In this latest episode of the Green Dream, Matt Crossman, stewardship director at Rathbones and member of the PA Future Committee, talks about the enlightenment he has had while working a four-day week over the past decade, sharing positive messages at AGMs and why his involvement with UK energy policy is a result of an investor challenge.
Watch the full video interview above and read the transcript below.
NK: Hello and welcome back to the Green Dream. I’m Natalie Kenway and today I’m joined by Matt Crossman who is stewardship director at Rathbones.
He’s also been a member of the PA Future Committee since we launched that some four to five years ago. So thank you so much for your time and all your support for the publication. Matt.
MC: Oh my pleasure. It’s been great to be involved over the years.
NK: To kick us off, please give us an overview. firstly, on the bones approach to engagement. What would you say is in your toolkit?
MC: Thanks, Natalie. I think with engagement, it’s really important to be clear about what you do and how you do it. The core responsible investment principle we have as part of our responsible investment policy, we call it ‘engagement with consequences’. Our engagement is to be constructive in that sense, to have a dialogue towards purpose. So without movement we will trigger different actions. We’re very clear that, engagement just isn’t a talking shop. In terms of the toolkit and how we make that happen, it’s what everybody has in a sense – it’s dialogue, it’s one on one, it’s collaboration. It’s all the different kind of methods and levers that we have to pull.
But I think where we try and differentiate ourselves a little bit is to get more involved in working on filing resolutions and attending AGMs, using shareholder rights that we have. We put a lot of effort into them. We co-filed the Shell resolution on Scope 3 this year. We were also involved with Barclays, which was one that actually was successfully negotiated with the company.
Interestingly, we’ve been prioritising attending some AGM to give a real positive message. I think sometimes AGM attendance can be, a little bit of a negative thing. Whether it’s good slavery project [or something else], this year we’ve been making sure we’ve shown up to one or two of the AGMs to give that positive news to the board, and say, we’ve seen really good progress and to give them that public pat on the back as it were.
Engaging with consequences is how we describe it.
NK: That’s fantastic, so there’s lots of different ways to apply that pressure and implement change. And attending AGMs for positive reasons is really interesting. We’ve certainly heard a lot more about attendance, but not in the way you say to give that a pat of the back. So that’s really interesting.
And, you touched on the Votes Against Slavery engagement Initiative. Could you tell us a bit more about that? It was launched five years ago – what have you achieved in that time?
MC: This is the fifth year that we’ve run this project. And if people aren’t familiar with it, essentially it’s providing accountability under the Modern Slavery Act in the UK.
So Rathbones back in 2013-14 and a number of others were one of the key voices asking for corporate accountability to be included in the Modern Slavery Act and what this look like with something called section 54, where every company over a certain size in the UK has to report on what they’re doing to combat modern slavery through things like training and supply chain, due diligence, etc. but we saw there was like a real gap in enforcement, so a lot of companies didn’t know they should be reporting.
Even the FTSE 100 companies weren’t reporting, according to the letter of the law. There wasn’t much enforcement going on with government. Me and my team, we sat down and were asking for this to be as it’s not working very well – what are we going to do about it?
We worked with the Office of the Independent Anti-Slavery Commissioner back in 2018, and we wrote to 700 companies that we’d identified that weren’t meeting the letter of the law. It was amazing. For someone like me who’s worked in engagement for a little while, where everything seems to take forever, it’s like seeing a cruise ship turning around. The phone just started ringing off the hook, and suddenly we found this way into these companies where we’ve said, look, we’re going to vote against your report and accounts if you don’t sort this out. Suddenly everyone wanted to talk to us, and we quickly sort of used that evidence from testing an idea in a small way and ramped that up.
In the first year of Votes Against Slavery, we had about 15 investors. In terms of how it’s grown it’s now 154, across the whole of Europe. That’s an amazing amount of assets under management, its about $3trn this year. We’re hoping to get that up again next year with a few key people we know are coming back on.
Every year we see about 20 to 30, FTSE 350 companies be compliant with the law. But what we also see is that we have really in-depth conversations with them. Then there’s a certain trust developed where we’re able to see them really develop their broader human rights due diligence. And it really complements with this other project we’re involved in with CCLA, which is called Find It, Fix It, Prevent It, which focuses a bit more on what companies are doing in a much more focused way.
The analogy we always give is for a lot of people listening, when you have done a Park Run and you’ve got marshals telling you where the start line is, you’ve got marshals out on the course telling you the way to go. Well, Votes Against Slavery, are telling the companies they should be in the race. They should be working on all this human rights stuff. Find It, Fix It, Prevent It, is helping them run the race. We feel we’ve achieved a lot. We see this level of compliance every year, but we’re not kind of kidding ourselves that that’s legal compliance. It’s actually quite a low level of compliance. So yeah, we’re really hopeful actually going into the future for some reworking of the guidance around Section 54, and really hopeful for the impacts of mandatory human rights due diligence on the wider issue.
But yeah, really proud of the coalition that we’ve built. They’re certainly sending that message to UK plc that investors expect action against modern slavery.
NK: But it’s wonderful to hear about the progress made there. Thank you very much. And I understand there’s more collaborative initiatives going on at Rathbones and some around food as well. Perhaps you could explain that and some of the other core themes or engagements this year.
MC: In terms of the sort of core engagement themes for us, we try and break them down by ESG pillar. Every year we try to focus on a, a more of a narrow set of discrete thematic engagements every year to make sure we’re making some deep progress on some of those areas. In terms of the environment pillar, we look at net zero as a lot of people will.
A more recent one has been a pillar on nature and biodiversity. And we’re trying to pick up a bit of policy engagement in that pillar. we’re doing an engagement at the moment on UK energy market reforms, specifically around grid readiness for net zero. On the S pillar, obviously, we’ve mentioned a bit already modern slavery that continues, but we’ve also been looking at mining and social license.
And this is very much interpreted or informed I guess, by a lot of our net-zero engagements, actually, in terms of the energy transition, we’re going to see we’re going to need to mine a huge amount more material. And how is that going to be done in a way that’s positive for those communities and host countries? That’s a really interesting one.
Finally on S, we’re doing a project that works, with the corporate human rights benchmark that’s run by the World Benchmarking Alliance, where we’re engaging to companies that haven’t reported to the corporate human rights benchmark.
Not forgetting governance, I think one of the key messages we have from our friends in and this out is we don’t sleep on the governance.
Governance is often forgotten, I think, in the ESG because it happens to be last in the acronym. But you can’t it doesn’t matter how good your transition plans are on the environment, you haven’t got good corporate governance, it’s going to fall on its face. So, focusing on governance has been a key for us in the last few years.
Actuallym, recently what we’ve been seeing and what we have adopted as a thematic goal was to work with some of our smaller companies, some of our earlier stage investments, encouraging them to adopt best practices, corporate governance policies on things like diversity, inclusion, having an annual say on pay vote and making sure all of their key board committees are independent.
And within that, you know, we’re supported by the, Rathbone Greenbank brand, and they are leading an engagement on food as you mentioned. So, a huge amount going on, but we’d like to try and focus on several issues to make real progress within a 12-month period as well.
NK: Well, that’s fantastic, there’s, plenty for you to be getting on with. I read recently, I’m a fan of your LinkedIn post, so, and I noticed that you posted about the UK’s net zero policy and that you’re engaging on that particularly pertinent with the elections coming up now. Tell us a bit more about that.
MC: this was borne out of a dialogue where for many years we’ve been leading engagements with some UK companies as part of the CA100+ [ClimateAction100+], which is part of the IIGCC. And we got to a place with some of these more leading companies where they were saying to us, look at the next steps required for them is coordinated action at a policy level.
There was a challenge that came actually from the companies to say, rather than asking us about how we’re performing on section three point B of this particular framework when we’re broadly in line, and we broadly agreed that we’re going the right direction, actually, what do you can do to help shape the policy environment, to enable good companies to thrive?
And it was a real challenge back to us. So we rolled up our sleeves really and said, look, we’ll try and get involved in policy work around energy policy because that’s still going to be the key thing. I think a lot of people listening, a lot of people will be wrestling with their own science based targets, wanting to increase that centage of portfolio companies in the UK portfolio that have got credible net zero targets.
Well, we’re not going to get there unless we rapidly electrify and if we decarbonise the energy system. whether that’s the Conservative Party goal of decarbonising the energy system by 2035, or the more ambitious Labor Party goal of 2030, we know there’s a lot of issues that need to get sorted out if it’s going to happen. So speaking very briefly on what is a very of complicated topic- we’re talking grid connections, can renewables get on the system quickly enough? We hear stories of projects being delayed upwards of 14 years. Projects with backers, with finance, but just can’t get the grid connection, and then the issues of pricing, which is a bit thorny. And issues of planning. There’s nothing really very simple about it, but there are a lot of very compelling reforms which could simultaneously unlock investment and innovation, bringing opportunities for investors whilst improving energy security and bringing bills down. So, we’re really excited to push hard on this. Not so much pre-election, but certainly post-election. I think whichever government we get and whether it’s a 2030 or the 2035 goal, we needed to step up on the simple things like what’s known as the spatial plan, basically planning for where, the energy generation, the transmission is going to be, but also grid upgrading, and they’re all making the right noises.
But I definitely think, a strong investor voice on this will be something that will really help accelerate action.
NK: Yeah. Its interesting. we are increasingly seeing that, reports around the UK does need to step up, like you say, or it risks being left behind. We need something like perhaps the US Inflation Reduction Act or something similar to that would be would be good from whoever is the next government.
I also wanted to pick up on something around the importance of collaboration when it comes to engagement and pushing for change. It’s been suggested to us that that can sometimes set a low bar, holding back companies that could perhaps push for more. What was your response to that?
MC: We have wrestled with these issues for a number of years.
Like any sort of collective endeavour, you get across positives to the approach and negatives to the approach, and I think it’s really important to go into it with your eyes open. All collaborations, the success of it comes down to the collective level of effort and energy. I would hope to say that whenever Rathbones gets involved in a collaborative effort, we raise the bar and we raise the effort and the energy levels.
I think that’s why we as a team, we’ve been asked to lead some of those bigger strategic engagement moves over the years. So going back to co-leading on Shell in 2015, 2016, we were very much asked to step up on that, despite the fact we were a very, very small shareholder. And that led to the first ever board supported resolutions on climate back in 2016.
And also these days, why we lead with the likes of Glencore through CA100+ plus. Yes, I do think about where we get involved. We like to we do like to raise the bar. But look with any collective action, I think there’s some real key questions you need to ask before you, before you can make progress.
I was really privileged to speak at PRI conference in Barcelona a couple of years ago on this very topic. And I think collaborative engagements needs to ask themselves six questions, and they’re pretty simple. But once you get them, they actually lead to a lot of accelerated progress. So just simply: why do we exist? What do we do? How do we behave? How will we define success? What’s most important right now? So getting a sense of tactical strategic in it and deciding who must do what. And I think having that regular review of and asking yourself these six questions really leads to success in there. There’s risks with any collective endeavour. It comes at a low bar, but certainly where we’ve got involved, we’ve looked to make the most of those opportunities just by making sure that we’re aligned strategically so we don’t trip over ourselves, as it were.
NK: I wanted to pick up again on something you posted on LinkedIn. You mentioned that you do a four day working week for a decade now, which I have to say is somewhat unusual for a someone in the city, especially a man. What would you say are the benefits to you for that? And for your employer?
MC: Yeah, It has been a bit weird to have been doing that for over ten years. And actually, for me, what was even weirder was I didn’t have it triggered by kind of family life, I did it before I met my wife, before I got married, before I had kids.
There’s been a huge amount of benefits for me. I came back from a sabbatical where I wrote a book, and I really wanted to explore this with by my lead manager. He was also doing a reduced working week, and at the time he’d seen that I wasn’t really thriving.
It seemed that I had a lot of interests outside of work – I’d helped found a charity, I was running a local microfinance group – and he said, look, why don’t you explore taking a bit of time in your working week, go down to four days a week and you’ll bring a lot of benefits back into your role.
So I trialled and it just worked for me. I’ve managed to keep hold of it and been promoted a fair few times on top of it and kept hold of it. Some of the benefits for me, is it creates a huge amount of extra head space. I get a lot of fulfilment from doing different tasks outside of my teams, my project board and my inbox. I think ESG engagement, it rarely gives you these massive, satisfying job done moments when you’re engaging on climate change, biodiversity loss, modern slavery. It’s constantly fighting and things are always changing, and you very rarely get key moments where you feel that you’ve actually achieved something.
So some of the stuff I do on my outside, my other roles, my trustee role or even something as simple as doing a bit of gardening, it can actually really help your mental health to feel like you’ve achieved something.
I think there’s something about the way that our brains work. And now we’re now kind of plugged into this hyper connected hive mind, and we all seem to take for granted that that’s what really good work looks like, just constantly answering emails, constantly answering messages…I try and consciously disconnect from that on my Fridays off, and to try and take a bit of time for deep learning and for thinking. And what I’ve found is that when I stop and disconnect, my subconscious mind is like working on stuff. My team, they have a little joke about my email in himself. This is so silly, but if I’m out and about, I’ll drop the kids my son off at school and I’ll be walking back to the car just listening to the birds in the trees or whatever, and then something will come to me – I haven’t tried that strategy or I haven’t connected those two people. That’s your superpower if you’re on a four-day week, if you’re really brutal about the boundary of your time, if you commit to never logging on when you shouldn’t be, then everybody else I’ve found respects your time. If you set the boundary, everyone respects it, if you don’t, they won’t.
But that’s your superpower. So yeah, when I get back on Monday, I’ve got like usually 2 or 3 emails from myself reminding me of key little strategic things that I can try. especially in ESG and I think this is something we wrote about on the site earlier on in the year, how do you work in ESG without getting burnt out? Well, finding time to rest and think and be creative away from the desk and away from the big issues. Actually, I’ve mentioned Votes Against Slavery on this call. It was borne on a walk one day. Just an idea came to the mind and thought we haven’t tried that. And then my colleague Archie Pearson, he’s been working with me for a little while, we had a virtual coffee and discussed it away from any kind of interruptions.
There’s been some really good moments with that. The final thing I’d say on it is four days isn’t for everybody and not necessarily for every organisation I don’t think. But there are a lot of the research shows a huge amount of benefits.
Everybody I know who’s tried it, and has been brutal about setting boundaries has really flourished, and I recognize that others have struggled with it. Perhaps they’re the ones they end up feeling like they work five days and only get paid for four. I think the crucial thing is boundaries. My employees really encouraged it and they’ve obviously allowed me to keep that arrangement all the way through.
I’ve just found it to be a huge positive. I feel mentally at high capacity most of the time.
NK: That is so interesting. Thank you so much for sharing that with us. I love that it’s your superpower. And yes, that was another great article that you wrote for us about burnout. So thank you very much for sharing all those insights with us.
We always in the Green Dream with this question, what is your favourite sustainable drink or snack?
MC: I’m actually struggling with my old long Covid, so I’ve had to cut down on my drink selection. But my favourite I want to nominate here is by Bristol Beer Factory and it’s called Clear Head IPA, which is an absolutely amazing low alcohol beer.
You can actually find it on tap in Bristol and they donate a proportion of sales to mental health charities. So that’s my big recommendation on the on the drinks side. On the snack side, I don’t feel there’s anything better that I do that helps me connect with the ‘why’ on why I work in sustainability than growing my own food.
I’m having to get rid of my allotment because I’ve got twins coming in a couple of weeks, so there’s no chance that’s keeping going. But there is nothing better than picking blueberries with my son from the bush, it isan ideal sustainability snack.
NK: Oh, that’s,lovely. But yes, I need to make some room for slides and swings and everything, so congratulations and good luck with that. And thank you so much for your time.
MC: Absolute pleasure. Thank you.
