Our Responsible Investment Strategy
Responsible Investment (RI) often focuses on the consideration of environmental, social and governance (ESG) factors in investment decision-making and active ownership practices. While this is critically important, we believe that effective and credible approaches to responsible investment must rest on foundations of a strong stewardship mind-set, engaged people, quality investment processes and responsible and ethical business conduct. For over a decade this has formed the basis of our strategic approach to RI. Our Annual RI and Stewardship Report details how we are progressing against these strategic pillars.
Our diverse investment capabilities
Our commitment to RI and stewardship is a common thread which runs through our diverse investment capabilities. Each investment team are specialists in their respective fields and set their own investment philosophies and processes. In particular, all teams believe that ESG issues impact investment value and that as a leading global institutional investor we can achieve better long-term investment outcomes through active engagement and by exercising the equity ownership rights we hold on behalf of our clients.
The teams also integrate ESG into their investment process in various different ways. The RI Steering Group will take a decision to implement a company-wide ban on certain companies in certain sectors and several teams apply additional screens when requested by clients at mandate level.
For more information how our investment teams integrate ESG into their investment strategies, see each team’s approach to RI.
Governance
Governance of responsible investment and stewardship engages over 50 people across our global organisation and includes the following key features:
- Responsible Investment Steering Group: Chaired by our CEO, this group is responsible for setting the direction and strategy for RI and approval of the policy framework.
- Specialist RI Team: This team engages with and coordinates the entire business to deliver the RI strategy.
- Global Investment Committee: Chaired by the CEO and including our Chief Investment Officers, the committee is responsible for monitoring investment risks and receives reporting on ESG risks and issues for investment teams and portfolios.
- ESG Impacts Committee: Comprising representatives from each investment team (RI Representatives), the ESG Impacts Committee is a forum for identifying research areas to deepen our understanding of how ESG issues impact investment and business performance. The focus is on crosscutting issues that affect multiple investment teams, such as climate change and human rights risks. The RI Representatives are a key pillar of our governance strategy.
Benchmarking
Our approach to RI and stewardship has always been client-focused. We benchmark our approach against various global standards including (but not limited to) Principles for Responsible Investment (PRI) Assessment ratings, RIAA, UK Stewardship Code and the CFA Institute’s Code of Ethics and Standards of Professional Conduct. We look to these standards to identify areas where we can improve our practices and further develop our disclosures, allowing us to be more transparent about our progress. Our 2019 RI Report provides further benchmarking information.
PRI Ratings
Each year every PRI signatory reports to the PRI on their responsible investment practices and how they apply the Principles. We have been a PRI signatory since 2007 and its Principles and annual assessment process are an important benchmark for our progress. Our results since 2014 are listed below and in our 2019 RI Report. For additional information, you can read our PRI Assessment Report or access the PRI Transparency Report on the UN PRI’s website.