MFS Investment Management

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Facts & Figures

Inception of sustainability strategy1924
Total AUM (USD)507.2 billion
AUM Responsible Strategies (USD)507.2 billion
% screenedNA
% ESG integration100
% engagement100
% proxy voting75 (per equity assets)
Responsible Investment team11 (see SRI highlights for further details)

Ticking Boxes

Firm-wide ESG integration Click here to read more
PRI Signatory2010
CDP Signatory2010
Task Force on Climate-related Financial Disclosures (TCFD)
Other memberships Click here to read more

IN BRIEF

In 1924, MFS launched the first open-end mutual fund in the United States, opening the door to the markets for millions of everyday investors. Since then, we have grown into a full-service, global investment management firm offering fixed income, equity and quantitative solutions to financial advisors, intermediaries and institutional clients around the world. Headquartered in Boston, MFS has investment offices in Hong Kong, London, Mexico City, São Paulo, Singapore, Sydney, Tokyo and Toronto. As of 30 June 2020, MFS managed $507.2 billion in assets on behalf of individual and institutional investors worldwide.

What sets MFS apart from other managers is our commitment to a single purpose: to create long-term value for clients by allocating capital responsibly. Through that sense of responsibility and the strength of our investment platform, we strive to protect our investors’ assets and our clients’ reputations. Our powerful investment approach combines collective expertise, thoughtful risk management and long-term discipline to uncover investment opportunities that drive sustainable value for investors. We call this Active Intelligence®, and we support it with our distinct culture of shared values and collaboration. That means bringing together teams of diverse thinkers to actively debate ideas, assess material risks and uncover what we believe are the best investment opportunities in the market.

SRI HIGHLIGHTS

Commitment to Sustainability

At MFS, we exist to create long-term value by allocating capital responsibly for clients. This is our singular focus and we consider it synonymous with sustainable investing. Sustainable investing at MFS encompasses an investment process that integrates all material factors, including ESG, along with carefully considered proxy voting policies and thoughtful issuer engagement. We are entirely convinced that this approach improves our ability to achieve our clients’ objectives and meet our fiduciary responsibility. We are not convinced that managing to sustainability targets or imposing exclusions can do the same. We also believe that owning and engaging with companies to improve their ESG performance can sometimes be a more effective path to positive outcomes for all stakeholders than exclusion and divestment.

Our investment teams rely on deep fundamental research and a long-term perspective to select securities that can produce sustainable returns throughout an economic cycle. Although our overall approach to investing has always been well aligned with a sustainability-oriented mindset, in 2009 we formed the MFS Responsible Investing Committee to ensure that financially material ESG topics were being systematically integrated into our equity and fixed income investment processes. We believe collaboration results in better insights, which is why our investment team has always been integrated across asset classes. As a result of that long-held belief, our ESG analysts are expected to drive collaboration on sustainability-related topics, not create an internal ESG outsourcing group. For us, integration means each of our analysts and portfolio managers are considering these topics throughout the entire investment decision-making process.

Visit www.mfs.com/sustainability for more information including ESG research and thought leadership.

Engagement Resources

We believe open communication with companies and issuers is an important aspect of our ownership responsibilities. Our goal when engaging is to exchange views on environmental, social and governance topics that, in our view, represent material risks or opportunities for companies or issuers and to effect positive change on such issues. We believe that large, long-term oriented asset managers who engage companies and issuers on ESG topics can positively influence governance and business practices by encouraging executive teams to view these issues as relevant to an increasingly broad investor base and worthy of further consideration. We typically engage with companies and issuers on ESG issues in four ways:

  1. Proxy Voting Led Engagement—Members of our proxy voting team will engage in a dialogue with a company or other stakeholders when we believe that the discussion will enhance our understanding of certain matters on the company’s proxy statement that are of concern to shareholders or regarding certain thematic topics of focus for our Proxy Voting Committee. Some of the issues we discuss with company management teams board members and/or other company representatives include executive compensation, director accountability, as well as various other ESG issues.
  2. Informal Investment Team Led Engagement—Our investment team engages with companies on an ongoing basis, often sharing ideas and asking ESG-related questions of management teams during meetings in our offices and conference calls. We view these meetings as “”informal”” engagement opportunities, as the discussion is not always focused on driving corporate change, but about better understanding the risk/return profile of the company’s securities. However, in many cases these informal discussions lead to follow-on conversations regarding ESG topics, which suggests our focus on the topic during typical management meetings conveys a strong viewpoint that we find ESG issues to be material.
  3. Formal Investment Team Led Engagement—Each year, our investment team requests ESG-focused meetings or writes formal letters with the aim of engaging with various companies’ boards on ESG topics. While limited in number, we have found these more formal engagements drive considerable value both for the company and ourselves as investors.
  4. Collective and Other Forms of Engagement— In addition to engaging individually with our portfolio companies, MFS believes that collective and other forms of engagement can also be beneficial. We often engage with sponsors of shareholder initiatives or proposals, which helps inform our views on important proxy voting issues, and we participate in various industry working groups and organizations that seek to develop thought leadership on emerging proxy voting issues. For example, MFS is a founding signatory of the US Investor Stewardship Group (the ISG). The ISG is a collective of some of the largest US-based institutional investors and global asset managers, along with several of their international counterparts. It was formed to develop a sustained initiative to establish a framework of basic standards of investment stewardship and corporate governance for US institutional investor and boardroom conduct. In addition, our ESG research analyst has participated in PRI-led engagements on corporate tax minimization and human rights issues, and MFS was co-lead investor for a PRI-led corporate engagement on methane. MFS may send letters to various regulatory agencies to encourage corporate governance reform when we feel it is warranted. For example, the MFS Proxy Voting Committee has sent letters to both the New York Stock Exchange and the NASDAQ encouraging them to implement a majority voting standard in uncontested director elections for publicly-traded operating companies.
ESG Team

At MFS, it is our firm belief that a successful approach to sustainable investing requires the participation of our entire firm. Sustainable investing describes our fundamental investment process; it is not a separate discipline with different inputs or outcomes. As such, our sustainable investment process requires that all of our investment professionals are actively engaged in, and responsible for, its success.

In order to facilitate the adoption, implementation and enhancement of sustainable investing practices across the firm, we employ a number of individuals positioned to provide strategic leadership on sustainable investing and support effective integration of sustainability topics across teams and disciplines.

Investments

Barnaby Wiener, one of our most seasoned and successful portfolio managers, serves as Head of Sustainability and Stewardship. A leader and culture carrier who has long been a champion of sustainability, Barnaby works closely with our three ESG-dedicated research analysts to engage with investment leadership, portfolio managers and analysts to ensure that all of our investors truly understand and have ownership of sustainability in their research and portfolio management duties. He also plays a strategic role with regard to issuer engagement on sustainability topics. Our investment team includes two equity analysts and one fixed income analyst dedicated solely to ESG research who have done much to advance our investment team’s thinking on ESG topics. Our ESG analysts fulfil a critical role in facilitating our sustainable investing efforts. However, they are not intended to be the source of all ESG research. Their role is to support and enhance the ongoing research into ESG topics performed by our portfolio managers and analysts.

Proxy voting

The administration of the MFS Proxy Policies is overseen by the MFS Proxy Voting Committee. Our team of three dedicated proxy analysts manages day-to-day proxy voting and engagement activity. The proxy voting team employs a collaborative approach in its decision-making, incorporating information and perspectives from our global team of investment professionals, from public disclosures and engagement discussions with our portfolio companies, and from a variety of third-party research tools. This process facilitates well-rounded viewpoints on key issues, which we believe leads to well-informed voting decisions that are in the best long-term economic interests of our clients.

Client engagement and thought leadership

We have personnel dedicated to developing thought leadership and engaging with our clients and the investment industry on ESG issues. These individuals play an important role given the high level of interest from industry participants in understanding how asset managers such as MFS approach sustainable investing. Michael Cantara, who leads our global client group, plays an important role in the advancement of sustainable investing within the firm and how we communicate our approach externally. Mike is co-chair of the MFS Sustainability Group and the MFS Responsible Investing Committee. The MFS Investment Solutions Group, which leads the development of thought leadership, client research and special projects for MFS, includes three individuals fully dedicated to sustainable investing. This team develops ESG thought leadership and market research as well as interacting with our clients in the capacity of investment strategists.

Proxy Voting

The exercise of voting rights is overseen by our Proxy Voting Committee, and we have adopted proxy voting policies and procedures with respect to our exercise of voting rights. MFS’ policy is that proxy voting decisions are made in what we believe to be in the best long-term economic interests of clients. We believe that robust ownership practices can help protect and enhance long-term shareholder value. Such ownership practices include diligently exercising our voting rights as well as engaging with our portfolio companies on a variety of proxy voting topics. We also recognize that environmental, social and governance issues may impact the value of an investment, and, therefore, these factors should inform our proxy voting practice.

Our team of three dedicated proxy analysts manages day-to-day proxy voting and engagement activity. The proxy voting team employs a collaborative approach in its decision-making, incorporating information and perspectives from our global team of investment professionals, from public disclosures and engagement discussions with our portfolio companies, and from a variety of third-party research tools. This process facilitates well-rounded viewpoints on key issues, which we believe leads to well-informed voting decisions that are in the best long-term economic interests of our clients.

SRI Awards and Recognitions

MFS was named ESG/SRI Provider of the Year at the 2019 Irish Pension Awards.

MFS was ranked most ESG-friendly fund shop by Ignites for both 2017 and 2018.

Source & Resources