Stockholm (NordSIP) – While the sustainable investment industry is increasingly adopting the Sustainable Development Goals (SDGs) to guide their impact-seeking investment efforts, Will Pomroy, Associate Director of Engagement, Hermes Investment Management, discussed how Hermes uses the SDGs as a tool for driving positive change at a local conference arranged by Aktuell Hållbarhet.
Hermes, the UK-based pension manager with £ 33.5 billion in AUM, engages its companies as a constructive and trusted partner. Instead of pursuing an aggressive activist agenda through the companies’ boards, Hermes prefers engagement and dialogue to persuade them of the mutual benefits that its initiatives can generate. To accomplish this, the firm gives its companies’ managers the confidence to take a long term approach in line with the investment horizons of its pension fund clients.
However, Hermes goes a step further. The firm gets involved and facilitates innovative collaborations between its companies and other partners. One example of this form of engagement is an African mining company Hermes owns. “The reason we hold this position is because Hermes had a hypothesis at the outset. If we could introduce this company to a large US pharmaceutical company, perhaps their resources and expertise in the communicable diseases that affect the local workforce could be used to benefit the communities around the mine and help tackle the prevalence of HIV,” according to Will Pomroy.
Hermes stands out in its focus on the often-forgotten social dimension of ESG, including engaging with the employment conditions in its companies. “Looking through the lens of SDG 8, ‘decent work’, allows us to touch on a number of the underlying sustainability goals and targets. We can speak to companies about, for example, lower pay, lower skill work to provide opportunities to people who are further from the labour market. This could have a profound impact on a person who would otherwise be excluded from the workforce. It would also benefit the company because that worker will likely have higher levels of productivity,” adds Pomroy.
At a time when inequality and distrust in the USA and in Europe have led to political instability, Hermes believes investors can play a positive role through engagement. “If we could be more holistic in that kind of mindset and more imaginative about the solutions that are going to be material to the companies we are invested in, we might make more of a difference”, concluded Pomroy.
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