Responsible investing activities

Responsible Investing

Context and commitment

The purpose of this statement is to explain the approach of Barclays Investment Solutions Limited (BISL) to Responsible Investing (as explained further below). BISL has been appointed as the delegated investment manager by Barclays Asset Management Limited (BAML) for UK domiciled funds and by external management companies for the Luxembourg and Irish domiciled funds. BISL is responsible for making all day-to-day investment decisions on behalf of each fund range wherever it is domiciled.

As a long-term investor, BISL seeks to generate competitive returns for our clients as well as the creation of long-term value for all stakeholders.

For us, Responsible Investing means integrating Environmental, Social and Governance (ESG), considerations (among others) into our investment decisions and fulfilling our stewardship responsibilities through engagement and voting. As a long-term investor, we believe ESG considerations can impact portfolio returns, and so are relevant considerations in managing risk effectively and delivering successful investing outcomes for our clients.

These beliefs align with the Barclays’ values of Respect, Integrity, Service, Excellence and Stewardship which apply across the Barclays Group, including BISL. In addition, BISL is a signatory to the Principles for Responsible Investing (PRI) and to the UK Stewardship Code.

Overall approach to Responsible Investing

We seek to deliver competitive risk-adjusted returns for our clients and we believe Responsible Investing supports this aim.

We believe ESG considerations could impact the financial or operational performance of a business such that we think they may impact long-term investment returns. In considering these ESG factors, and consequently a broader set of data, we believe that this approach enables investors to make a more informed judgement about the financial performance and longer term viability of an investment. Therefore, as part of our investment process, we seek to incorporate foreseeable risks that arise from ESG factors.

A majority of the assets we manage on behalf of our clients are invested indirectly, through third-party fund managers.

Our partnership with EOS at Federated Hermes (EOS)

We recognise that our role as a responsible investor is to seek to positively influence companies’ long-term management of material ESG risks with the aim to protect shareholder value. Engagement and voting are one of our mechanisms to mitigate risks and seek to deliver competitive investment returns.

Our partnership with a leading stewardship provider EOS at Federated Hermes (EOS) in the UK, supports Wealth Management in engagement and voting activities.¹ EOS is a leading stewardship service provider that helps long-term institutional investors around the world to meet their fiduciary responsibilities and become active owners of public companies.

We believe that by EOS pooling resources of other like-minded investors, it creates a strong and representative shareholder voice, and makes company engagement more effective. EOS’ activities are based on the premise that companies with informed and involved shareholders are more likely to achieve long-term value, than those without.

We firmly believe in the concept of engagement and voting and through our partnership with EOS we can have more influence to engage with investee companies on long term risks and opportunities.

Engagement and voting

BISL undertakes engagement and voting in partnership with our stewardship services provider, EOS at Federated Hermes (EOS), in respect of certain holdings relating to specific services.¹ We view engagement and voting as an important mechanism through which to hold management to account and act as a lever to promote change in investee companies on material ESG considerations where appropriate. We believe companies that can better manage material ESG considerations could be less prone to severe incidents such as fraud, litigation or reputational risks. Voting forms an integral part of BISL's overall stewardship strategy and is used as a tactical tool to achieve desired changes on ESG considerations. Based on various metrics, BISL filters EOS's voting recommendations in relation to company holdings and, if deemed necessary, our portfolio managers may deviate from EOS's recommendation.

All voting activities sit alongside engagement practices, reflecting the BISL approach of promoting constructive dialogue with investee companies by building long-term relationships to seek to influence ESG and other practices. This is mostly undertaken by EOS, which engages on behalf of clients including Barclays with a wide range of stakeholders – including government authorities, trade bodies, unions, investors and NGOs – to seek to identify and respond to market-wide and systemic risks.

BISL makes its engagement and voting activities publicly available to all stakeholders on the Barclays website. We believe such transparency is an integral part of good governance.

Engagement and voting reporting

In our view, transparency is an integral part of good governance. We disclose engagement and voting activities publicly.

The following reports are produced in their entirety by our stewardship partner EOS at Federated Hermes (EOS) and provide summaries of engagement and voting activities for holdings within BISL DPM investment strategies and on holdings within segregated mandates that form part of BISL funds.

Please note the voting summaries reflect a blend of the vote recommendations of our stewardship provider EOS and our vote instructions,² rather than those that were actually cast.

Based on various metrics, BISL filters EOS's voting recommendations in relation to company holdings and, if deemed necessary, our portfolio managers may deviate from EOS's recommendation.

It is our intention to exercise voting in all markets, although at times our ability to do so may be hindered by regulatory and practical considerations, as well as internal restrictions. While we aim to vote on all resolutions, we may be unable to do so where there are operational barriers, internal or market restrictions. For example, we may be unable to vote due to restrictions relating to share blocking (markets where proxy voters have their securities blocked from trading during the period of the annual meeting), split voting (the ability to provide different instructions in relation to assets held in the same account) and partial voting (when only a portion of the total shares in an account is voted on).

Please note, not all reported activity will apply to individual accounts which deviate from our core strategy holdings, for instance where investment restrictions have been requested.

Please note all engagement and voting reports can be accessed by all stakeholders and types of investors, regardless if stated otherwise.

We review periodically the information included in the engagement and voting reports is accurate, up to date and complete, but we do not accept liability for any information that is not, or which has been superseded. If you use or rely upon the information in the engagement and voting reports, this is at your own risk, and nothing published in it is intended to constitute advice.