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Wellington Management Company LLP

PRI reporting framework 2018

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ガバナンスおよび人事

SG 07. RI roles and responsibilities

07.1. 組織にある役職、それぞれについて責任投資を監督や実施する責任があるかどうかを記載してください。

組織における役職

          Line Management
        

07.2. RIの監督/説明責任または実施責任を担う役職について、このような責任をどのように果たすのか記載してください。

Our ESG Research team helps our portfolio managers and analysts gather deeper intelligence on ESG topics and integrate these considerations into the investment process. We believe that a holistic understanding of how companies deploy capital - financial, physical, and human - is helpful in framing an investment thesis, and examining ESG issues gives us a more complete picture. Our ESG analysts are responsible for conducting in-depth analysis of the ESG factors most relevant to the sectors within their coverage area. They are also responsible for coordinating the proxy voting and ESG engagement strategies for the companies in their sectors with equity and fixed income analysts and portfolio managers. Our ESG team works closely with investment teams to incorporate our research into the investment process - regularly conducting in-depth portfolio reviews with investment teams to discuss holdings with the greatest ESG risks and strengths.

Each of our portfolio managers and investment teams develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within our proxy voting and company engagement efforts.

07.3. 組織にいる専任の責任投資担当者の人数を記載してください。

8

07.4. Additional information. [Optional]

Wellington Management’s ESG Research team resides within the broad investment research resources of the firm and brings depth of ESG expertise to the investment dialogue. Our team of 8 has an average of 10 years of professional experience. 


SG 07 CC. Climate-issues roles and responsibilities

07.1 CC. 貴社の組織における役職を示すとともに、これらが気候関連の問題の監視責任および/または実施責任を有するかどうかをそれぞれに挙げてください。

貴社の組織における役職

          Line Management
        

07.1a CC. 気候関連の問題の監督/説明責任または実施責任がある取締役会レベルの役職については、これらの責任の遂行方法を説明してください

As a private partnership, Wellington Management does not have a board of directors. Instead, the firm’s Executive Committee, which is chaired by the chief executive officer (CEO), is responsible for oversight of the firm’s business. Management responsibility is carried out by the firm’s line management, under the direction of the CEO. Additionally, three managing partners have responsibility for governance of the partnership.

Responsibility for analyzing and managing investment risks in individual client portfolios, including climate-related risks and opportunities, rests with the portfolio manager, in coordination with ESG Research and Product Management, and with oversight by functional line management. In addition, Product Management maintains detailed interaction with investment teams to ensure portfolios are managed in a manner consistent with product design and client expectations. Review Groups are appointed by the Executive Committee and are responsible for providing peer review and advice regarding the quality of portfolio management across multiple dimensions, including portfolio managers’ investment philosophy, process, performance, portfolio characteristics, adherence with compliance standards, and the people and resources that support the investment management of client portfolios. The Review Groups serve as an important input into supervisory oversight by functional line management. 

With respect to climate-related risks and opportunities in our operations, the firm’s approach to enterprise risk management is to rely on “three lines of defense.” First, line management has primary responsibility for the management of the risks inherent in their business function. Second, various support functions partner with line management to strengthen their management of risks by providing expert advice and guidance, project management, or other support resources. Third, oversight committees oversee and support risk management policies and practices at the firm.

The Risk Management Committee is established by the Executive Committee and has primary responsibility for managing enterprise risk, including climate-related risks, and for evolving the firm’s risk management framework, as appropriate, to changes in the industry, our business, and the regulatory environment. It also is responsible for oversight of and coordination with the Operational Resilience Committee (ORC).

The Operational Resilience Committee is established by the Risk Management Committee. It reviews major infrastructure, real estate, information security initiatives to ensure the resiliency and redundancy of essential services, oversees and reviews the integrity and operational readiness of the company's business continuity program, recovery processes, and resources, and reviews business practices for safety and security of personnel and guests on company premises, and of personnel while traveling on company business.

07.1b CC. 気候関連の問題を評価し管理する管理レベルの役職については、その構造とプロセスを詳しく説明してください。

As noted above, responsibility for analyzing and managing investment risks in individual client portfolios, including climate-related risks and opportunities, rests with the portfolio manager, in coordination with ESG Research and Product Management, and with oversight by functional line management.

Climate change considerations are embedded in our environmental, social, and corporate governance (ESG) integration process. Our ESG Research team, part of the central Investment Research function, works closely with investment teams to incorporate its research into the investment process -- regularly conducting in-depth portfolio reviews to evaluate ESG risks, including climate-related risks, and strengths of particular holdings. With support from the ESG Research team, each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and potential investment returns. ESG integration can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within our proxy voting and company engagement efforts.

Engaging with portfolio companies on the impact of a changing climate to their business and strategy is a key input to the process, and climate risk is among our top three engagement priorities in 2018. We believe that engaging with the companies we invest in plays a critical role in helping to identify, understand, and appropriately consider ESG risks such as climate change. As part of this process, our firm speaks with companies to gauge their exposure to climate-related events, assess management's awareness of this topic, evaluate their risk-management approach, and encourage adoption of best practices. Sample engagement questions include: How does the board evaluate risks associated with climate change? Are there individuals at the company who are specifically responsible for addressing issues associated with climate change? What is the company doing to mitigate its own GHG emissions? Are there reduction targets and, if so, how did the company arrive at them? How does the company consider climate-related opportunities such as product development and innovation? Does the company conduct regular scenario analyses to understand the risks that climate change poses to the business?

In addition to engagement, proxy voting can be a powerful tool for managing climate-related risks, providing leverage in company management discussions and also the opportunity to directly influence corporate policy.

In December 2017, we signed the Statement of Support for the TCFD recommendations. Through engagement and proxy voting, we are encouraging our portfolio companies to adopt the framework and improve disclosures so that we can make more informed investment decisions on behalf of our clients.

As we continue to conduct research and develop tools to analyze climate-related risks for our client portfolios, insights gained can also be used to inform our operational risk management processes. Wellington Management has developed a comprehensive business continuity and disaster recovery program (Business Continuity Program, or "BCP"), which consists of various elements that represent the processes for planning for and responding to significant business disruptions. The BCP is designed to enable Wellington Management to meet its obligations to provide investment management services to its clients in the event of a significant business disruption. The Business Continuity Planning Group is responsible for the ongoing management of the BCP, including coordinating tests of business continuity plans, assessing the effectiveness of the Program, providing training, and supporting the incident management process. The group is responsible for designing and coordinating the elements of its respective business continuity plans under the direction of the Business Unit management teams and delegates.

We recognize that in certain locales in which we operate there is the potential for business disruption due to events associated with climate change.  For example, in Boston the increasing frequency of ocean-based storms coupled with rising sea levels will continue to be a threat to our region. To mitigate the risk of disruption to our business, Wellington partnered with Boston Properties, our landlord, to undertake a study to ascertain the likelihood of flooding in our specific location and to develop a flood management program for the property.  As a result of this study, we agreed to fund the purchase of an Aqua Fence. The Aqua Fence provides a portable four foot buffer around the property which is meant to protect vulnerable electrical infrastructure and contingency fuel supplies in the underground parking structure. In Tokyo, where we face disruption due to earthquakes, we chose to relocate to a new property (with the latest structural design) on a low floor that was adjacent to green space so that in the event of an earthquake our colleagues have a short evacuation route that leads them to open space.

As another example of how we manage risks associated with power supply disruption due to severe storms, our data centers in Windsor, Connecticut and Marlborough, Massachusetts are supported by generators and uninterruptible power supply (UPS) devices that are tested on a regular basis. In the Boston offices, both the equity and fixed income trading floors at 280 Congress Street are covered by UPS devices and generators. Additional investment functions at 280 Congress Street are also covered by a generator. The Marlborough BCP alternate site is generator- and UPS-backed. Every Wellington Management office has UPS power to support critical equipment and most have generator power to support a prolonged outage.

Finally, Wellington seeks in all major markets to lease space from highly established landlords (e.g. Boston Properties, Land Securities, Mitsubishi Estates) who demonstrate a commitment to minimizing greenhouse gas emissions through highly sustainable construction and building operations practices resulting in LEED certification, or the like, as well as a commitment to support renewable energy.  From a tenant improvement perspective, Wellington routinely builds its spaces with a goal to achieve a LEED Gold rating; in the U.S., where we have power purchase agreements, we include renewable energy credits as part of our commitment.

 


SG 08. RI in performance management, reward and/or personal development

08.1. 組織のパフォーマンス管理、報奨や個人の能力開発プロセスに責任投資の要素があるかどうかを記載してください。

最高経営責任者(CEO)、最高投資責任者(CIO)、投資委員会

その他の最高幹部レベルのスタッフまたは部門長

具体的に記入してください

          Line Management
        

ポートフォリオマネージャー

投資アナリスト

専任の責任投資担当者

08.3. Provide any additional information on your organisation’s performance management, reward and/or personal development processes in relation to responsible investment.

While our compensation plans are not explicitly tied to RI or ESG objectives, they are designed to be fair and motivational over time in order to attract and retain the best professionals in the investment industry. We provide them with incentives to excel, and reward superior performance. Compensation arrangements for investment professionals typically include a base salary component and one or more variable components. For senior professionals, variable compensation is a substantial portion of total compensation.

The significant number of our professionals who are senior managing directors or managing directors of the firm receive additional merit-based compensation based on the overall performance of the firm and their individual and team contributions to firmwide results.

Investment professionals are assessed in part on the 1, 3, and 5-year performance of their strategies and investment ideas, with an emphasis on the longer timeframe. Given that ESG issues tend to unfold over a longer time horizon, we believe that this emphasis in our assessment and compensation framework may reflect overall integration capabilities.

In addition, Wellington Management has a strong culture that supports the growth and development of all employees. Development at Wellington Management takes place as a combination of, coaching and on the job teaching, participation in relevant internal meetings, forums and presentations, attendance at industry seminars, and more formal technical and professional training.

People at Wellington Management accept their individual responsibility to learn from one another, both asking for help when they need it and sharing their knowledge and skills with their colleagues. Senior professionals work to ensure that all professionals receive growth opportunities, feedback, and guidance.

Considerable time is spent to ensure that individuals are in positions that both leverage their strengths and afford them the opportunity to learn and grow, and not become either stagnant or complacent. New and open positions within the firm are posted and made known to the staff. Staff members are encouraged to apply for any position for which they believe they qualify.

Working at Wellington Management is challenging and the bar continues to rise over time, requiring everyone stay current in their areas of expertise and knowledgeable about the business and the industry.


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