Global investment manager Schroders announced the launch of its Engagement Blueprint, outlining its vision of active ownership and its approach to engage with portfolio companies on a series of key sustainability issues ranging from climate risk to human rights. Schroders said that it has written to its portfolio companies to inform them of the Engagement Blueprint.
Along with the launch, Schroders also announced that it will apply new engagement targets for its equity and bond fund managers and analysts, which will form part of their personal performance goals.
In the blueprint, Schroders states that active ownership is a key element of the value it brings to clients, with engagement focused on encouraging management teams to adapt to evolving Environmental criteria consider how a company performs as a steward of nature. More and Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More forces, and holding them accountable for doing so, leading to stronger long-term competitiveness, and driving enhanced value and positive change.
Andy Howard, Global Head of Sustainable Investment at Schroders, said:
“We are in an era of transition in many key areas, including climate change, equality, diversity and many more. Old ways of working are being upended and companies more than ever will need to adapt to thrive. As active managers, we have a critical role to play in supporting that transition. Engagement is one of the important tools we can use to influence the companies in which we invest.”
The Engagement Blueprint introduces six key priority engagement themes for Schroders. These include Climate, with categories including climate risk and oversight, decarbonization and minimising emissions, climate adaptation and carbon capture and removal; Natural Capital and Biodiversity, encompassing nature-related risk and management, circular economy, pollution & waste, sustainable food and water and deforestation; Human Rights, covering workers, communities and consumers; Human Capital Management, including issues of corporate culture and human capital oversight, workforce investment, engagement and representation, and health, safety & wellbeing; Diversity and Inclusion at the board, executive, workforce and value chain levels, and; Corporate Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. More, covering topics such as boards and management, executive pay, relationships with shareholders, purpose, strategy & capital allocation, and transparency and reporting.
According to Schroders, fund managers and analyst can choose from the six core themes when considering their company interactions.
Schroders also outlined its outcomes-based approach to active management, prioritising depth and quality of engagements over volume, and taking into consideration materiality, regional context, realistic outcomes, ability to monitor progress, and timeframes when determining when to engage and setting objectives.
Kimberley Lewis, Head of Active Ownership, at Schroders, said:
“As a global active asset manager, we are able to influence corporate behaviour through constructive and committed engagement with the companies and assets we invest in. Active ownership is a key element of the value we bring to our clients.”
Click here to view Schroders’ Engagement Blueprint.
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