Annual Engagement Report 2018
About the Video
For Miller/Howard, our ESG engagements illustrate the relevance our work has in protecting shareholder value and helping companies remain long-term investment options for our clients. And in terms of business — calculating the potential impact on a company's bottom line.
About Miller/Howard ESG
We launched our first ESG (environmental, social, and governance) strategy over a quarter century ago, and many of our products since then have an ESG component. With the goal of income growth and long-term returns, we use an integrated approach that combines robust financial analysis with research into a company's ESG policies and practices.

Download our Annual Engagement Report.
Annual Engagement Report 2018

Hi, I'm Luan Jenifer and I'm the Chief Operating Officer here at Miller/Howard Investments.

So we've had a record year: Our ESG team has elicited commitments for improvement from many of the companies we've contacted and from most of the companies with which we filed shareholder resolutions.

So what are our goals when we engage a company? Risk mitigation and promotion of shareholder value. It's really that simple. Each engagement represents an issue we've identified as material to the company, and a sign of either opportunity or risk—and sometimes both. We want to see the company takes actions to adequately address—or sometimes just begin to address—these concerns. Accordingly, the details of each engagement vary according to topic and company.

For Miller/Howard, the fact that each ESG engagement we're involved in can be boiled down to governance illustrates the true relevance our work has to protecting shareholder value and to helping the company remain a good long-term investment option for our clients. So one way to get at the governance aspect of each issue is to see it in terms of the business case—in other words, how the issue at hand could impact the company's bottom line.

Here's an example: gender diversity on the board and in top leadership appears to be primarily a social issue, given the context in which diversity is considered and evaluated. However, we see it as a critical governance question, speaking to the effectiveness of management's competitive talent acquisition, retention, and promotion.

A company that does not transparently and effectively address gender diversity in talent management can be exposed to a number of risks and missed opportunities, like:

  • Falling behind competitors by recruiting from a smaller and potentially less competitive pool.
  • Increasing HR costs through higher turnover rates.
  • Losing key employees and high performers.
  • Being exposed to litigation and reputational damage if gender discrimination is proven to be systemic.
  • And just missing out on the benefits of diverse perspectives on teams.

How a company chooses to systematically address these factors, it speaks directly to the quality of management and its ability to mitigate risks and remain competitive. When we identify outliers—those companies whose leadership or policy profiles are substantially dissimilar to peer companies who are presumably competing for the same talent—we ask for additional reassurance that the company isn't suffering from either accidental or intentional biases in its recruitment and promotion processes.

This was just one example. We engaged companies on methane management and mitigation, on transparency around environmental management and impacts, and other topics.

So the report itself is due for release in June. You can find a copy on our website or by emailing esg@mhinvest.com.

© 2018 Miller/Howard Investments, Inc.

Investment products: are not FDIC insured - May lose value - Are not bank guaranteed

Opinions and estimates offered constitute Miller/Howard Investments' judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. All investments carry a certain degree of risk, including possible loss of principal. It is important to note that there are risks inherent in any investment and there can be no assurance that any asset class will provide positive performance over any period of time. The material may also contain forward-looking statements that involve risk and uncertainty, and there is no guarantee they will come to pass.

The information above is from sources deemed to be reliable and is provided strictly for the convenience of our investors and their advisors. These materials are solely informational. Legal, accounting and tax restrictions, transaction costs, and changes to any assumptions may significantly affect the economics of any transaction. The information and analyses contained herein are not intended as tax, legal, or investment advice and may not be suitable for your specific circumstances; accordingly, you should consult your own tax, legal, investment, or other advisors, at both the outset of any transaction and on an ongoing basis, to determine such suitability. Any investment returns — past, hypothetical, or otherwise — are not indicative of future performance. Investment Decisions: Do not use this report as the sole basis for investment decisions. Do not select an allocation, investment discipline, or investment manager based on performance alone. Consider, in addition to performance results, other relevant information about each investment manager, as well as matters such as your investment objectives, risk tolerance, and investment time horizon.

Past performance does not guarantee future results.

DISCLOSURE

Investment products: are not FDIC insured - May lose value - Are not bank guaranteed

Opinions and estimates offered constitute Miller/Howard Investments' judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. All investments carry a certain degree of risk, including possible loss of principal. It is important to note that there are risks inherent in any investment and there can be no assurance that any asset class will provide positive performance over any period of time. The material may also contain forward-looking statements that involve risk and uncertainty, and there is no guarantee they will come to pass.

The information above is from sources deemed to be reliable and is provided strictly for the convenience of our investors and their advisors. These materials are solely informational. Legal, accounting and tax restrictions, transaction costs, and changes to any assumptions may significantly affect the economics of any transaction. The information and analyses contained herein are not intended as tax, legal, or investment advice and may not be suitable for your specific circumstances; accordingly, you should consult your own tax, legal, investment, or other advisors, at both the outset of any transaction and on an ongoing basis, to determine such suitability. Any investment returns — past, hypothetical, or otherwise — are not indicative of future performance. Investment Decisions: Do not use this report as the sole basis for investment decisions. Do not select an allocation, investment discipline, or investment manager based on performance alone. Consider, in addition to performance results, other relevant information about each investment manager, as well as matters such as your investment objectives, risk tolerance, and investment time horizon.

Past performance does not guarantee future results.