection

Taiwan Stock
Exchange(TWSE)

Taiwan Stock Exchange (TWSE)
is the primary stock exchange
in Taiwan.

Discussed and engaged
with the regulator TWSE
on corporate governanceevaluation, shareholder
proposals, setting up
nomination committee,
remuneration transparency,
statutory directors,
accumulative voting, ESG reporttiming, shareholder rights, andacting in concert rules.

TWSE accepted our suggestion
to consider promoting a
combined remuneration andnomination committee, butother concerns raised were notaddressed.

China

Climatedisclosure

China Instituteof Financeand CapitalMarkets(CIFCM)A decision support center,strategic think tank andtheoretical research base,
dedicated to the research of
long-term, forward-looking,comprehensive and systematic
issues in capital markets,
under the direct administrationof the China Securities
Regulatory Commission(CSRC).

We participated in a net zerofinancial disclosure survey
with the aim of supporting
improved disclosure in themarket, sharing our TCFD
report and our approach toclimate-related engagement toprovide an effective case study
on disclosure.

The results will be used to inform
regulatory policy decisions.

Pakistan

Labourstandards

InterfaithCentre on
Corporate
Responsibility(ICCR)

A coalition of over 300 global
investors using shareholder
advocacy to press companies
on environmental, social, andgovernance issues.

ICCR organised an investor
statement calling for the
expansion of the International
Accord model to Pakistan
to improve worker safety
protections following thesigning of the International
Accord for Health and Safety
in the Textile and Garment
Industry by 194 brands in
2021. We were invited by
ICCR to to consider signing
the Investor Statement to bereleased publicly.

Alongside investors representing$2.1 trillion in assets, we
signed the statement callingon apparel companies sourcing
from Bangladesh and Pakistan tostrengthen their implementationof human rights due diligence toeffectively embed their corporate
responsibility to respect humanrights.

GlobalLabourstandards

The FAIRR
Initiative

Collaborative investor networkthat focuses on material ESG
risks and opportunities within
animal protein supply chains.

Engagement with seven major
meat producers. We participate
in shaping the engagement
agenda and participate incollaborative engagement on
labour standards

Enhanced corporate performanceon labour standards in the meatindustry.

601 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Country/
regionIssue

Initiative

Overview of the collaboration

Our involvement

Outcomes

GlobalLiving wages

ShareAction’s
Good Work
Coalition

Investor engagement initiative
aimed at improving the
integration of employment
standards into investment
decisions and coordinate
collaborative engagement.
Engagement focus on labour
standards, living wage
standards, accreditation,transaprency of the FTSE350,
extention to DEI with a focus on
ethnic diversity.

We participated in an investor
roundtable to discuss theeffects of less-than-living wages
on investors and the economy.
We provided our views on therole of investors in addressing
systemic issues and what
guardrails around living wages
are possible.

Increased living wages paid,
increased number of accredited
Living Wage employers in theUK, and enhanced investor
awareness.

Asia

Sustainable
proteins

Asia Research& Engagement
Sustainable
ProteinTransition
Platform

As a founding investor of
the Platform we continue tocontribute to developing its
topics, engagement frameworkand evaluation indicators. We
are an active participant incorporate engagement andcontinued development of the
Platform.

We participated in engagement
strategy review meetings,
discussing solutions to nonresponses, and collaboration
with other nature-focused
initiatives to align investor
voices. We supported thedevelopment of engagement
agendas and held calls withmultiple companies in theregion.

More formalised corporate
engagement based on a 2030
vision and accompanying focus
areas and indicators to evaluate
company progress.

UK

UK
Corporate
Governance
Code

The Financial
ReportingCouncil

The Financial Reporting Council
is a UK regulator that promotes
transparency and integrity inbusiness.

Responded to the public
consultation launched by the
FRC on proposed revisions to
the UK Corporate Governance
Code including promoting theflexibility of the Code so thatits application to Small Caps
is more relevant, and a reviewof the remuneration landscape
given the tension between
investors and companies on
the subject. In addition, as
members of the Investment
Association and Investor
Forum, we provided direct
feedback to their consultation
and areas which we were moreconcerned with as a large
active manager.

The development of an improved
corporate governance code forcompanies highlighting updated
best practice and ensuring the
integrity of the comply or explain
model.

61

Stewardship report 2023

Country/
regionIssue

Initiative

Overview of the collaboration

Our involvement

Outcomes

India

Sustainability
disclosureandcorporate
governance

Securities
and Exchange
Board of India(SEBI)SEBI is the securities
market regulator in India,
ensuring transparency
and protecting investors
interests.

We engaged with theregulator on the upcoming
Business Responsibility
and Sustainability
Reporting core disclosureand assurance requirement
and corporate governancerules in India.

Only some of the questions
and concerns submitted wereaddressed. We will continue
to engage to work towards
improvement of the corporate
governance structure in India.

FranceGenderdiversity

30% Club
Invester GroupFranceThe 30% Club Invester
Group France aims toincrease the representationof women in the SBF 120’s
executive management
teams to at least 30%
by 2025. The Group also
aims to collaborate witha community of investors
around the issue of gender
diversity.

We engaged with multiple
companies in France on
their efforts to improve andreport on gender diversity
and other efforts related
to diversity, equity, andinclusion such as flexible
work and parental leave.

We have identified bestpractice at several
companies, which we areable to communicate tocompanies that we consider
to be laggards. We havealso seen a greater focus
by companies on gender
diversity throughout theirorganizations, which wehope will lead to improved
practices.

TaiwanShareholder
rightsprotection
and hybrid
AGMs

TaiwanDepository& Clearing
Corporation(TDCC)

Taiwan Depository &Clearing Corporation(TDCC) is the sole back-end
institution for Taiwan's
financial market, with a goal
to create a more robustand efficient operation of
Taiwan's financial market.

We engaged with theregulator on how to
improve foreign investor'srights in attending hybrid
shareholder meetings, thelegal limitation of exercising
live votes at shareholder
meetings and disclosureof the ultimate beneficial
owners.

This visit helps us understandthe limitation of pushing for
further shareholder rights
protection in the current legal
environment. As there is
no requirement to disclose
the ultimate beneficial
owners in the market,
all the foreign investors
need to be represented
by local custodians, which
creating further barriers on
exercising real time voting
at shareholder meetings,
despite the market recently
allows hybrid shareholder
meetings.

TaiwanVirtual
AGMs andshareholder
rightsTaiwanDepository& Clearing
Corporation(TDCC)

1:1 in person meeting withthe regulators. We leadthe engagement and willcontinue to follow up withthe regulators about its
plan to further improve it.

To exercise stewardshipand ensure the regulators
are aware the issues that
foreign investors faced.

On Jan 2023, Financial
Supervisory Commission(FSC) requested TDCC toredesign the virtual meeting
platform so foreign investors
can attend shareholder
meetings. TDCC decided
to remove the certificate
policy, and foreign investors
will be able to join virtual
shareholder meetings inMarch via a CN code that is
linked to security accounts.
TDCC will share with me again
if they have more detail.

621 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Industry initiatives
During 2023, we were collaborators in 45 industry initiatives
to help inform our understanding of emerging ESG issues aswell as share our learnings with the broader industry. These
include collaborative engagement initiatives, which can help

in addressing systemic issues within a sector or market, andgives companies the opportunity to hear a clear investor voice on
a topic. Examples of specific collaborative engagements can befound in Chapter 3.

Initiative

Overview of the collaboration

Our involvement

Outcomes

30% Club France
InvestorGroup

Investor-led group aiming toboost the number of womenin board seats and executive
leadership of companies in the
SBF 120 index.

Member of the investor coalition,
leading and supporting several
engagements.

Throughout 2023, we participated in several collaborative
engagements with the 30% Club France and SBF 120
companies to discuss their approach to diversity, equity,and inclusion, including leading an engagement with
Aperam. The objectives of the group include having
companies have at least 30% women in the executive
committee by 2025 and that companies provide
disclosure regarding the procedures used to find andappoint new members to the executive management teamand how that process ensures diverse leadership. We
also encourage companies to provide information on how
diversity materializes throughout the organization.

30% Club UK
InvestorGroup

Investor-led group aiming toboost the number of womenin board seats and executive
leadership of companies in the
FTSE 350 index.

Member of the investor coalition,
supporting several initiatives.

We attended working group meetings to understand theprogress of gender diversity on the board and executive
pipeline. In addition, the 30% Club is also due soon toissue its first Annual Report outlining the work conducted
over the year.

30% Coalition(US)

Group of public and privatecompanies, professional services
firms, institutional investors,
government officials, andadvocacy groups collaborating
to increase diversity in corporateboardrooms.

Member of the investor coalition,
leading and supporting several
engagements.

Participated in a strategic review of the Coalition's
operations. No other outcomes to report for 2023.

63

Stewardship report 2023

Initiative

Overview of the collaboration

Our involvement

Outcomes

30% ClubGermany

Investor-led group aiming toboost the number of womenin board seats and executive
leadership of companies in the
DAX40 and MDAX

Member of the investor coalition.

The initiative launched towards the end of 2023 with
an official press release. The companies in the DAX40
and MDAX received an initial outreach letter stating thegoals of the investor group. The 30% Club Germany
Investor group encourages DAX 40 companies to have an
action plan in place to ensure their management teams
comprise at least 30% women by 2030 and we aspire toextend this scope to the MDAX in the future.

Access to
Medicine
Foundation

Independent, non-profit
organisation working to stimulate
and guide the pharmaceuticalindustry. Produces the Accessto Medicine Index, Antimicrobial
Resistance Benchmark, Accessto Vaccines Index.

Member of the investor coalition,
leading and supporting several
engagements.

We continue to see progress linked to our one-to-one
and collaborative engagement on access to medicine.
Access to medicine is increasingly acknowledged as a key
material issue for pharmaceutical companies, and accessstrategies are becoming more advanced. In 2023, we
also spoke at an investor panel during the launch event of
the Medicine Foundation’s new Generics and Biosimilars
Programme.

Access to
Nutrition Index

Independent, non-profit
organisation producing theAccess to Nutrition Index.
Benchmark evaluates the world's
largest food and beverage
manufacturers' policies andperformance related to theworld's most pressing nutrition
challenges: obesity andundernutrition.

Engagement on public health andthe role of food and beverage
producers in providing healthierchoices for consumers.

In 2023, we participated in one collaborative engagement
call of the back of the 2021 Access to Nutrition Index
before this engagement cycle came to a close. At the endof 2023, ATNI launched a new iteration of the India Index
which we have been closely monitoring. A final decision
about our participation in the collaborative engagement
under the India Index is due in 2024.

Asia Corporate
Governance
Association(ACGA)

An independent, non-profit
membership organisation
dedicated to working withinvestors, companies andregulators in the implementationof effective corporate governancepractices throughout Asia.

Member of the investor coalition,
leading and supporting several
engagements.

We joined 11 collaborative engagements this year
organized by ACGA. We also attended ACGA’s annual
conference hosted in Mumbai, India, and it side
events such as company site-visits and meetings withregulators such as SEBI and NSE, focusing on BusinessResponsibility and Sustainability Reporting core disclosure
requirement and corporate governance structure. We
also joined its quarterly membership and country working
group (China, Japan and Korea) meetings to discuss
engagement focus and market trends.

641 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Initiative

Overview of the collaboration

Our involvement

Outcomes

Asia Research &Engagement(ARE) – Energy
Transition
Platform

Organisation that structures,
implements and assembles
investor collaborative
engagement programmes acrossAsia. Performs in-depth industry
and company research thatprovides strategic insight into
key ESG issues to underpin
engagement work.

Member of the investor coalition,joining several engagements.

As active participants in Asian Research & Engagements'
Energy Transition Platform, we engaged with 9 Asianfinancials and 2 Asian utitilies, discussing how they weremanaging climate-related risks. We had a number of
positive discussions with these companies.In particular,
we see several of the financial institutions enhancing
their climate risk management and accelerating theimplementation of their financed emissions targets,for example through the provision of transition financeand through engagement with their clients. These are
topics that have formed a key part of the collaborative
engagement with these companies, and it is positive that
we are starting to see progress.
We also participated in six engagements in ARE's
Sustainable Proteins Platform which strives to improvesustainability in the proteins production including climate,biodiversity, animal welfare, and labour standards. During
this year we saw improvements among some companies
including a zero-deforestation commitment, generally
increased scrutiny of deforestation risk from feed inputs
and progress towards emissions reductions targets.
Animal welfare issues are still receiving less attention.
We co-signed a letter to the CEO of one company to ask
for dialogue about sustainability strategy with seniordirectors.

CarbonDisclosure
Project(CDP)

Non-profit organisation that runs
the global disclosure system
for investors, companies, cities,
states and regions to manage
their environmental impacts.

Member of the investor coalition,
supporting several engagements.

In 2023 we did not participate in the CDP's nondisclosure engagement campaign of the CDP. We continue
to use CDP data for research, engagement and voting
purposes.

ChemScore

Benchmark created by NGO
International Chemical
Secretariat (ChemSec). It ranks
the world’s top 50 chemical
producers on their work to
reduce their chemical footprint.

We engage a range of companies
on chemicals management.

We engaged a range of companies on chemicals
management, leveraging the reports’ findings. We also
attended a roundtable discussion focused on safety ofhazardous chemicals management.

Climate Action
100+

Investor-led initiative to ensure
the world’s largest corporate
greenhouse gas emitters takenecessary action on climatechange.

Member of the investor coalition,
leading and supporting several
engagements.

The CA100+ initiative entered its second phase in
2023. The core purpose remains unchanged, but there
will be a greater focus on identifying and working on
sector transition pathways and barriers, and on going
deeper on specific issues such as carbon accounting
and bondholder engagement. In terms of progress by
the companies, we continue to see good results on
disclosure and board oversight, but challenges on theoverall level of ambition compared to a 1.5 degree
pathway, and on setting sufficiently clear and robusttransition pathways.

Corporate
Governance
Forum

Facilitates investor dialogue on
UK governance and proxy voting
matters. The Forum is madeup of 23 institutional asset
owners and managers who meeton a regular basis to discuss
governance best practice andcontentious voting issues.

Member.

Whilst Forum members do not discuss specificvote intentions, our membership has enabled us togain, through discussion and debate, an improved
understanding of relevant issues around the time ofinvestee company shareholder meetings. This dialogue
helps us to keep abreast of investor sentiment aroundissues relating to executive compensation, board
independence and a host of other core governance andsustainability topics.

65

Stewardship report 2023

Initiative

Overview of the collaboration

Our involvement

Outcomes

Data
Convergence
Initiative

Drives convergence from private
equity participants towards a setof ‘best-practice’ ESG metrics.
Aims to increase the availability
and quality of meaningfulperformance based ESG data, as
well as create private sector ESG
benchmarks.

Member of the investor coalition,
supporting engagements.

We newly joined in 2023. No direct actions to report asof yet.

Eumedion

Non-profit organisation aiming
to promote good corporate
governance and sustainability
policies at Dutch listedcompanies and to promote
engaged and responsible
shareholdership by its members.

Member, participate incollaborative engagement.

Eumedion’s investment committee, of which we arepart of, supported the review of Eumedion’s Corporate
Governance Manual 2024 and Eumedion’s response to
the SFDR review.

FAIRR

Collaborative investor networkthat focuses on ESG risks andopportunities around animal
agriculture.

Member of several collaborative
engagement initiatives:

AMR: While AMR remains an issue of concern to us
we de-prioritised engagement with the animal healthcompanies during 2023. We are maintaining AMR asa topic to address as part of wider engagement withthe pharmaceutical sector, and will continue selectively
engaging food production and retail on improved
antibiotic stewardship. In 2023 we supported shareholder
proposals relating to AMR at McDonald’s, including asking
the company to phase our medically-important antibiotics,
comply with WHO guidelines, and provide a report on
animal welfare.

AMR: Collaborative engagementwith animal health companies.
Signed tailored collaborative
outreach letters to all companies
in the initiative and followed up
with a subset to request private
meetings.
Unpacking Labour Risk in Global
Meat Supply Chains: Engagementwith seven major meat producers
via letters and meetings to
discuss labour standards in meatproduction.
Waste & Pollution: Corporate
engagement on waste fromanimal protein production eg
raising of cattle, poultry.
Working conditions: Corporate
engagement on working
conditions at major protein
producers, including topics likehealth and safety, workforce
dialogue, and sick pay policies.

Waste & Pollution: We supported the initiative's planningand participated in one company call to encourage
disclosure on metrics for assessing environmental
impact from animal waste. The engagements have had apositive response from companies, but the level of risk
assessment and mitigation efforts is poor across theboard. While we decided not to participate in the second
phase of the initiative, we aim to embed the findings
and engagement points across our protein producer
engagement.
Working Conditions: We continued to support the third
phase of the initiative with input into engagement
planning. We chaired one of the engagement calls
discussing responsible recruitment of migrant workers,
sick pay policies, and workforce engagement.
The Sustainable Proteins initiative has concluded, and so
has our participation.

Find it, fix it,
prevent it

66

Investor led initiative targeting
UK-listed companies todemonstrate commitment toeradicating modern slavery fromtheir supply chains.

Member of the initiative, engaging
companies.

We engaged two companies in the hospitality andconstruction sectors on their risk assessment,
monitoring, and remediation of modern slavery cases.
The dialogues were positive, with management appearing
to put more attention to the risks and establishing
traceability and grievance mechanisms. However, none
had identified indications of modern slavery which might
indicate that monitoring needs further refinement.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Initiative

Overview of the collaboration

Our involvement

Outcomes

Global Network
Initiative

NGO with the dual goals of
preventing Internet censorship byauthoritarian governments andprotecting the Internet privacy
rights of individuals. Membership
includes ICT companies, civilsociety organizations, academics,
and investors.

Member of the investor coalition.

Enhanced corporate performance on protecting andadvancing freedom of expression and privacy rights in the
ICT industry.

Human CapitalManagement
Coalition

Coalition of investors to elevatehuman capital management.
Engages companies and othermarket participants with the aimof understanding and improving
how human capital management
contributes to the creation of
long-term shareholder value.

Member of investor coalition,
engaging companies on theissue.

Participated in monthly meetings centered on knowledge
sharing on insights of poor labor standards faced byworkers, trends impacting the labor market, and updates
to regulatory policies.

Impact Investing
Institute

Focuses on the development ofoutcome related investment, toencourage more investment
made with the intention to
generate positive, measurablesocial and environmental impact
alongside a financial return.

Member, involved in multiple
programme areas, including
green+ gilt issuance; market
policiy initiatives such as theG7 Impact Taskforce and its
focus on the Just Transition,and roundtables informing the
FCA's Disclosures and Labelling
Advisory Group. We joined theJust Transition Finance
Challenge, which is covered in
our public policy work below.
We are also a member of
the Placed Based Investing
Advisory Committee, feeding
into develoment of best practicerecommendations for impact
assessments and market
development activities.

Supporting and providing awareness of the role of the
public capital markets, including the large bond market,
for impact investing, noting a historically private asset
focus.
Published, in May 2023, the Just Transition Criteria,
consistent with elements defined by the G7-backed
Impact Taskforce, and to help fund managers identify
investment products and solutions that are aligned to ajust transition.

67

Stewardship report 2023

Initiative

Overview of the collaboration

Our involvement

Outcomes

Institutional
Investor Group on
Climate Change(IIGCC)IIGCC works with business,
policy makers and investors
to help define the investment
practices, policies and corporate
behaviours required to address
climate change.

Member, leading and supportingon several engagements.

We have joined the IIGCC’s Net Zero Engagement
Initiative, which aims to target European and Asiancompanies slightly smaller than those on the Climate
Action 100+ list. We have also worked with IIGCC in
its work on banks, where there is now a best practicestandard and engagement programme. IIGCC also
continues to drive good practice in investor Net Zero
strategies, including recent guidance on climate solutions
and on private asset classes. Throughout 2023, wehave been part of IIGCC’s net zero banks working
group, actively participating as both a lead and support
investor for a number of banks. In addition, we provided
feedback into their net zero standard for banks, which was
published in June.

Interfaith Centre
on Corporate
Responsibility(ICCR)

Coalition of faith- and valuesbased investors using
shareholder advocacy to press
companies on environmental,social, and governance issues.

Member, participating incollaborative engagements.
Including: Investor Alliance on
Human Rights (IAHR), Health
Equity.

Enhanced focus for companies on the importance ofaddressing ESG issues. Increased impact in addressing
human rights risks associated with business activities.
Several companies have improved their disclosure on how
they manage opioid- related business risks. We valued
engagement conducted in the pharmaceutical sector
and continue to review our participation on a case-bycase basis.

International
Capital Markets
Association(ICMA)ICMA and its members promote
the development of markets – inan RI content, they are involvedin the development of green,social and sustainability bondprinciples.

Member of various working
groups:We are on the Just Transition
sub working group which is acombination of the Social
Bond Principles Green Finance
Sustainability Linked Bond andImpact Reporting working groups.
We are also in the Social Bond
Principles working group, and in
the Impact Reporting and SDG
sub working groups.
Midway through the year we alsojoined the new Sustainability
Linked Bonds working group.

Through our involvement in various working groups, wehave contributed to the development of market bestpractices in green, social and sustainability bonds andrelated reporting.
Our contributions to the Just Transition sub working groupsupported the inclusion of a new target population in theSocial Bond Principles: those who are impacted by climatetransition projects. This is an important development tothe social bond guidelines as it allows better recognitionof the impact that climate change and the low carbon
transition will have on jobs, communities and health.
Across all working groups we raised the issue of including
community voice within impact reporting, noting theimportance of hearing from those individuals who aretargeted by impactful projects to truly understand theimpact that has occurred. We will continue to raise thisissue & recommend that surveys conducted on the target
population are included in the ICMA guidelines for social
bonds.

International
Corporate
GovernanceNetwork (ICGN)

Investor led organisation
advancing the highest standardsof corporate governance andinvestor stewardship worldwide
in pursuit of long-term value
creation.

Member.

We attended the ICGN conference in Toronto, where the
ICGN sponsored panels on a variety of both global andregional topics, including challenges associated withcybersecurity, harmonizing sustainability reporting, andeffective shareholder engagement. We also attended the
ICGN season review held in London.

Investment
Association (IA)UK industry body; facilitates themonitoring and responding
to ESG policy and regulatorychanges impacting our activities

Member; participation in the
Stewardship Committee, working
on EU & UK regulatory reforms
and market developments, andthe Sustainability & Responsible
Investment Committee working
across the breadth of industry
topics including fund labelling.

During 2023, we attended Remuneration and Share
Schemes Committee meetings where remuneration
proposals were discussed and to better understandtrends in the UK market. In addition, we directly provided
feedback to the IA’s response to the FRC’s review of the
UK Corporate Governance Code.

681 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Initiative

Overview of the collaboration

Our involvement

Outcomes

Investment
Company
Institute (ICI)US Industry body; facilitates themonitoring and responding toindustry and policy issues, aswell as regulatory developments

Contribution to the developmentof industry positions andsubmissions on regulatory
reforms in the US, UK and EU.
Participation in industry meetings
with regulators including the
US SEC, UK FCA, EU ESMA &Commission and the IFRS-ISSB
amongst others.

Member; participating on the Board of Governors,
Executive Committee, Investment Committee, Europe
Regulatory and Policy Committee, ESG Advisory Group andother working groups.

Investor Actionon
Antimicrobial
Resistance(AMR)

A coalition between the Accessto Medicine Foundation, the
FAIRR Initiative, the Principles for
Responsible Investment and the
UK Government Department of
Health and Social Care togalvanise investor efforts toaddress global antimicrobial
resistance.

We individually engage a rangeof companies on AMR and feed
broad learnings into the group.
We participate in industry
education and advocacy.

Incorporated AMR as a topic alongside engagement
conversations on a range of ESG topics with relevant
companies but made limited incremental progresssecuring commitments.

Investor Forum(UK)The Forum helps investors towork collectively to escalatematerial issues with the Boardsof UK-listed companies.

Member; participate incollaborative engagement.

During 2023, we actively participated in a number ofcollaborative engagements with other investors on
specific company issues. Primarily, these company
engagements sought to improve the financial performanceof the company and/or improve corporate governancestructures. In addition, we participated in several
educational roundtables on sustainability (net zero,water) and corporate governance (audit) topics. Lastly,
we provided input into the Investor Forum’s regulatory
submissions to the Financial Conduct Authority (FCA)
on amendments to the listing rules and the Financial
Reporting Council (FRC) Review of the Corporate
Governance Code.

Investor Initiativefor
Responsible Care

Collaborative engagement group
coordinated by UNI Global Union
focused on working standards
and quality of care in the listed
nursing casre sector.

Engagement lead for one
company and supporter for twoothers.

Engaged lead company 1:1 several times in the year.
Secured limited specific commitments as the company isdealing with significant corporate transition but deepened
the relationship and understanding of their actions.

Investor Policy
Dialogue on
Deforestation

Collaborative investor initiative
set up to engage with publicagencies and industry
associations in selected
countries on the issue of
deforestation. The goal is tocoordinate a public policy
dialogue on halting deforestation.

Member of the investment
coalition.

We are active members of the Brazil and Consumer
Countries workstreams. In 2023 we took part in an IPDD
delegation to Brazil to engage the new Lula government
on its approach to halting deforestation, and advised theMinistry of Finance on structuring Brazil’s first sustainabledebt issuance.

Investor Tailings
SafetyInitiative &Investor 2030
Mining Agenda

Investor led initiative aimed atdriving safety in the mining sector
after the disaster at Brumadinho,
Brazil, where a tailings storage
facility failed, killing 270 people,
and causing environmental
damage.

Co-lead on some of the corporate
engagements.

We sent disclosure request for companies across thesector to align with the Global Industry Standard on
Tailings Management in 2022. The tailings initiative led
to the development of the Global Commission on Mining
2030 in 2023, and which we are a signatory of.

Mining2030

Muti-stakeholder research of
ESG issues facing the mining
sector, developing a holistic
understanding of best practice
regarding their management.

Signatory member.

We added our support to the initiative in Q3 2023, bypledging support to the Global Investor Commission on
Mining 2030. As part of this initiative we are supporting
the developing consensus about the role finance has indeveloping a socially and environmentally responsible
mining sector.

69

Stewardship report 2023

Initiative

Overview of the collaboration

Our involvement

Outcomes

Nature Action
100+

Investor-led collaborative
engagement programme toengage with companies andpolicymakers on nature.

Founding member. We will
engage companies in key
sectors to try to halt and reverse
biodiversity loss by 2030.

We continue to sit on the Steering Group and in theTechnical Advisory Group of the initiative, and will
participate directly in engagements with five companies
which will start in 2024.

Net Zero AssetManagers
Initiative

Public commitment to initiative.
International group of asset
managers committed tosupporting the goal of net zero
greenhouse gas emissions by
2050 or sooner, in line with
global efforts to limit warming
to 1.5 degrees Celsius; and tosupporting investing aligned withnet zero emissions by 2050 orsooner.

Signatory. Committed toreaching net zero greenhousegas emissions by 2050 orsooner across all assets undermanagement.

We continued to work in 2023 on implementing our Net
Zero commitment, including making our Net Zero tool for
equities and bonds available through our central Aladdin
data system, and engaging with high-emitting companies
held in our strategies, both through collaborations and
1 on 1. We fulfilled our NZAMI reporting requirements
through our PRI and CDP submissions.

Platform Living
Wage
Financials

Coalition of financial institutions
that encourages and monitors
investee companies to address
the non-payment of living wage inglobal supply chains.

Chair of the Platform’s Garment
Working Group; member of theFood, Retail and Agri working
group, future member of theManagement Committee andTreasurer.

Enhanced transparency, improved remedy for workers
in terms of living wages paid, increased number ofaccredited Living Wage employers (in the UK), andenhanced investor awareness.

701 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Initiative

Overview of the collaboration

Our involvement

Outcomes

Pre-EmptionGroup

UK capital markets body (equity
issaunce and shareholder preemption rights).

Participation in the UK PreEmption Group, specificallyaround UK Capital Raising
standards.

No outcomes to report for 2023.

Principles for
Responsible
Investment (PRI)

Global responsible investment
association, membership is a
pre-requisite for many clients.

Signatory; Member of
Stewardship Advisory Committee
and PRI Advance collaborative
initiative on Human Rights.

Reported relevant responsible investment activities
in 2023, encompassing the entire global Columbia
Threadneedle Investments business in a single entry forthe first time. Sponsored and participated in the annual
PRI in Person event in Tokyo, and also participated invarious consultation activities with PRI. Participated in PRI
Advance meetings and engage with two companies fromthe target list. Member of the Stewardship Resources
Technical Working Group, contributed data and provided
feedback to inform the final project report ahead of
publication.

ShareAction
Good Work
Coalition

Investor engagement initiative
aimed at driving up standards
in the workplace. Engagement
focus on labour standards, living
wage standards, accreditation,transaprency of the FTSE350,
extention to DEI with a focus on
ethnic diversity.

Member of the investor coalition,
supporting several engagements.

We participated in two engagement calls to discussapproaches to living wage certification and to follow up
with Sainsbury's leadership on the 2022 shareholder
resolution and its wage strategy. We have observed thatcompanies have extended financial support like pay
raises to employees to mitigate inflationary pressures andtaking the Real Living Wage as a benchmark but that therigidity of committing to certification presents a challenge.
We aim to create a more holistic approach to engaging on
the wage-setting mechanism.

ShareAction
ChemicalsWorking Group

Investor group focussed on
engagement with the chemicals
sector on decarbonisation.

Signatory. Co-signed a joint
investor letter to engage with key
European chemicals companies,
and in 2022 joined various follow
up calls alongside other investors
to engage companies.

We attended joint engagements with group members,
discussing topics such as emissions management andproduct stewardship. Additionally, attended round tablediscussions on hazardous chemicals.

SPOTT

SPOTT scores palm oil, tropicalforestry, and natural rubbercompanies annually against over
100 sector-specific ESG
indicators to benchmark theirprogress over time.

Investor supporter; engage
companies to express the needfor enhanced transparency.

We had several meetings with ZSL SPOTT in 2023,
including visiting the SPOTT team at their offices in
London and sessions on engagement priorities for several
companies in the sustainable natural rubber and paper
value chains. SPOTT have joined an investment coalition
we convene on deforestation in automotive supply chains
to be one of the expert advisor partners.

Sustainability
Alliance – IFRS

Develops standards for a
global baseline of sustainability
disclosures to meet the
information needs of investors
and enable companies to provide
comprehensive sustainability
disclosures.

Member of the IFRS
Sustainability Alliance and related
working groups.

We are an active member of the IFRS Sustainability
Alliance and in particular the technical working groupinvolved in updates to the Sustainability AccountingStandards Board (SASB) standards and the International
Sustainability Standards Board (ISSB) standards, IFRS S1and IFRS S2.

Transition
Pathway Initiative

A PRI sponsored initiative, thisis an asset-owner led initiative
which assesses companies'
preparedness for the transition
to a low carbon economy. It is
supported by London School of
Economics, a research driven
initiative on high emitting sectors
carbon transition and strategic/
management commitment toaddress climate transition.

Supporter, committed to using
the TPI tool and its findings
in a range of ways, including
engagement with companies.

We continue to liaise with TPI on their climate data,
including providing feedback to TPI on their new approach
to appraising sovereign issuer alignment with net zero.
During 2023, we provided feedback and contributed to thedevelopment of the TPI’s Net Zero Banking Assessment
framework, a set of indicators to assess banks alignment
with the goals of the Paris Agreement, which waslaunched in June. The results of the assessment were
published in September, and we have used these to
inform our engagement efforts with these banks in thelatter part of the year.

71

Stewardship report 2023

Initiative

Overview of the collaboration

Our involvement

Outcomes

UK Sustainable
Investment
Forum (UKSIF)

Facilitates the monitoring andresponding to ESG policy andregulatory changes impacting ouractivities; pre-requisite for FNG
certification.

Member.

We are not directly involved in the governancestructure or working groups, but continue to bealigned with UKSIF’s core objective of growing
sustainable and responsible finance in the UK.
UKSIF has continued to be active in influencing andmonitoring UK public policy on climate change andsustainable investment.

Votes Against
Slavery 2023

Investor collaboration engaging
with FTSE 350 companies on
their compliance with the Modern
Slavery Act 2015.

Member of the investor coalition

For the 2023 campaign, 27 out of 29 targetedcompanies are now compliant with Section 54 of
the Act. We directly engaged with 1 company as partof the initiative and were pleased to note that they
subsequently became compliant.

Workforce
Disclosure
Initiative (WDI)

Investor initiative aimed at
improving corporate transparency
and accountability on workforce
issues. Provide companies andinvestors with comprehensive
and comparable data.

Signatory; leading/supporting
several engagements; submitting
own disclosure.

We took part in planning calls to provide our input
into WDI's engagement strategy. We reached out tosix companies to encourage reporting to WDI.

Workforce
Disclosure
Initiative (WDI)

Taskforce aimed to develop
and deliver a risk managementand disclosure framework fororganisations to report and act
on evolving nature-related risks.

Forum member.

We provided detailed feedback on the draft versionsof the framework, and were part of a financial
services biodiversity leaders group that provided
more detailed guidance to the TNFD Secretariat.
We were encouraged by the release of the final
recommendations in 2023, and will use therecommendations as a key part of our engagement
activity moving forward. In our biodiversity bestpractice framework that we published in 2023, weoutlined our expectation for companies to identify
and assess environmental impacts along the value
chain and to develop strategies to address andmeasure the effectiveness of their interventions.

During 2023, as part of our streamlined RI Approvals process,we refocused our resources to prioritise industry initiatives
where we see the most opportunity to gain inputs into ourinvestment analysis that we would not otherwise be able to gain
effectively, if at all, through engagement with companies on a
one-on-one basis and which consequently can help ultimately todeliver positive financial outcomes for our clients. We therefore
discontinued membership or participation in the following
initiatives:n BBFAW (Business Benchmark on Farm Animal Welfare)
Global Investor Collaboration on Farm Animal Welfaren Global Investors Governance Network (GIGN)n ShareAction’s Healthier Markets initiative
Both ICCR’s Investors for Opioid and Pharmaceutical
Accountability (IOPA) as well as FAIRR’s Sustainable Protein
work concluded in 2023, and we discontinued our participationaccordingly.

72

We had also listed Know The Chain in the past; while we actively
incorporate findings in our research and engagement work, we did
not collaborate with or through the organisation for these efforts.
We have also discontinued listing memberships or initiatives
that were not directly linked to the work of the RI team (e.g. theCouncil of Institutional Investors (CII)), or rather to an assessmentof our work, such as the GRESB Real Estate Benchmark, as wellas investor statements that did not result in any RI-linked activity(engagement, voting, further analysis), such as e.g. the Cerrado
Manifesto Statement of Support.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Thought leadership
We routinely publish thought leadership content on our website
to provide publicly available insights on our research relating
to ESG issues and to provide transparency around our related
active ownership work. During 2023, examples included:

El Nino: a taste of climate risks to come?
Climate risks are increasingly factoring into the global economy’s
outlook: what does a company’s preparedness for a threat likethe looming El Niño cycle say about its ability to handle climatechange?

Health matters – the importance of public health forinvestors
Covid-19 underlined why public health matters to investors. We
explore the role we play through stewardship and the allocationof capital as well as related investment opportunities.

The substitution effect: AI and the labour market
As investors, we need to know how firms will manage theseismic shift that jobs markets will experience due to generative
AI over the next few years and decades.

Chopping and changes: what are the implications of the EU’s
Deforestation Regulation?
The EU’s Deforestation Regulation will make us as investors
think about company risks and opportunities and is underdiscussion with our equity and fixed income teams.

Read more of our thought leadership on our website.

73

Stewardship report 2023

CHAPTER 7

Governanceand oversight
Columbia Threadneedle Investments has a comprehensive
governance framework designed to ensure that our internal
governance arrangements are operating effectively. This frameworkprovides a mechanism for escalation and resolution ofbusiness matters.
Our decisions related to global strategy are managed
by our operating forums, the Global Executive Group(GEG) and Global Business Group (GBG). The GEG and
GBG exercise, as part of their responsibilities, strategic
oversight of our business. The two forums are chairedby our Chief Executive Officer Ted Truscott. This strategic
oversight is in addition to the governance arrangementsthat we have in place across the three regions in which
we operate our business: North America, EMEA and
APAC. The Board of Directors for each regulated legal
entity within Columbia Threadneedle Investments
supported by local governance committees oversee
the management of strategic business decisions andbusiness performance together with the managementof risk in line with our enterprise risk management
framework supported by control functions including
Operational Risk, Legal and Compliance.

Governing responsible investment
Senior executives located in each region provide
oversight by way of the Investment Oversight Committee(IOC) in North America and the Investment Management
Committee (IMC) in EMEA and APAC, and Alternatives
Investment Management Committee (Global remit), each

We have global strategic
oversight, as well as regional
governance arrangements

74

of which has representation from the RI team. These
committees meet monthly and have responsibilities
for Columbia Threadneedle’s overarching investment
framework, including our RI engagement and proxyvoting activities. Our Global Chief Investment Officer(CIO) is responsible for ensuring that information related
to environmental, social and governance (ESG) factors is
included where suitable in our investment research forequities and corporate debt, helping to build a holistic
view of the risks and opportunities attached to ourholdings and potential investments.
Our Responsible Investment Council meets monthly
to align on RI implementation; define firm-wide priorities
to achieve our RI vision and mitigate RI risks; and act
as an escalation route to resolve cross-functional
dependencies, risks and issues, among other things.
Sample agenda items include our firm-wide climatechange and net zero approach, and greenwashingrisk. Voting members include representatives fromthe Executive Group; Investment leadership acrossequities, fixed income, multi-asset and alternatives; RI;
Distribution; Product; and Legal. The Council is chairedby the Global Head of RI. Non-voting members include
representatives from a diverse range of business
functions within the firm.
As referenced in Chapter 1, during 2023 we establisheda streamlined RI approvals process for participation
of/in new RI-linked memberships, initiatives, publicstatements or consultations, or regulatory submissions.
The RI Approval Work Group meets monthly andcomprises the Global Head of RI, Global Head of
Research, Global Head of Equities, Global Head of
Fixed Income, and the Ameriprise Corporate Social1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

Responsibility Working Group Chair. It is chaired by the Head of
Active Ownership.
Our Responsible Investment Advisory Council meets threetimes a year and helps us maintain the integrity of the standards
by which our growing range of responsible and sustainable funds
are run, providing advice on ethical and sustainability criteria. The
insights they offer also feed into our broader RI activities. The
Council consists of five external members, including one who
retired from Columbia Threadneedle Investments in March 2023,
and one internal member. They are leaders in their fields and bringinternational experience across RI, environmental, social andethical issues.

ESG funds and solutionsn Head of reo® (our engagement overlay service)n RI Product specialists

ESG integration and implementationn ESG Integration Directorn ESG Integration Strategistn Head of RI Implementationn ESG Data Scientist
n Quantitative analysts

Resourcing stewardship activities
Our RI team is led by the Global Head of RI, who reports to the
Global CIO. The team comprises over 45 RI specialists who work
to support our clients, our investment professionals and ouroverall business through their expertise across ESG thematic
research, ESG integration, ESG policy, client reporting and thought
leadership content. Geographically, most of the team are based in
EMEA and the US. One product specialist re-located to Singapore
during 2023, to expand our RI expertise in APAC. Active ownershipis a key aspect of our RI capability, and within the team there areover 20 analysts focused on RI engagement and voting.
A full breakdown of how our RI team is organised, as of 31
December 2023 is outlined below:

n Reporting analysts
They are also organised into working groups – such as the Fund,Environment, Social and Governance ‘pods’ – and often work acrossother areas relevant to their role, depending on their expertise.
This includes work related to compliance with regulation, emerging
markets, and the UN Sustainable Development Goals.

Based on an optional self-disclosure survey that was completed
by 27 members of the RI team at end-2023, we have:74%

female representation and 26% male representation
Leadershipn Global Head of RI

ESG analysis and active ownershipn Head of Active Ownershipn Engagement Manager
n Head of Proxy Voting Operations

4

ethnic groups

12

languages spoken

n Climate Strategist
n Social Strategist
n Corporate Governance lead for EMEA/APACn Corporate Governance lead for North American RI and Thematic Research analysts

45+

specialists within the RI team76

Individuals come from diverse professional backgrounds, including
investment, consulting, climate change, corporate governance andhuman rights. Of the survey respondents, there is an average ofnine years’ experience working in RI/ESG/sustainability-related
fields, ranging from two and a half years to 21. 12 respondents
have degrees or qualifications they deem relevant to ESG and/or sustainability. This includes university degrees in International
Development and Food Policy, Human Rights and Sustainability& Management; the ESG CFA certificate; and the Postgraduate
Certificate in Sustainable Business from Cambridge Institute for
Sustainability Leadership. 14 of the respondents are either a CFA
Charterholder, hold the Investment Management Certificate, or are
studying towards either of these two qualifications. We believe that
this diversity and experience strengthens the effectiveness of our
RI team’s stewardship capabilities by enhancing our understanding1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceof the context and environment in which companies operate andallowing us offer constructive input to help them address thechallenges they face.

This is further supported by an internal Front Office Portal
which enables stock-level research through various ESG andclimate lenses.

A key focus of our stewardship activities is to enhance ourinvestment research so that we can make informed capital
allocation decisions as active investors acting in our clients’financial interests. As referenced in Chapter 2, our research analysts
collaborate across asset classes and sectors, and undertake ESG
analysis and engagement as part of their role, while RI thematic
analysts produce research on specific sustainability themes. RI is
also supported by other business functions across our organisation.
This includes dedicated ESG analysts on investment desks, as well
as RI roles within our Legal and Compliance teams.

While we believe in the value of proprietary research as theprimary source of analysis, we do leverage external researchto support our own analysis and research. We use a variety ofproviders for what we view to be valuable data and researchthat facilitates effective management of assets on behalfof clients. These include Aladdin, Bloomberg, CorpAxe,
Morgan Stanley Capital International (MSCI), Institutional
Shareholder Services (ISS), and other data providers. Our
oversight of external service providers is described infurther detail in the pages below.

Training

Performance management and incentivising stewardship

During 2023, training for RI specialists and investment professionals
included:

Remuneration is driven by team and business performance,
assessed through the performance appraisal process, in line withindustry practice and applicable regulatory requirements. On a
firmwide basis, continuing to embed RI across the business is a
strategic priority taking into account differing needs across asset
classes and clients. We evaluate investment performance for
portfolio managers and research analysts based on scorecards
largely focused on three and five-year results. We believe these
performance timeframes are directionally aligned with ourlonger-term focus on stewardship for our clients and deliveringon their investment objectives. For RI professionals under the
Global Head of RI, performance objectives include the delivery ofhigh-quality RI analysis and activities, including engagement andvoting in line with our global RI policies, contributing to building
Columbia Threadneedle’s RI profile, ESG integration in line withdiffering client requirements, and contributions to enhanced ESG
disclosure.

n The use of newly launched ESG tools on Aladdin
n Implementation of our global active ownership policies
n Refresher sessions on our RI engagement themesn Fixed Income training for RI team membersn Research training for RI team membersn Training on how to ensure compliance with regulatory
requirements governing our RI engagement activities

Investment in systems, process, research analysis andservice providers
We continually invest in technology to support our researchand inform our active ownership activities. For example, wehave continued to extend functionality within our portfolio ordermanagement system, Aladdin, to enable portfolio managers
and analysts to monitor and consider data covering investment
restrictions resulting from adherence with ESG regulatory
requirements and transition to net zero by investee companies.

We believe that our ongoing work to integrate our governance,
resources, and performance objectives/assessment is enabling
effective stewardship at our firm. We continuously aim to not justintegrate but overall improve our systems to deliver the results
expected by our clients and so maintain their trust.

77Stewardship report 2023

Monitoring
service providers
As outlined in Chapter 2, we conduct proprietary research on
issuers. This is supplemented by data and research from a variety
of proxy voting and ESG service providers. Examples of service
providers we use in relation to stewardship include Sustainalytics,
MSCI, Bloomberg, ISS and Glass Lewis.
The determination of which service provider and services will
enhance our process is driven by portfolio manager and analyst
needs. We use a select group of providers for valuable data andresearch that supports effective management of investment
assets and our active ownership efforts on behalf of clients.
The following actions are taken to monitor and manage ongoing
relationships:

We use a select group of providers
for valuable data and research,driven by portfolio manager andanalyst needs

78n Business owners are responsible for managing andmonitoring the vendor relationship and reviewing
performance. The evaluation of vendors is defined through avariety of measurements that look at categories critical to theperformance levels. Examples include platform availability,
accuracy of research and execution, and issue resolution.
n Vendor issues are tracked in a centralised system andmonitored to ensure resolution. Business owners escalate
issues requiring additional support to our dedicated Vendor
Management team. These are issues outside of the businessowners’ ability to resolve operationally and are likely
contractual issues that may or may not involve a financial
impact.
n If an issue is escalated, typically the contract is reviewed, ourLegal team may be consulted, and meetings are held withthe vendor and business owner(s) so that the issue can be
resolved. Senior leadership may be involved depending on theseverity of the issue or potential financial impact.
n Vendor relationships are reviewed by internal risk teams ona regular basis, to assess the vendor’s ability to meet our
security and business continuity requirements.
We seek to continuously engage with new and existing
service providers to evaluate products that could enrich our
research process.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Example 1: ISS

Whilst we are regularly in contact with our proxy voting
administration provider ISS, and we also hold formal
quarterly review meetings that provide an opportunity forstructured due diligence. These meetings cover standard
agenda items and any ad hoc issues raised by the proxyvoting analysts or by clients; the issues are discussed andtimelines for resolutions are set and then tracked. Aheadof these meetings ISS provide us with a report against Key
Performance Indicators. Areas of focus in the quarterly
meetings are detailed in a formalised agenda. Discussion oneach agenda item will be based on qualitative (analyst input)
and quantitative (management reporting tools) evaluation in
addition to specified contractual service level agreementsthat cover most aspects of the relationship. Areas reviewed
include:n Team update (including ISS client servicing, custom
policy and research teams)n Ballot generation service evaluationn Vote execution service evaluationn Account maintenance service evaluationn Client support – account management and operations
service evaluationn Client reporting – service evaluation on research delivery
and quality service evaluationn Custom policy implementation & timing review vote usage
statistics
n AOB including new service offerings
The proxy voting analysts regularly audit the votes executed
under the voting policy to ensure that our voting policies
are applied properly by ISS. In addition, we undertake avoting policy review annually, which involves significant
collaboration between research representatives from ISS and
RI professionals. This provides the opportunity to ensurethat ISS is comfortable implementing any policy changes andthat further guidance is provided where necessary. Regarding
feedback provided to ISS during 2023, no material concerns
were flagged.

Example 2: ESG metrics providers

During 2023, one area of focus was assessing our useof ESG metrics in reporting outputs. To consider how we
may expand and evolve the data we use to contribute toour reports, we researched and met with different data
providers to understand how their products and services
may suit our aspirations. This included vendors we alreadyuse, one such example being efforts to enhance our SDG
tool, which involved an in-depth review of methodologies,
data application and underlying logic that spanned acrossthe majority of 2023. We also met with prospective
providers too. This included several biodiversity data
providers who offer data to quantify and assess impacts
on nature and natural capital, set science-based targets,and integrate biodiversity into investment decisions. This
includes deforestation metrics, water risk analysis, biodiversity
footprinting tools, natural capital valuation, and benchmarking
companies against nature-related SDGs. We also met withvarious sovereign climate data providers, who offer countrylevel analytics to assess climate risks for nations, track
emissions inventories and trajectories, and benchmark
sustainability efforts. This supports understanding transition
risks, monitoring national climate policy impacts, andevaluating country sustainability across institutions, humancapital, natural capital and governance. This work in engaging
existing and prospective vendors on ESG metrics continues
into 2024.

79

Stewardship report 2023

CHAPTER 8

Conflicts of Interest
We believe that effective active ownership is critical tothe health of financial markets and contributes to longterm value creation for our clients. While it is inevitablethat conflicts of interest may arise from stewardship
activities, we have put in place various controls to identify
and either prevent or manage such conflicts and ensurethat we treat all our clients equally in our RI engagement
and voting practices.

How we manage conflicts of interest to put
the best interests of clients first
All Columbia Threadneedle Investments
employees must comply with the company’s
Global Code of Ethics (Code). The Codeconsiders a conflict of interest as any situationthat presents an incentive to act other than in
the best interest of a client or without objectivity.
It identifies several specific obligations that flowfrom the duty to manage conflicts of interest,
including:n To act solely in the best interests of clientsat all timesn To make full and fair disclosure of all material
facts, particularly where the firm’s interests
may conflict with those of its clientsn To act in a manner which satisfies thefiduciary duty owed to clientsn To refrain from favouring the interest ofa particular client over the interests ofanother clientn To keep all information about clients(including former clients) confidential,

80

including identity, securities holdings
information, and other non-public
informationn To exercise a high degree of care toensure that adequate and accurate
representations and other information ispresented appropriately
Carefully managing actual or perceived
conflicts of interest affirms ourcommitment to acting in our clients’best long-term interests by putting
their needs ahead of the firm or its
employees. In addition, the Code requires
employees to be vigilant in terms ofidentifying new circumstances that may
present a conflict of interest.
Specific policy requirements of individual
employees to guard against actual or
perceived conflicts of interest include
rules restricting personal trading, politicalcontributions, gifts and entertainment,
outside activities, and the possession ofmaterial non-public information. The Codeis reviewed, attested, and certified by all
employees quarterly.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

Approach to the management of conflicts
As a result of certain aspects of our business, conflicts of interest
may arise between our different clients and/or among us and ouraffiliates. Columbia Threadneedle Investments must act solely inthe best interests of its clients, including in situations where thoseinterests may conflict with our own.
As conflicts of interest could undermine the integrity andprofessionalism of our business, we seek to identify any conflictsituations as early as possible. Such conflicts might arise
between:n Columbia Threadneedle Investments and affiliated companies
within the wider Ameriprise Financial, Inc. Groupn Companies within Columbia Threadneedle Investments
n Columbia Threadneedle Investments and suppliersn Columbia Threadneedle Investments and client(s)n Employees/agents/directors of Columbia Threadneedle
Investments and client(s)n Columbia Threadneedle Investments and employeesn Columbia Threadneedle Investments and investee companies
n Client(s) and other client(s)Where a conflict arises, we seek to mitigate and manage theconflict equitably and in the client’s interest with appropriate
systems and controls. The control framework and governancearrangements we have in place include policies and procedures,conflict registers, monitoring and reporting, governance committee
meetings, staff training and ‘whistleblowing’ mechanisms.
In the normal course of business, we educate employees about
conflicts and make them aware of our Conflicts of Interest Policy.
We require all employees, contractors, and directors to report
any new conflicts of interest they identify to their line manager for
onward escalation.
In addition, a compliance programme is in place to identify,
mitigate and, in some instances, prevent actual and potential
conflicts of interest. Internal monitoring of the application of
the Conflicts of Interest Policy, disciplinary action in the eventof a failure to comply with the policy, and the regular provisionof information to management, further support the control
framework.

Where a conflict arises, we seek tomitigate and manage the conflict
equitably and in the client’s
interest with appropriate systems
and controls

82

Where potential conflicts of interest arise, we adhere to thefollowing approach and escalation procedure:n As part of the Conflicts of Interest Policy, arrangements andprocedures are maintained to monitor potential conflicts ofinterest.
n Where decisions involve the pragmatic application of, ora deviation from, our policy, this is documented, and the
explanation and rationale recorded.
n Where issues require escalation:• This occurs initially to the relevant team heads orcommittee. Where required, the final arbiter is the relevant
Global Head, Global Chief Investment Officer or anothermember of the relevant department’s senior executive
group; and• Our Legal and Compliance teams are consulted as
appropriate.
A summary of Columbia Threadneedle’s Conflicts ofInterest Policy for EMEA and APAC is available on our
website here.

Managing conflicts of interest relating to proxy voting
During 2023 we had processes in place to identify and manage
conflicts of interest relating to proxy voting practices, including:1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs

n Maintaining a conflicts of interest company watchlist.
Proxy voting analysts received a list of companies that had
an existing business relationship with us and could present
a conflict of interest to the firm. The conflicts of interest
watchlist was maintained by our Compliance function andtook into account, amongst other matters, whether thecompany was one of our clients, a distributor of our funds,
or a shareholder in our parent company Ameriprise Financial,
Inc. The list was refreshed on a quarterly basis and typically
includes between 150-170 companies.

n Voting in accordance with custom policy templates. We
maintained custom voting policy templates which provided abenchmark for taking voting action for companies in conflictedsituations and on our conflicts of interest company watchlist.
Votes were cast by a third-party vendor (ISS) in accordancewith our pre-determined voting guidelines. If a relevant
guideline was subject to case-by-case determination, theproposal would be voted following a recommendation madeby the third-party vendor. These practices kept voting at
arm’s length to avoid a voting decision being influenced by a
conflict.

6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Examples where such a conflict may occur include situations
where one of our employees is seeking appointment to theboard of the investment fund.

n Voting at a company meeting where investment
professionals have different preferences on voting
outcomes. Where there is a lack of consensus between our
portfolio managers, research analysts and/or RI analysts
on how to vote specific proposals at a shareholder meeting,our Proxy Voting Working Group (PWG) provides a forum forthese divergent views to be considered and resolved. This
may result in votes being split where this is felt necessary
and acts in the best interests of clients. The PWG Chair may
also decide to escalate any disagreement on how to vote a
specific proposal to the IMC and/or IOC as appropriate.

n Voting on a matter at a company meeting with a potential
outcome that would favour one of our clients over another.
We take into account all of our clients’ individual investment
objectives, avoiding situations where their vote may be cast in
a way that is not aligned to their best interests. This is achievedby us acting on the same matter at a company meeting
differently and splitting voting decisions where necessary.

n Voting at meetings of investment funds we manage.
Where voting decisions arise in relation to the governancearrangements for our investment funds, we vote in line withthe recommendations of our third-party proxy voting provider(ISS) on matters that may amount to a conflict of interest.

In January 2023 we published an addendum to our Responsible
Investment Proxy Voting Policy outlining how we deal with conflictsof interests relevant to our proxy voting activities on our website,which is available here.

83

Stewardship report 2023

Case studies:
Addressing conflicts of interest relating to proxyvotingSpecific examples where we addressed conflicts of interest
relating to proxy voting during the reporting period include:n Fettering proxy voting discretion. We were asked by a
Swedish safety equipment producer to join their nominationscommittee in Q3 2023. The company is incorporated in acountry where it is common practice for major shareholders
to have a representative on such a committee. The mainrole of the nominations committee is to propose candidates
to sit on the company’s board. The decision to appoint
directors to the board is however made by all shareholders at
the company’s AGM. Before agreeing to one of our portfolio
managers joining the nominations committee, we undertook
a conflicts assessment to evaluate whether we needed to
put any additional controls in place to strengthen our existing
conflict management process. We identified that a conflictof interest may arise if the portfolio manager were to giveblanket support to the recommendation of the nominationcommittee when exercising their voting discretion at the AGM.
To prevent this conflict arising we decided that we would not
vote at the AGM on a resolution to appoint new directors tothe board. This control was not considered to undermine ourclients’ best interests. Having an investment professional
sitting on the nominations committee gives us an enhanced
understanding of the way the board functions and thestrategic direction of the business from the perspective of theboard.

n Split voting decisions where investment professionals
have different preferences on voting outcomes. We had asplit voting decision during 2023 for ExxonMobil. Our portfolio
managers in EMEA decided to vote against the election of thechair of the sustainability committee for a failure to disclose
scope 3 emissions, whereas the portfolio managers in North
America opted to support the election of the chair.

n Proxy voting of an issuer involving a director of Ameriprise
Financial, Inc. A member of the Union Pacific board also
served on the board of Ameriprise Financial, Inc. during thereporting period. To avoid a conflict of interest based on
this arrangement arising, our third-party vendor (ISS) voted

In January 2023 we published addenda
to our proxy voting and engagement
policies, setting out how we deal with
relevant conflicts of interest

84

on our behalf applying our custom policy at the 2023 AGM.
This resulted in a vote against management vis-à-vis thecompany’s say-on-pay proposal. Where our custom policy wassilent on a shareholder proposal, ISS applied their analysis
and executed the recommended vote against the matter for
resolution.

Managing conflicts of interest relating to RI engagement
Columbia Threadneedle Investments has introduced several
controls to identify and either manage or prevent conflicts ofinterest arising when our investment professionals meet with acompany. The arrangements that we have in place include thefollowing:n Engaging with a company that is also a client. We may
engage with an investee company where the company (ora related party such as a sponsored pension scheme) is
also a client. Potential conflicts of interest may arise if theengagement Objective or outline engagement expectation is
not in line with the issuer’s preferred practices. We manage
this conflict (unless we are instructed otherwise by ourclients) by applying our pre-determined ESG guidelines toall client portfolios in a manner that considers our clients’
individual investment objectives and best interests.

n RI engagement that favours one of our clients overanother. We take into account all of our clients’ individual
investment objectives, avoiding situations where we engage
with a company that is not aligned with the clients’ bestinterests. This is achieved by us (unless instructed otherwise)
applying our pre-determined ESG guidelines to all client
portfolios. In some instances, we may act on the same
matter differently for our different clients.

n Investment professionals engaging with a company alone.
Potential conflicts of interest may arise where one of ourinvestment professionals conducts an engagement with acompany alone. This approach limits access to the company
and sharing of information. We manage this conflict by all
investment professionals having a shared calendar which
includes information on upcoming issuer meetings and theoption to join the meeting. In addition, we have a consultation
process where portfolio managers and research analysts canparticipate in the annual prioritisation exercise operated by
the RI team on priority issuers, engagement projects and fund/ portfolio-specific engagements for the year. Furthermore,
there are regular exchanges between our investment
professionals to understand and align on respective
engagement efforts.

n Outside business activities. We require employees toremove themselves from situations where conflicts may
arise from their outside activities. We prohibit employees
from holding directorships with a for-profit company ororganisation. Directorships with a not-for-profit company andall other outside activities are to be pre-approved by theemployee’s line manager and the compliance department.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’
needs

Requests will only be approved where the activity does notcreate a conflict of interest.

n Data confidentiality. We have strict firewalls to keep
client holdings data confidential and secure, separating
information on the holdings of clients within managed
portfolios from that of our clients who subscribe only to
our reo® services and who have their holdings managed
by a third-party asset manager. By keeping such holdings
information confidential, we are able to refrain fromfavouring the interest of one client over the interests ofanother.

6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

clients. A case study outlining the number of market sounding
engagements for the reference period is included below.
An Addendum to our Responsible Investment Engagement
Policy was published in January 2023, setting out on our website
how we deal with conflicts of interests that may arise from ourengagement activities.

Case study:
Addressing conflicts of interest relating tomarket sounding engagements

n Market soundings. We operate a control framework
in EMEA to manage and prevent conflicts of interest
that could arise where we engage with an issuer (or aparty acting on their behalf) on potential new issues orsecondary placings ahead of them being announced to the
public as part of a market sounding. Our market sounding
framework involves a member of the Compliance teamundertaking an independent conflicts assessment todetermine whether the investment team may participate
in the engagement. As part of the conflicts assessment,
consideration is given to whether any of our existingproducts managed by the various Columbia Threadneedle
Investments entities hold financial instruments of issuers
linked to the transaction and could become subject toa trading restriction should we become privy to inside
information from the engagement. Such a restriction
would limit our ability to trade in a security that we holduntil we are deemed to no longer possess the inside
information, which may not be in the best interests of ourDuring the reporting period, the Compliance team reviewed andcarried out a conflicts assessment for 103 potential market
sounding engagements, of which investment teams participatedin 88. One of the reasons why participation may have been denied
included, amongst other reasons, the existence of a conflict withexisting investments which could not be managed in accordancewith the clients’ best interests.

Transparency and disclosure
We seek to uphold high standards in transparency and disclosure
to enable clients and broader stakeholders to review oureffectiveness in managing conflicts. Our regular reporting toclients during 2023 included our public voting record, which
provides details of how we voted on every proposal. Moreover,this annual Stewardship Report outlines how we manage
conflicts of interest and includes relevant case studies from thereporting period.

85

Stewardship report 2023

CHAPTER 9

Review andassurance
Our Columbia Threadneedle Investments active ownership
activities are supported by a breadth of policies on corporate
governance, proxy voting, engagement, as well as respective
addendums on how to manage potential conflicts of interest.
These documents support and inform our RI engagement andvoting activities on behalf of our clients.

Internal review

Effectiveness of our activities

The policies are reviewed annually by different
teams across Columbia Threadneedle
Investments: Legal, Compliance and RI teams,
as well as representatives from portfolio
management, research, and communications,and senior leaders across equities, fixedincome, CIO, and research. The policies areapproved by regional governance committees
within Columbia Threadneedle Investments.

Columbia Threadneedle Investments
undertakes a comprehensive assessmentof investment returns and associated risk
across investment strategies, with oversightundertaken by appropriate governance forums.
This assessment helps to fulfil our fiduciary
responsibilities and protect our clients from
unexpected volatility in investment performance.

In 2023 we developed an internal Collaborative
Engagement Addendum to our Engagement
Policy to cover how we comply with relevant
legal and regulatory requirements when
undertaking collaborative engagement.
The policy framework includes the following:
n
n
n
n
n
n
n
n

86

Corporate Governance Guidelines
Proxy Voting Policy
Responsible Investment Engagement Policy
Environmental and Social Practices
Statements
Conflicts of Interest Addendum to
Engagement Policy
Conflicts of Interest Addendum to Proxy
Voting Policy
Corporate Governance Guidelines Debt
Collaborative Engagement Addendum to
Engagement Policy (internal document)

In support of this work, our Investment
Consultancy and Oversight team undertake aneffectiveness review of strategies to assess
their efficacy, strengths and weaknesses, and tosupport a dialogue of continuous improvement.
The Compliance team monitor and assist withactive ownership-related matters (e.g. market
soundings and conflicts assessments).

External assurance
For our 2022 Stewardship Report KPMG LLP
prepared an assurance over key RI engagement
and voting metrics for the legacy entities’2022 activity. Observations and learnings
were applied to our harmonised, global active
ownership processes and procedures.
For this current 2023 Stewardship Report, wehave prepared for assurance by KPMG LLP overkey 2023 RI engagement and voting metrics.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassuranceStewardship report 2023

The signed opinion letter is on p92. We did this to provide
enhanced confidence in the quality and reliability of our data.
We expect to continue to seek external assurance for futurereporting outputs.

Additional internal and external controls,
certifications, assurance
RI analysts have developed monthly monitoring of RI
engagement activities, their impact and their frequency. Findings
are discussed in a bi-monthly meeting of the RI analysts, andif necessary, results are escalated to responsible thematic or
sector leads, or the team’s head. We believe this monitoringprocess helps to ensure better accuracy of our activities
when we report these externally, helps with continuous
monitoring and improvement, and feeds into any future external
assurance activity.
A selection of our funds are certified by either FNG (for the DACH
and Liechtenstein market) or by Febelfin’s Towards Sustainability
label. Each of the certification schemes have their own audit,
which confirms alignment with the schemes’ exclusion criteria
and general process development.

Internal assurance
Risk & Control Services (RCS), our internal audit department,
has integrated consideration of sustainability risk andstewardship into the annual and ongoing risk assessment
processes that drive the creation of the internal audit plan.
Assurance over sustainability risk and stewardship activities may
be achieved via through dedicated audits or through integratingthese topics into relevant audits. In 2023, RCS completed auditsof proxy voting within Columbia Threadneedle, covering aspectsof stewardship, and RI for equities and fixed income, covering
integration of sustainability risk into the investment process.
Management is actively addressing the issues noted in those
audit reports.
We believe we have robust processes in place toeffectively review and update our policies. We continue tomonitor and enhance our stewardship and engagement
approaches, ensuring they remain effective and fit
for purpose.

Ensuring fair, balanced and understandablestewardship reporting
We have designed this report to be in line with the guidelines
set out by the Financial Reporting Council and have reviewed
peer reports, and industry best practice. We recognise thatpractices will evolve over time and are committed to continually
improving our reporting to ensure enhanced readability. The
information for this report has been sourced from multiple
internal stakeholders in their respective areas of responsibility
to check and verify the accuracy of data as at 31 December

882023. The content was reviewed by senior RI professionals,
investment professionals, members of senior management, as
well as members of Legal and Compliance teams to ensure theinformation is fair, balanced and not misleading. Our other RI
publications also undergo a similar process.

Review and assurance in Alternatives
Stewardship aspects within our Alternatives product range
operate within robust governance structures which reflect our
firm-wide commitments but are also appropriately adjusted foreach asset class.

n In real estate, regional steering committees are
responsible for overall ESG strategy and associateddevelopment and monitoring of policies and processes.
We draw on external resources to help develop and provide
assurance of our ESG approaches, such as the Global
Real Estate Sustainability Benchmark (GRESB), European
Public Real Estate Association’s (EPRA) sustainability Best
Practices Recommendations (sBPR), and Better Buildings
Partnership (BBP).

n In private equity, our responsible investment processes
are documented in an internal Responsible Investment
Procedures document which is reviewed and approved
at least annually by the members of our Private Equity
team, working together with the RI team. All Investment
Committee papers have a section on ESG, which considers
ESG risks and opportunities specific to the investment
and the policies and procedures of general partners andco-investments. We then engage throughout the holding
period to drive improvements. Our diligence is informedby extensive third-party due diligence reports (financial,commercial, legal and tax), industry standards (e.g.,
OECD, Un Global Compact, UN PRI and SFDR) and direct
engagement with management teams. RCS considered the
RI approach during their 2023 audit of Private Equity. No
related issues were raised.

n In infrastructure, as referenced in Chapter 3 we have wehave developed a proprietary sustainability framework,
which is integrated in our infrastructure investment
and asset management process. In developing ourapproach to ESG integration, we draw on and workwith various industry standards, organisations andinitiatives, including the ESG risk evaluation model
developed by the Dutch Development Bank, FMO, andstandards established by the IFC (World Bank), the UN
Environment Programme (UNEP), the UN Development
Programme (UNDP) and the UK’s Development FinanceInstitution, British International Investment (BII, formerly
CDC). The Infrastructure Committee is provided
with detailed information regarding sustainability
risks and opportunities in the investment papers at
acquisition and subsequently at the bi-annual asset
management reviews.

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

Thank you for reading our 2023
Stewardship Report.

We hope it provided an insightful
demonstration of our role as stewardsof our clients’ capital.
Over the next few pages, we haveprovided appendices to demonstrate
our commitment to the UK, Japan,
Taiwan and Korea stewardship codes.

8 C onflictsof interest9 Review andassuranceStewardship report 2023

Appendices for stewardship codes
Discover how the content of this Stewardship Report aligns withstewardship codes globally.

Appendix 1: UK Stewardship CodePrinciple

Description

Page(s)1

Purpose, strategy and culture

4-92

Governance, resources and incentives

74-77
80-85

3

Conflicts of interest

4

Promoting well-functioning markets

56-73

5

Review and assurance

86-88

6

Client and beneficiary needs

48-55

7

Stewardship, investment and ESG integration

10-17

8

Monitoring managers and service providers

78-80

9

Engagement

18-34

10

Collaboration

34-36

11

Escalation

38-39

12

Exercising rights and responsibilities

40-46

Appendix 2: Principles for Responsible Institutional Investors – Japan’s Stewardship CodePrinciple

Description

Page(s)1

Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.

4-92Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities
and publicly disclose it.

80-85

3

Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with anorientation towards the sustainable growth of the companies.

10-17

4

Institutional investors should seek to arrive at an understanding in common with investee companies and work to solve problems
through constructive engagement with investee companies.

18-39

5

Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised
only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies.

40-46

6

Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting
responsibilities, to their clients and beneficiaries.

54-55

7

To contribute positively to the sustainable growth of investee companies, institutional investors should develop skills and resources
needed to appropriately engage with the companies and to make proper judgments in fulfilling their stewardship activities based on
in-depth knowledge of the investee companies and their business environment and consideration of sustainability consistent with theirinvestment management strategies.

74-77;
63-72

8

Service providers for institutional investors should endeavor to contribute to the enhancement of the functions of the entire investment chain
by appropriately providing services for institutional investors to fulfill their stewardship responsibilities.

N/A

Appendix 3: Stewardship Principles for Institutional Investors – Taiwan’s Stewardship CodePrinciple

Definition

Page(s)4-9

1

Establish and disclose stewardship policies

2

Establish and disclose policies on managing conflicts of interest

80-85

3

Regularly monitor investee companies

10-17

4

Maintain an appropriate dialogue and interaction with investee companies

18-39

5

Establish and disclose clear voting policies and voting results

40-46

6

Periodically disclose the status of fulfilment of stewardship responsibilities

48-55;
86-85

90

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Appendix 4: Korea Stewardship Report
Principle

Definition

Page(s)1

Institutional investors, as a steward of assets entrusted by their clients, beneficiaries, etc., to take care of and manage, should formulate
and publicly disclose a clear policy to faithfully implement their responsibilities

4-92

Institutional investors should formulate and publicly disclose an effective and clear policy as to how to resolve actual or potential
problems arising from conflicts of interest in the course of their stewardship activities.

80-85

3

Institutional investors should regularly monitor investee companies in order to enhance investee companies’ mid- to long-term value andthereby protect and raise their investment value.

10-17

4

While institutional investors should aim to form a consensus with investee companies, where necessary, they should formulate internal
guidelines on the timeline, procedures, and methods for stewardship activities.

18-39

5

Institutional investors should formulate and publicly disclose a voting policy that includes guidelines, procedures, and detailed
standards for exercising votes in a faithful manner, and publicly disclose voting records and the reasons for each vote so as to allow theverification of the appropriateness of their voting activities.

40-46

6

Institutional investors should regularly report their voting and stewardship activities to their clients or beneficiaries.

52-55

7

Institutional investors should have the capabilities and expertise required to implement stewardship responsibilities in an active andeffective manner.

74-79;
86-88

91

Stewardship report 2023

Independent Limited Assurance Report of KPMG LLP to Columbia Threadneedle
Investments UK International Limited
KPMG LLP (“KPMG” or “we”) were engaged by Columbia Threadneedle Investments UK
International Limited (“Columbia Threadneedle Investments”) to provide limited assurance
over the Selected Information described below for the year ended 31 December 2023.
Our conclusion
Based on the work we have performed and the evidence we have obtained, nothing has cometo our attention that causes us to believe that the Selected Information has not been properly
prepared, in all material respects, in accordance with the Reporting Criteria.
This conclusion is to be read in the context of the remainder of this report, in particular theinherent limitations explained below and this report’s intended use.
Selected Information
The scope of our work includes only the information included within Columbia Threadneedle
Investments’ Stewardship Report (“the Report”) for the year ended 31 December 2023 marked
with the symbol * (“the Selected Information”) (and also listed in Appendix 1).
We have not performed any work, and do not express any conclusion, over any otherinformation that may be included in the Report or displayed elsewhere on Columbia
Threadneedle Investments’ website for the current year or for previous periods unlessotherwise indicated.
Reporting Criteria
The Reporting Criteria we used to form our judgements are Columbia
Threadneedle Investments’ Reporting Guidelines as set out at columbiathreadneedle.com(“the Reporting Criteria”). The Selected Information needs to be read together with theReporting Criteria.
Inherent limitations
The nature of non-financial information; the absence of a significant body ofestablished practice on which to draw; and the methods and precision used to determine
non-financial information, allow for different, but acceptable evaluation and measurement
techniques and can result in materially different measurements, affecting comparability
between entities and over time. The Reporting Criteria has been developed to assist
Columbia Threadneedle Investments in forming an independent limited assurance
conclusion about proper preparation of the Selected Information. As a result, the Selected
Information may not be suitable for another purpose.
Directors responsibilities
The Directors of Columbia Threadneedle Investments are responsible for:

designing, operating and maintaining internal controls relevant to the preparation andpresentation of the Selected Information that is free from material misstatement,
whether due to fraud or error;

selecting and/or developing objective Reporting Criteria;measuring and reporting the Selected Information in accordance with the Reporting
Criteria; andthe contents and statements contained within the Report and the Reporting Criteria.

Our responsibilities
Our responsibility is to plan and perform our work to obtain limited assurance about whether
the Selected Information has been properly prepared, in all material respects, in accordancewith the Reporting Criteria and to report to Columbia Threadneedle Investments in the form of92

1 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

an independent limited assurance conclusion based on the work performed and the evidence
obtained.
Assurance standards applied
We conducted our work in accordance with International Standard on Assurance
Engagements (UK) 3000 Assurance Engagements other than Audits or Reviews of Historical
Financial Information (“ISAE (UK) 3000”) issued by the Financial Reporting Council. Thatstandard requires that we obtain sufficient, appropriate evidence on which to base ourconclusion.
Independence, professional standards and quality management
We comply with the Institute of Chartered Accountants in England and Wales (“ICAEW”) Codeof Ethics, which includes independence, and other requirements founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality andprofessional behaviour, that are at least as demanding as the applicable provisions of the
IESBA Code of Ethics. The firm applies International Standard on Quality Management 1
Quality Management for Firms that Perform Audits or Reviews of Financial Statements, orOther Assurance or Related Services Engagements which requires the firm to design,
implement and operate a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Summary of work performed
A limited assurance engagement involves planning and performing procedures to obtainsufficient appropriate evidence to obtain a meaningful level of assurance over the Selected
Information as a basis for our limited assurance conclusion. Planning the engagement involves
assessing whether the Reporting Criteria are suitable for the purposes of our limited assurance
engagement. The procedures selected depend on our judgement, on our understanding of theSelected Information and other engagement circumstances, and our consideration of areas
where material misstatements are likely to arise.
The procedures performed included:Examining the Reporting Criteria and understanding key assumptions and limitations;

Conducting interviews with Columbia Threadneedle Investment’s management toobtain an understanding of the key processes, systems and controls in place over the
preparation of the Selected information;

Examining the systems and process in place to generate, aggregate and report the
Selected Information, and assessing compliance with the Reporting Criteria;

Selected limited substantive testing of the Selected Information, including agreeing a
selection of the Selected Information to corresponding supporting information as
defined in the Reporting Criteria including engagement and voting metrics back tounderlying system records;



Recalculating the total engagement and voting metrics; and

Reading the narrative within the Report with regard to the Reporting Criteria, and forconsistency with our findings.

The work performed in a limited assurance engagement varies in nature and timing from, andis less in extent than for, a reasonable assurance engagement. Consequently, the level ofassurance obtained in a limited assurance engagement is substantially lower than theassurance that would have been obtained had a reasonable assurance engagement been
performed.

93

Stewardship report 2023

This report’s intended use
Our report has been prepared for Columbia Threadneedle Investments solely in accordancewith the terms of our engagement. We have consented to the publication of our report inColumbia Threadneedle Investments’ Stewardship Report 2023 for the purpose of Columbia
Threadneedle Investments showing that it has obtained an independent assurance report inconnection with the Selected Information.
Our report was designed to meet the agreed requirements of Columbia Threadneedle
Investments determined by Columbia Threadneedle Investments’ needs at the time. Our
report should not therefore be regarded as suitable to be used or relied on by any party wishingto acquire rights against us other than Columbia Threadneedle Investments for any purpose
or in any context. Any party other than Columbia Threadneedle Investments who obtains
access to our report or a copy and chooses to rely on our report (or any part of it) will do so at
its own risk. To the fullest extent permitted by law, KPMG LLP will accept no responsibility or
liability in respect of our report to any other party.

KPMG LLP
Chartered Accountants
15 Canada Square, Canary Wharf London
25 April 2024

The maintenance and integrity of Columbia Threadneedle Investments’ website is the
responsibility of the Directors of Columbia Threadneedle Investments; the work carried out by
us does not involve consideration of these matters and, accordingly, we accept no
responsibility for any changes that may have occurred to the reported Selected Information,
Reporting Criteria or Report presented on Columbia Threadneedle Investments’ website since
the date of our report.

941 About us2 E SG
integration

3 Engagement

4 Voting andcorporate
governance5 M eeting
ourclients’needs6 P romoting
well‑functioning
markets

7 Governanceandoversight

8 C
 onflictsof interest9 Review andassurance

Appendix 1
Selected Information for the year ended 31 December 2023:

Identifier

KPI

Unit of measure

1a

Total engagements

Engagements

1bIssuers engaged

Issuers

1c

Countries covered

Countries

2

Milestones

Milestones

3

Total meetings voted

Meetings voted

4aTotal proposals voted

Resolutions voted

4b

Votes against management

Percentage of
votes against
management

Units
1,424
867
45
217
7,046
76,173
16%

95

Contact us
clientsupport@columbiathreadneedle.com
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