Stockholm (NordSIP) – Schroders’ active ownership initiative, Engagement Blueprint, formally launched in April this year, is already gaining recognition. Revealing their prestigious annual awards at the end of June, Environmental Finance named the newcomer ‘ESG engagement initiative of the year’. In the motivation for their decision, the awards judges mention the initiative’s “holistic approach to ESG engagement” and its “successful focus on outcomes as an integral part of the engagement process.”
The Engagement Blueprint might be relatively new, but Schroders has a long history of engagement and active ownership. The asset manager has recorded and monitored ESG engagements for over 20 years, influencing change and helping investee companies improve their environmental, social and governance performance. The new initiative builds further on that solid foundation.
“The Engagement Blueprint establishes and articulates the guiding principles around our active ownership efforts, bringing enhanced transparency to our stewardship focus and helps to ensure we have a common voice across the asset classes we manage, as well as through our engagement and input to policymakers, regulators and industry groups,” explains Andy Howard, Global Head of Sustainable Investments at Schroders.
The Blueprint encompasses six core themes: Climate Change, Corporate Governance, Diversity and Inclusion, Human Capital Management, Human Rights, Natural Capital and Biodiversity. It follows three methods for active engagement:
- Dialogue – speaking with companies to understand how they are preparing for long-term sustainability challenges;
- Engagement – working with companies to help them recognise the potential impact of these challenges and take action where required; and
- Voting – using the rights as shareholders to ensure change and hold directors accountable on ESG topics.
The award is a recognition of Schroders’ in-depth and outcome-oriented approach. Environmental Finance notes that the asset manager also sets unique objectives for each company. The Blueprint pushes Schroders to prioritise depth and quality of engagements above the volume of activity.
Another feature that seems to have impressed the judges is the clearly defined escalation process. While continuous engagement is necessary, Schroders will escalate its process “where we have engaged repeatedly and seen no meaningful progress”. This could include communicating concerns with non-executive directors, collaborating with other investors, voting against management or even divestment.
“It is fantastic to receive such prestigious recognition for a core element of our stewardship and engagement strategy,” comments Kimberley Lewis, Head of Active Ownership at Schroders. “This accolade is a win for the whole of Schroders as the Blueprint is implemented across our investment desks. 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.”