We believe that a strong commitment to stewardship is an essential component of a strong approach to Responsible Investment (RI), and that embedding RI into the core of our investment activities is in the best long-term interests of our clients. For more than a decade we have systematically and progressively improved our practices and processes across our investment capabilities globally.

Our Beliefs

Principles of responsible investment lie at the heart of our investment business. For more than a decade now, we have progressively embedded a consideration of environmental, social and governance (ESG) factors into all our investment decisions.

We believe this is in the best long-term interests of our clients. When environmental, social and governance risks are not well managed by a corporation, they have the potential to cause damage to the corporation itself, to its stakeholders, to the environment and, consequently, to its market value.

Our RI Strategy and Governance

We take a holistic approach to embedding RI principles in our investment process and business practices. This approach rests on three pillars: investment quality, stewardship, and employee engagement – all supported by a strong governance framework.

Investment quality

Responsibility for the integration of ESG factors into investment analysis rests with each investment professional and the head of each team. In the same way, responsibility for company engagement and decisions about proxy voting also rest with the individual teams. We find that integration and engagement are mutually reinforcing. Company analysis drives our engagement with investees, and engagement outcomes influence the analysis. This is why we have made the strategic decision not to separate proxy voting, engagement or ESG research and analysis into specialised functions.
Each of our investment teams has a lead RI representative, who co-ordinates information flows across and within their respective teams. These RI representatives sit as practitioners on our ESG Committee, where they represent their teams. There, they report on team progress, contribute to thought leadership and look at new approaches to addressing current and emerging ESG-related risks and opportunities.

See ESG integration for more detail.

Stewardship

As an asset manager, we are the stewards of our clients’ capital, and we recognise the significant responsibilities and obligations that this brings. We define stewardship as:

  • Actively monitoring and engaging with company management on issues that may impact their ability to generate long term sustainable returns, including environmental, social and governance issues
  • Voting on all issues and in all jurisdictions where we have the authority to do so
  • Maintaining the integrity and quality of markets in which we operate
  • Allocating investment capital to productive purposes
  • Using sound judgement and detailed analysis to make investment decisions which protect & enhance our clients’ capital over the long term
  • Collaborating with other investors to meet common objectives or to improve the quality of the markets where we invest our client’s capital
  • At all times, the interests of our clients are put first and we are committed to minimising conflicts of interest and implementing the highest standards of governance and control
  • Our Conflicts of Interest Statement can be accessed here

Our role as stewards of our clients’ capital is a fiduciary obligation that we take seriously. Our Global Stewardship Principles described fully our approach and can be accessed here.

Employee engagement

Our people are a key success factor as we continue to work towards our vision of being a world class global asset manager that delivers superior investment performance, acts at all times in our client’s best interests and is a global leader in responsible investment and stewardship.

We believe that fully implementing principles of responsible investment and stewardship is as much cultural as it is practical. Our RI strategy is integrated with our people and culture programs including by featuring our responsible investment approach in our recruitment and training processes, and by having a dedicated RI and Employee Engagement working group to further develop the program.

Encouraging this culture is a two way conversation with our people. All staff now complete an eLearning module to create a consistent base level understanding of RI, while we also seek regular feedback on our approach.

In 2017 we asked staff to complete a survey on their investment beliefs. The general level of appreciation of RI was already high among staff, but we continue to use the results of the survey to guide ongoing initiatives. In addition, our annual People & Culture Survey now includes RI specific questions.

We also recognise that diversity, in all its forms, is a critical component of achieving the desired culture and so have made diversity a key business and disclosure focus.

See our 2017 RI and Stewardship report for more detail

Strong Governance Framework

Our RI governance framework includes two key committees, a suite of firm-wide policies, connection with other business governance processes, adoption and benchmarking against industry standards, and various forums focused on communicating our progress to key business functions including marketing and human resources.

Our dedicated RI team are responsible for implementing our RI Strategy, which is overseen by the Responsible Investment Steering Group. The steering group is chaired by our CEO and consists of executive committee members whose role is to monitor, direct and champion RI and stewardship practices across the organisation.

Each of our investment teams has a lead RI representative, who co-ordinates information flows across and within their respective teams. These RI representatives sit as practitioners on our ESG Committee, where they represent their teams. There, they report on team progress, contribute to thought leadership and look at new approaches to addressing current and emerging ESG-related risks and opportunities.

The governance structure is supported by a policy suite which includes our Global Stewardship Principles, Guidelines and Principles for Corporate Engagement on Governance, Environmental and Social issues and our policy on Cluster Munitions. Some teams supplement these policies with additional guidance including our unlisted infrastructure team’s corporate engagement guidelines and Stewart Investor’s Hippocratic oath.

We use industry standards such as the CFA institute’s Asset Manager Code of Professional Conduct, the Principle’s for Responsible Investment’s (PRI) reporting framework and the PLSA’s Stewardship framework to assess our progress and plan improvements. Performance in the PRI’s annual assessment forms one of our organisational KPI’s.

Responsible investment governance fits with the broader governance framework of the organization, including through reporting to the Global Investment Committee.

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