9 Ways Investors Use Esgaia’s Platform to Meet Requirements in the Swiss Stewardship Code

In October, the Swiss Stewardship Code was launched. Across nine principles, the new code provides the Swiss asset management industry with guidance on responsible investment stewardship and how actors should engage with companies and other entities to encourage sustainable development and long-term value creation. This blog post discusses its core principles and how Esgaia's platform can help investors meet requirements.

It was released by the Swiss Asset Management Association (AMAS) and Swiss Sustainable Finance (SSF), two organisations with jointly several hundred members and network partners. Ranging from guidelines on governance and resources to voting and engagement, the code has been aligned with key global and national standards, particularly the Global Stewardship Principles of ICGN, UN PRIs framework, and the UK Stewardship Code. It is applied on a voluntary basis, meaning the recommendations are non-binding. 

The code contains the following principles:

• Principle 1: Governance

• Principle 2: Stewardship Policies

• Principle 3: Voting

• Principle 4: Engagement

• Principle 5: Escalation

• Principle 6: Monitoring of Investee Entities

• Principle 7: Delegation of Stewardship Activities

• Principle 8: Conflicts of Interest

• Principle 9: Transparency and Reporting

Access the code here

Governance structure and processes:

To ensure oversight, monitoring and accountability for effective stewardship, investors should explain their governance structure and processes, as well as assess, review and improve its effectiveness regularly.

Using Esgaia, clients can: 

• group users together by defining roles and permissions,

• implement a review process for recorded efforts, and

• define one or more templates for engagements and activities, tailored for example to different teams or asset classes.

Voting:

Investors should define and disclose the overall process for arriving at voting decisions or recommendations, making sure that votes are made in a well-informed and responsible manner, and that the rationale should be disclosed to clients if requested.

On Esgaia, clients can increase voting and engagement alignment by linking votes to objectives, and use it for analytics and reporting. This enables investors to bring information together to access data in one place. 

Individual Engagement

Investors should define their own engagement topics, identify relevant and measurable KPIs, and include the purpose and the process of engagement activities based on the positive and long-term sustainable outcomes they aim for.

One of Esgaia’s modules is the Engagement Tracker, which provides a purpose-built system for the recording, monitoring, and reporting of engagement objectives and activities. This empowers investors to optimise the workflow and enhance data quality. 

Collaborative Engagement

Investors should define the relevant collaborative engagement initiatives and/or coalitions they are joining and/or forming, and the rationale to do so, as well as to outline the outcomes based on predefined time-bound KPIs (if available).

The Esgaia platform can be used by individual clients to track collaborative dialogues, and by engagement initiatives as a central repository for engagement data management and coordination. We are committed to helping empower increased collaboration among investors through technology.

Public Policy Engagement

To adequately perform public policy engagement, investors should assess and review the effectiveness of the public policy engagement approach and objectives regularly to inform further engagement actions and investment decisions.

To keep track of related efforts, in Esgaia, it’s possible to add entities other than companies. Meaning clients can link stewardship activities to different organisations, either by adding individual organisations, or by grouping stakeholders together such as:

• ‘Clients/beneficiaries’, 

• ‘Industry stakeholders’, 

• ‘Civil society (e.g. NGOs, Academia, Trade associations)’, 

• ‘Public sector (e.g. policy consultations, governments)’

Escalation

The code states that investors should e.g. define the relevant engagement activities used in case of escalation.

Using our platform, clients can easily flag certain interactions as part of an escalation strategy by implementing a dedicated custom field in activity templates. By linking these efforts to objectives over time, investors can implement a systematic approach with complete data trails and activity timelines.

Monitoring of Investee Entities

Investee entity monitoring should be integrated with the investor’s engagement programme, and where investors have separate stewardship, research, portfolio or investment management teams, these teams should fully align to maintain consistent communication with investee entities. It also notes that where both debt and equity is held, both the fixed-income and equity teams should consider the benefits of joint engagement across asset classes.

Esgaia’s platform is used by both ESG and stewardship teams, as well as the investment departments. Importantly, clients customise their workspace to fit their needs, including establishing aforementioned review processes, templates and custom fields of interest. Together with the automatic link of funds to engagement targets, this empowers investors in their coordination and information sharing, providing a sound structure to stewardship data management.

Delegation of Stewardship Activities

Asset owners should describe how they oversee the activities carried out by delegated parties and how they monitor them.

Aside from due diligence processes and questionnaires, Esgaia’s platform can support clients in evaluating manager stewardship to assess if policies and practices match up. That is, by using Esgaia to implement a workflow for data retrieval, analysis/comparison, and aggregation for reporting purposes.

Transparency and Reporting

Investors should regularly, and at least once a year, publicly publish a stewardship report, including e.g. the main stewardship priorities of the past year, the main topics addressed with investee entities in governance and sustainability engagements, and the progress made on the set stewardship priorities.

Reporting is a primary use case in Esgaia. Using the platform, clients save time in their reporting strategy with purpose-built analytics, data visualisation, and export features. And with our Engagement Disclosure Service (engagement data provided through website plugin), investors can access a cost-effective solution to better tell the stewardship story.

View this video for a quick overview of reporting capabilities:

//The Esgaia Team