Shareholder Engagement Statement

Barclays Investment Solutions Limited (BISL) is a subsidiary of Barclays Bank PLC, which carries out, among other services, investment management activities, predominantly using multi-manager and fund-of-fund arrangements.¹

BISL delegate the selection of assets, including shares, to other investment managers, by either investing into a fund or by giving a number of managers a portion of the money raised to invest on our behalf. These third-party managers are selected via a due diligence process and are subject to ongoing monitoring. The due diligence process focuses on identifying managers that we believe could deliver competitive investment returns for our clients and create long-term value for stakeholders.

This statement provides BISL’s approach with regards to each requirement as set out under Article 3g of the European Shareholder Rights Directive II (SRD II) as implemented in the FCA Handbook at COBS 2.2B.

SRD II aims to promote effective stewardship and long-term investment decision-making via the enhancement of the transparency of shareholder engagement policies and investment strategies across the institutional investment community.

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.² 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 ESG considerations where appropriate. We believe companies that can better manage ESG considerations could be less prone to severe incidents such as fraud, litigation or reputational risks.

BISL became a signatory to the UK Stewardship Code in 2023, which sets high stewardship standards for those investing money on behalf of UK savers and pensioners and those that support them. According to the Financial Reporting Council (FRC), stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries with the aim of achieving sustainable benefits for the economy, the environment and society.

More details on our stewardship approach, specifically shareholder engagement, are set out in the BISL UK Stewardship Code Report.

Integration of shareholder engagement in BISL’s investment strategy:

• Whilst undertaking due diligence on the investment processes of the third-party managers that we appoint, we consider the nature and purpose of the shareholder engagement that may be undertaken. Third-party managers may engage on matters relating to environmental, social and corporate governance (ESG) developments; enhancements or clarifications to company analysis or process improvements.
• Where direct stocks are selected, BISL may engage with management or investor relations of investee companies, but not other stakeholders, as we do not hold significant positions. Where any material issues occur, either financial or non-financial, we would review the investment thesis to see if this has affected our investment rationale.

Monitor investee companies on their strategy, capital structure, financial and non-financial performance and risk:

• Our commitment to stewardship demands that the services we engage with effectively fulfil our responsibilities as responsible investors. The monitoring of external fund managers and service providers serves as a key pillar of this commitment. Through due diligence, evaluation, and engagement, we seek that our partners meet the standards we set.
• We are committed to integrating ESG factors into our investment process.
  • Where direct stocks are selected, our portfolio managers have access to third-party data providers for ESG considerations and this is the main tool for monitoring these risks.
  • Where direct stocks are selected, analysis is carried out on these companies. This may include financial and non-financial performance, risk, capital structure and corporate strategy. We use a wide variety of sources including company meetings, company reporting, broker research, industry reports and in-house research. BISL also have access to specialist research covering environmental, social and governance issues.
  • We appoint third-party managers that monitor investee companies on their strategy, capital structure, financial and non-financial performance and risk. We prefer investment processes that are structured and comprehensive, such as where the key investment professionals decide on the main risk exposures. To that end, we review information regarding the third-party managers’. This may include research process, portfolio construction, sell discipline and risk management process with the aim that these processes incorporate monitoring of investee companies’ strategy, capital structure, financial and non-financial performance and risk.
  • Where we appoint third-party managers, we do expect them to consider ESG factors within their investment process. Examples might be whether a fund manager has a view on whether an investee company has a well structured board, suitable labour relations or pollution controls. Furthermore, we seek to understand a manager’s awareness and incorporation of ESG considerations when constructing their investment philosophy and applying it. We expect all managers to be engaged with the management of their holdings on these topics in an effort to understand how their activities could impact on the sustainability and profitability of the business. We believe that incorporating ESG considerations in a manager’s approach is likely to reduce risk.

Conduct dialogues and communicates with relevant stakeholders of the investee companies:

• Stewardship through engagement and voting is an important part of our approach to Responsible Investing. As part of our commitment to being a Responsible Investor, we undertake engagement and voting² in partnership with our stewardship services provider, EOS.
• Through our partnership with EOS, we seek to highlight key ESG considerations, that we believe are material³ to the portfolio companies related to our holdings.² We monitor ESG considerations for investee companies that EOS engages on our behalf.
• For third-party funds, we may engage with the third-party managers on matters relating to environmental, social and corporate governance developments; enhancements or clarifications to company analysis or process improvements.
• We assess the information third-party managers gather to make their investment decisions, its quality and depth and the judgement the managers use in making investment decisions. This may include dialogue with the investee companies depending on the nature of the investment strategy, number of holdings and structure of the manager.
• BISL does support the principle of collaborative engagement. Our partnership with a leading stewardship provider EOS supports our engagement and voting activities.

Exercising voting rights and other rights attached to shares, cooperation with other shareholders and management of actual and potential conflicts of interests in relation to the firm’s engagement:

As a signatory of the Principles for Responsible Investing (PRI), we adopt a responsible approach to investing. ESG is an integral part of our selection and ongoing monitoring process, with each active manager assessed according to our own ESG criteria. Whilst we entrust our managers to take a responsible approach to investment, incorporated through for example, their investment process and actively engaging with companies they are invested in, we retain voting rights for our clients’ holdings – this includes both direct holdings within DPM and holdings within the segregated mandates that form part of BISL funds. This means we can continue being stewards of capital, with the aim of serving client interests.

BISL undertake engagement and voting in partnership with our stewardship services provider, EOS in respect of certain holdings relating to specific services.²

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.

Where we do exercise our discretion to vote for or against a particular proposal or cooperate with other shareholders, it will be in a manner consistent with its relevant investors’ best interests and when not in violation of anti-trust or any other laws or Barclays policies. Any actual or potential conflict of interests that may arise would be managed in line with the documented Barclays Group Wide Conflicts of Interest Management Standard, which is updated on an annual basis. All employees are expected to adhere to the Group wide Standard and receive training on this. Each division maintains a register of conflicts of interest, which is updated regularly.

BISL will update this statement on its website at least on an annual basis.