Engagement and Voting (reo)

Stakeholder Engagement: Enhanced value through active engagement

In 2000, F&C introduced its unique approach to responsible investment by launching its Responsible Engagement Overlay service, known as reo®. This differs from traditional ethical screening or a best-in-class portfolio construction methodology: it is an overlay that can be applied to any equity or corporate bond mandate, irrespective of whether the money is managed by F&C. It does not interfere with the fund manager’s portfolio construction or selection – in other words, it allows fund managers the widest latitude in defining their investable universe, while addressing sustainability concerns through active dialogue and changing behaviour.

F&C’s ultimate aim is the creation and protection of long-term capital value for investors. The objective of reo® is to use the influence that F&C wields through the combined equity and bond assets of all its clients to encourage investee companies to adopt better ESG practices and changes in corporate behaviour, thereby enhancing their business performance. We believe that we can best serve our clients and enhance the value of their investments through sustained and constructive dialogue with companies, as well as the judicious and transparent use of voting rights.

In an average year, F&C will engage with around 6,000 global companies on a wide range of business issues. reo® is currently applied to over £82.5 billion* (€92.5 billion / US$125 billion) of assets invested across over 50 national markets. (As at 31 March 2010)