Letters to Investee Companies
Each year we send out various letters to investee companies and request to have a constructive dialogue. The letters address changes to our corporate governance and proxy voting policies, as well as developments in our governance and ESG activities or expectations on focus topics (thematic) such as net zero and human rights.
We at DWS Investment GmbH (DWS) remain fully committed to fulfill our duties as a fiduciary and we aim to protect the assets entrusted to us by our clients. Therefore, we continue to promote sound, robust governance standards and responsible transformations of business models. As a global fiduciary, we regard it as our responsibility to address challenges in the market.
Thematic engagement: DWS Coal Policy
In line with DWS’ commitment to drive towards net zero emissions in our portfolios well before 2050, DWS introduced the DWS Coal Policy in 2023. Guided by the science-based timelines for the phase out of thermal coal under the International Energy Agency (IEA) net zero pathway, our Coal Policy outlines specific actions, including investment restrictions and engagement strategies. We expect companies with a coal share of revenues between 5% and 25% to accelerate their phase-out from coal and publish transition plans by end of 2025 at the latest.
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Letters sent to 27 companies in the utility and coal mining sectors in December 2023.
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Our thematic engagement activities and follow-up dialogues with these companies aim to determine whether investees are committed to phasing out thermal coal activities and to encourage them to publish credible transition plans for implementing this coal phase-out by 2025 at the latest.
DWS relies on the active dialogue with investee companies in order to support positive transformation. We have identified 3 topics and sent letters to the management to explain our concrete corporate governance expectations. Based on these requirements, we design further engagement steps and also define escalation levels. We regularly report the results of our corporate governance activities in our Active Ownership Report.
We at DWS Investment GmbH (DWS) remain fully committed to fulfill our duties as a fiduciary and we aim to protect the assets entrusted to us by our clients. Therefore, we continue to promote sound, robust governance standards and responsible transformations of business models. As a global fiduciary, we regard it as our responsibility to address challenges in the market.
Thematic engagement: Net-Zero by 2050
We expect companies that face substantial climate transition risks to accelerate their efforts in setting ambitious emission reduction targets and providing enhanced transparency on their roadmap towards climate neutrality.
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Letter sent to more than 220 companies from various industries worldwide in June 2021.
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Analysis focuses on Scope 1 and 2 emissions, climate transition risk rating, and Climate Action 100+ Net Zero Benchmark constituents
Thematic engagement: Human rights situation in Myanmar and Belarus
The significant deterioration of the human rights situation unfolding in Myanmar and Belarus in 2020 and 2021 is of great concern to DWS. The authorities’ policies of repressing and ideologically controlling the society also poses an increased risk to the private sector. Accordingly, it is crucial that corporations with direct operations, supply chains or other business relationships put heightened emphasis on these issues to seek to ensure compliance with principles and guidance on human rights and responsible business conduct (e.g. International Bill of Human Rights, European Convention on Human Rights, United Nations Guiding Principles on Business and Human Rights, OECD guidance on responsible business conduct and human rights and UN Global Compact principles).
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We have sent out 38 thematic engagement letters to companies operating in these countries. DWS initiated follow-up engagements throughout 2022 and beyond.
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Our thematic engagement activities aim to understand the investee companies’ established human rights due diligence processes, including the assessment of adverse human rights impacts and how violations are addressed, mitigated and prevented through their actions. It is important for us to have transparency on how they protect their employees and support the protection of human rights in general.
Thematic Engagement on Human Rights - Myanmar Thematic Engagement on Human Rights - Belarus
Our involvement in annual general meetings
Based on our continuous corporate governance activities and in line with our fiduciary duty, we have sent the following questions to the boards of some of our portfolio companies in written form:
Corporate Governance Services
DWS Corporate Governance and Proxy Voting Policy - Core Values
Boards of Directors
- Qualified, experienced, diverse and independent directors are mandatory for competent boards for an efficient decision-making process and long-term sustainable company performance. We understand diversity as a broader concept that encompasses gender, age, nationality, professional background, qualifications, and tenure:
- extended transparency requirements on directors: CVs and board meeting attendance should be disclosed on the website
- 50% or more of the board members should be independent
- tenure is considered as a critical factor for independence (max. 10 years)
- mandatory age limit set by the company is supported as to ensure a regular board refreshment
- separation of CEO and Chairman roles is supported for an appropriate balance of power and impartiality
- a direct and clear responsibility on ESG matters should be assigned to a director in the board
- The ESG performance assessment by external rating agencies influences DWS’s voting decisions on re-elections and the discharge of the Board of directors
- Board members need to spend sufficient time and have an appropriate degree of ‘independence in mind’ in fulfilling their responsibilities as directors:
- maximum 3 board seats for executive directors
- maximum 5 board seats for non-executive directors
Executive Compensation
- Transparency and comprehensibility on qualitative and quantitative performance indicators are necessary to allow sufficient oversight of remuneration systems
- Balance between fix and variable pay and appropriateness of total pay need to be ensured
- Integration of material ESG linked performance indicators into the remuneration of board members
- Relevant peer /pay comparison should be considered
- Regular say-on-pay should take place as an important shareholder right
- Relevant and adequate bonus-malus and claw-back mechanisms and reasonable deferral periods for executives need to be in place as key elements of a sustainable long-term oriented compensation structure
Shareholder Rights
- We support the ‘one-share-one-vote’ principle and do not support voting caps
- Interests of minority shareholders should be properly considered and necessary measures should be put in place
- We support improved reporting practices on shareholder relevant information
Auditors
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Key elements of appropriate disclosure as the term of appointment of the lead audit partner as to demonstrate his/her independence and objectivity: max. 5 year rotation for the audit partner
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Disclosure of the non-auditing services and the appropriateness of the related fees to validate the independence of the external auditors
- The audit firm has to be rotated after 10 years to ensure independence and objectivity
ESG Issues
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Consideration of international standards regarding the ESG disclosure (e.g. TCFD, SASB, GRI, IIRC, SBT
- Compliance with international standards and frameworks, such as: CERES-Principles, UN Principles for Responsible Investments (PRI), UN Global Compact, OECD Guidelines for Multinational Corporations, Cluster Munitions Convention und der UN Sustainable Development Goals (SDGs), the Carbon Disclosure Program (CDP), ILO-Norms, Human Rights, Modern Slavery Act Consideration of severe ESG controversies in our voting decisions when it comes to the re-election or the discharge of directors
- The ESG performance assessment by external rating agencies influences DWS`s voting decisions on re-elections and the discharge of the Board of directors
- Support of relevant ESG-related shareholder proposals
Corporate Governance and Proxy Voting Policy (2024)
Corporate Governance and Proxy Voting Policy (2023)
Corporate Governance and Proxy Voting Policy (2022)
Active Ownership: Engagement & Proxy Voting Report (2022)
Active Ownership: Engagement & Proxy Voting Report (2021)
Active Ownership: Engagement & Proxy Voting Report (2020)
The DWS commitment to stewardship is demonstrated by the official recognition of DWS Investments UK Limited as a UK stewardship code signatory.
In order to ensure effective and efficient fulfillment of the associated obligations, the relevant processes and facilities are organized centrally and carried out by the affiliates within the DWS Group or made available to them.
Statement of Compliance with UK Stewardship Code 2021
(nur in Englisch verfügbar)
DWS commitment to Stewardship is exemplified by the recognition of the UK-entity DWS Investments UK Limited as signatory to the UK Stewardship Code. To allow for an effective and efficient fulfillment of the related obligations, relevant processes and set-ups are organized centrally and are provided by and to other entities within DWS Group.
Statement of Compliance with UK Stewardship Code 2021
Voting results
Corporate Engagement Process
We follow a stringent step-by-step approach in order to engage with our portfolio companies
*Notice:
Corporate Governance is conducted for DWS Investment GmbH, DWS Investment S.A. and for specific portfolio management mandates of DWS International GmbH.
The primary responsibility for the engagements and the exercise of voting rights outlined on this website lies with DWS Investment GmbH. To ensure an effective, efficient and consistent process, the following DWS legal entities have delegated the voting rights of their funds (in case of DWS Investment S.A.) respectively their institutional mandates (in case of DWS International GmbH) to DWS Investment GmbH:
- DWS International GmbH (applicable to mandates where the voting rights have been delegated by the institutional client)
- DWS Investment S.A
Reflecting our fiduciary duty to our clients, the exercise of our voting rights is made fully independent from any views or interests of our principal shareholder Deutsche Bank AG and other DWS legal entities.