Givaudan : Quest UK Pension Plan Implementation Statement

Engagement Policy Implementation Statement ("EPIS")

Quest UK Pension Scheme (the "Scheme")

Scheme Year End - 31 March 2023

The purpose of the EPIS is for us, the Trustees of the Quest UK Pension Scheme, to explain what we have done during the year ending 31 March 2023 to achieve certain policies and objectives set out in the Statement of Investment Principles ("SIP"). It includes:

1. How our policies in the SIP about asset stewardship (including both voting and engagement activity) in relation to the Scheme's investments have been followed during the year; and

2. How we have exercised our voting rights or how these rights have been exercised on our behalf, including the use of any proxy voting advisory services, and the 'most significant' votes cast over the reporting year.

Our conclusion

Based on the activity we have undertaken during the year, we believe that the policies set out in the SIP have been implemented effectively.

In our view, most of the Scheme's material underlying investment managers were able to disclose good evidence of voting and/or engagement activity, that the activities completed by our managers align with our stewardship expectations. We believe the activities completed by our fiduciary manager to review the underlying managers' voting and engagement policies, and activities align with our stewardship expectations. We believe that our voting rights have been implemented effectively on our behalf.

We delegate the management of the Scheme's assets to our fiduciary manager Aon Investments Limited ("Aon"), and we are comfortable with the management and the monitoring of Environmental, Social and Governance (ESG) integration and stewardship of the underlying managers that has been carried out on our behalf.

We have decided to take the following steps over the next 12 months:

1. To monitor Aon's efforts to engage with Legal & General Investment Management ("LGIM") and BlackRock to encourage better reporting.
2. To meet with Aon to get a better understanding of how voting practices and engagement with underlying managers helps us fulfil our Responsible Investment policies and how Aon uses its resources to effectively influence positive outcomes in our relevant funds.

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How voting and engagement policies have been followed

The Scheme is invested entirely in pooled funds, and so the responsibility for voting and engagement is delegated to the Scheme's investment managers. We reviewed the stewardship activity of the material investment managers carried out over the Scheme year and in our view, most of the investment managers were able to disclose good evidence of voting and/or engagement activity. More information on the stewardship activity carried out by the Scheme's investment managers can be found in the following sections of this report.

Over the reporting year, we monitored the performance of the Scheme's investments on a quarterly basis and received updates on important issues from our investment adviser, Aon Investments Limited ("Aon"). In particular, we received quarterly Environment Social Governance ("ESG") ratings from Aon for the funds the Scheme is invested in where available.

During the year, we received training on ESG and stewardship topics, and agreed our policies in relation to these.

Each year, we review the voting and engagement policies of the Scheme's investment managers to ensure they align with our own policies for the Scheme and help us to achieve them.

The Scheme's stewardship policy can be found in the SIP: giv-2020-quest-uk-pension-scheme-statement-investment-principles.pdf(givaudan.com).

Our Engagement Action Plan

Based on the work we have done for the EPIS, we have decided to take the following steps over the next 12 months:

1. While Legal & General Investment Management ("LGIM") and BlackRock provided comprehensive lists of their fund-level engagements, which we find encouraging, these examples did not give as much detail as required by the industry standard engagement data request template. Our fiduciary manager will continue to engage with these managers to encourage better reporting.
2. We will invite our fiduciary manager to a meeting to get a better understanding of how it is monitoring voting practices and engaging with underlying managers on our behalf, and how these help us fulfil our Responsible Investment policies.
3. We will undertake more regular meetings with our fiduciary manager if required, to ensure our fiduciary manager is using its resources to effectively influence positive outcomes in our relevant funds.

What is stewardship?

Stewardship is investors using their influence over current or potential investees/issuers, policy makers, service providers and other stakeholders to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.

This includes prioritising which ESG issues to focus on, engaging with investees/issuers, and exercising voting rights.

Differing ownership structures means stewardship practices often differ between asset classes.

Source: UN PRI

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Our fiduciary manager's engagement activity

We delegate the management of the Scheme's defined benefit assets to our fiduciary manager, Aon. Aon manages the Scheme's assets in a range of funds which can include multi-asset,multi-manager and liability matching funds. Aon selects the underlying investment managers on our behalf.

We delegate monitoring of ESG integration and stewardship of the underlying managers to Aon. We have reviewed Aon's latest annual Stewardship Report and we believe it shows that Aon is using its resources to effectively influence positive outcomes in the funds in which it invests.

Over the year, Aon held several engagement meetings with many of the underlying managers in its strategies. Aon discussed ESG integration, stewardship, climate, biodiversity and modern slavery with the investment managers. Aon provided feedback to the managers after these meetings with the aim of improving the standard of ESG integration across its portfolios.

Over the year, Aon engaged with the industry through white papers, working groups, webinars and network events, as well as responding to multiple consultations.

In 2021, Aon committed to achieve net zero emissions by 2050, with a 50% reduction by 2030 for its fully delegated clients' portfolios and defined contribution default strategies (relative to baseline year of 2019).

Aon also successfully renewed its signatory status to the 2020 UK Stewardship Code.

What is fiduciary management?

Fiduciary management is the delegation of some, or all, of the day-to-day investment decisions and implementation to a fiduciary manager. But the trustees still retain responsibility for setting the high-level investment strategy.

In fiduciary management arrangements, the trustees will often delegate monitoring ESG integration and asset stewardship to its fiduciary manager.

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Our underlying managers' voting activity

Good asset stewardship means being aware and active on voting issues, corporate actions and other responsibilities tied to owning a company's stock. Understanding and monitoring the stewardship that investment managers practice in relation to the Scheme's investments is an important factor in deciding whether a manager remains the right choice for the Scheme.

Voting rights are attached to listed equity shares, including equities held in multi-asset funds. We expect the Scheme's equity-owning investment managers to responsibly exercise their voting rights.

Voting statistics

The table below shows the voting statistics for each of the Scheme's material funds with voting rights for the year to 31 March 2023.

Why is voting important?

Voting is an essential tool for listed equity investors to communicate their views to a company and input into key business decisions. Resolutions proposed by shareholders increasingly relate to social and environmental issues

Source: UN PRI

	Number of resolutions	% of resolutions	% of votes against	% of votes
	eligible to vote on	voted	management	abstained from
LGIM - Multi-Factor Equity	11,712	99.8%	20.2%	0.1%
Fund
BlackRock - Emerging Markets	33,350	97.0%	11.0%	3.0%
Equity Fund
Source: Managers

Use of proxy voting advisers

Many investment managers use proxy voting advisers to help them fulfil their stewardship duties. Proxy voting advisers provide recommendations to institutional investors on how to vote at shareholder meetings on issues such as climate change, executive pay and board composition. They can also provide voting execution, research, record keeping and other services.

Responsible investors will dedicate time and resources towards making their own informed decisions, rather than solely relying on their adviser's recommendations.

The table below describes how the Scheme's underlying managers use proxy voting advisers.

Why use a proxy voting adviser?

Outsourcing voting activities to proxy advisers enables managers that invest in thousands of companies to participate in many more votes than they would without their support.

Description of use of proxy voting advisers

(in the manager's own words)

LGIM's Investment Stewardship team uses Institutional Shareholder Services' (ISS) 'ProxyExchange' electronic voting platform to electronically vote clients' shares. All voting decisions are made by LGIM

LGIMand we do not outsource any part of the strategic decisions. To ensure our proxy provider votes in accordance with our position on ESG, we have put in place a custom voting policy with specific voting instructions.

While we subscribe to research from the proxy advisory firms ISS and Glass Lewis, it is just one among many inputs into our vote analysis process, and we do not blindly follow their recommendations on how to vote. We primarily use proxy research firms to synthesise corporate governance information and

BlackRock analysis into a concise, easily reviewable format so that our investment stewardship analysts can readily identify and prioritise those companies where our own additional research and engagement would be beneficial. Other sources of information we use include the company's own reporting (such as the proxy statement and the website), our engagement and voting history with the company, and the views of our active investors, public information and ESG research.

Source: Managers

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Significant voting examples

To illustrate the voting activity being carried out on our behalf, we asked the Scheme's underlying investment managers to provide a selection of what they consider to be the most significant votes in relation to the Scheme's funds. A sample of these significant votes can be found in the appendix.

Our underlying managers' engagement activity

Engagement is when an investor communicates with current (or potential) investee companies (or issuers) to improve their ESG practices, sustainability outcomes or public disclosure. Good engagement identifies relevant ESG issues, sets objectives, tracks results, maps escalation strategies and incorporates findings into investment decision-making.

The table below shows some of the engagement activity carried out by the Scheme's material managers. The managers have provided information for the most recent calendar year available. Some of the information provided is at a firm-level i.e. is not necessarily specific to the funds invested in by the Scheme.

Funds	Number of engagements	Themes engaged on at a fund-level
	Fund	Firm
	specific	level
			Environment - Climate change
			Social - Human and labour rights (e.g. supply chain rights, community
LGIM - Multi-Factor	279	1,224	relations), Human capital management (e.g. inclusion & diversity,
employee terms, safety), Inequality, Public health
Equity Fund
			Governance - Board effectiveness - Diversity, Board effectiveness -
			Other, Remuneration, Reporting (e.g. audit, accounting, sustainability
			reporting), Strategy/purpose, and others.
			Environment - Biodiversity, Climate Risk Management, Environmental
			Impact Management, Operational Sustainability
			Social - Diversity and Inclusion, Health and Safety, Human Capital
BlackRock -			Management, Other company impacts on people/human rights, Social
Emerging Markets	450	3,886	Risks and Opportunities, Supply Chain Labour Management
Equity Fund			Governance - Board Composition and Effectiveness, Business
			Oversight/Risk Management, Corporate Strategy, Executive
			Management, Governance Structure, Remuneration, Sustainability
			Reporting
			Strategy, Financial and Reporting - Capital allocation, Reporting (e.g.
			audit, accounting, sustainability reporting), Financial performance,
Abrdn - Climate			Strategy/purpose, Risk management (e.g. operational risks,
44	2,484	cyber/information security, product risks)
Transition Bond Fund
			Other - Climate, Environment, Human Rights & Stakeholders,
			Corporate Behaviour, Corporate Governance
			Environment - Climate change
Aegon - European			Social - Conduct, culture and ethics (e.g. tax, anti-bribery, lobbying)
Asset Backed	132	441
Securities Fund			Governance - Board effectiveness - Diversity

Other - Proprietary ESG assessment

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