AmazonScience/document-haystack

1Involvement of our Research Institute2Our Research Institute is responsible for producing research on key investment themes, ESG 3thematic reports and DWS’s long view ten-year return forecasts. The team acts as a key 4channel for delivering thematic research reports produced in the investment teams across the 5Group. In 2023, the ESG Thematic Research team continued to publish reports on solutions to 6European Transformation such as electrification of transport, alternative fuels, energy 7efficiency, and direct lending to small and medium sized companies. The Research Institute 8also continued its focus on nature by publishing articles on fresh water and the oceans and 9the first of a series of reports on biodiversity focused on regulations. The third report on ESG 10in Strategic Asset Allocation was also published. Reports were also published to support new 11Xtrackers product launches on thematic investing, green infrastructure, semi-conductors, 12cybersecurity, critical technologies and navigating the climate indices as well as European 13carbon allowances.14Opportunities and Risks15Human Rights and Norm Assessment16In recent years, countries such as Germany, France, UK, and Australia made laws on 17corporate accountability for topics such as human rights, which require larger companies to 18identify risks related to violation of human rights and environmental destruction. The United 19Nations Guiding Principles on Business and Human Rights clearly expect companies to 20operate to a higher international standard where national laws do not sufficiently respect 21human rights.22Investee companies can have an impact on the human rights of their employees and workers 23along their value chain as well as local communities. We incorporate the obligation to 24consider human rights issues in relevant internal policies and frameworks. Additionally, our 25norm assessment incorporates, among other factors, human rights controversies. These 26norm assessments are available to our investment professionals so that they can integrate 27these signals and material risks into the preparation of engagement discussions, investment 28research analysis and subsequently into investment decision making. Furthermore, we also 29carried out thematic engagements on human rights in Myanmar and Belarus in 2023. Please 30refer to the next section for respective international norms and guidelines applied in the 31process. 32ESG Data33Given the rapid changes taking place in the world of ESG, we have processes in place that are 34designed to incorporate changes into the ESG Engine in a reasonable time. Such processes 35are required, for example, to enable us to meet specific client needs, or comply with 36developments in regulatory reporting requirements. The processes are run by the ESG Engine 37and Solutions Team and under the governance of the ESG Methodology Council. 38Targets and Measures39Incorporation of ESG in the Active Investment Process 40Our policies and procedures are regularly reviewed and updated where necessary. The 41Investment Division’s policies and statements are guided by the PRI Initiative, client needs, 42regulatory requirements, other initiatives and stakeholder views including NGO’s. 43Some of these policies and statements apply globally, others are regional and/or national in 44scope or only applicable to certain portfolio management teams. The applicability is a 45function of the nature of the matter concerned and and relevant market standards. 46Investment professionals, for the relevant legal entities within Active, are subject to the ESG 47Integration Policy for Active Investment Management. Jurisdictional differences, as well as 48different regulatory requirements, may lead to differences in the implementation of the policy. 49However, our investment professionals are expected to be aware of material ESG matters 50and, subject to the foregoing differences to comply with internal processes and legal, 51contractual, and regulatory obligations.52Stewardship53The Corporate Governance Center54In line with our commitment to fostering good corporate governance and in accordance with 55our stewardship approach for our largest management companies in Europe (DWS 56Investment GmbH, DWS Investment S.A. and for specific portfolio management mandates of 57DWS International GmbH), we sent an annual pre-season letter to more than 3,700 investee 58companies early in the year. The letter elaborated on key changes to our Corporate 59Governance and Proxy Voting Policy prior to the proxy voting season. During the 2023 proxy 60voting season, we raised questions at a total of 70 shareholder meetings, as published at 61https://www.dws.com/en-gb/solutions/sustainability/corporate-governance/62. The team also 63sent individualised post-season letters to more than 850 of our investees. These letters 64highlighted where we voted against management recommendations that failed to comply 65with the DWS Corporate Governance and Proxy Voting Policy.66One of our priorities in 2023 was to progress on our 2020 net zero commitment. In support of 67our ambition, we continued to send thematic engagement letters to 80 additional companies 68with high WACI portfolio contribution in 2023. In the letter we set out our expectations, 69informed the companies of our voting strategy and requested detailed information about their 70        71To our Shareholders Summarised 72Management Report73Consolidated 74Financial Statements Compensation Report Corporate Govern-75ance Statement76Supplementary 77Information DWS 2023 Annual Report78 79Our Responsibility8032 Sustainable Action