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Boston Common Asset Management

PRI reporting framework 2019

You are in Strategy and Governance » Governance and human resources

Governance and human resources

SG 07. RI roles and responsibilities (Private)

SG 07 CC. Climate-issues roles and responsibilities

07.5 CC. Indicate the roles in the organisation that have oversight, accountability and/or management responsibilities for climate-related issues.

Board members or trustees

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Risk Officer (CRO), Investment Committee

Dedicated responsible investment staff

External managers or service providers

07.6 CC. For board level roles for which have climate-related issues oversight/accountability or implementation responsibilities, indicate how these responsibilities are executed.

The board reviews and endorses our commitment as a signatory to the Montreal Carbon pledge which we have adopted as a formal commitment to measure, disclose and reduce our carbon footprint.  Our chief investment strategist, responsible for co-designing our ESG approach chairs our board of directors.

 Our approach to measuring carbon risk goes beyond the energy and utilities sectors; we consider risk in transport, shipping, and agriculture, and in those industries that have ignored financial risks associated with lending to carbon intensive industries, such as banks and insurance companies. Assessing our portfolios’ carbon footprints informs our investment decision-making process, as we seek companies that are not only making efforts to reduce their GHG emissions, but also those that already have demonstrated low carbon footprints. We complement this assessment by avoiding risky companies whose GHG emissions have grown unabatedly and are more susceptible to financially related climate risks. We actively use the data to challenge companies on climate-strategic questions in our shareowner engagement initiatives. Our major strategies produce fewer emissions and are less carbon-intensive than their respective benchmarks, primarily due to stock selection. 

Every quarter, the Board receives a complete review of our strategies, covering financial and ESG aspects, carbon footprint, Engagement outcomes.
In addition, the budget for our own firm level initiatives undertaken to offset our carbon footprint, select and support offsets are included in firm-level budgets approved by the Board.  We also have firm-level contingency plans for operating in extreme weather events. 

07.7 CC. For the management-level roles that assess and manage climate-related issues, provide further information on the structure and process involved.

Our firm-wide commitment to addressing climate change is managed collaboratively by the integrated ESG Investment team. 

The Director of Shareowner Engagement has been primarily responsible for the management and implementation of our commitment to the Montreal Carbon Pledge. We have conducted carbon audits of our key model portfolios (U.S. Core, International EAFE, ACWI ex U.S. and Sustainable Climate) and  use the results to inform our investment decision-making and engagement. We also communicate those results publicly on an annual basis.

Our Director of ESG Research and our Chief Investment Strategist have been primarily responsible for the implementation of climate considerations in our portfolios. However, our entire 15 person strong investment team is responsible for identifying companies that are developing innovative tools,,  Our integration of ESG considerations has lead energy efficiency and renewable energy to become long running investment themes. We have sought companies that develop energy efficiency or renewable energy products or support them in their operations.  We have also reported out to clients for more than a decade on the percentage of their assets which were invested in companies providing environmental or social 'solutions.'  (based on our own definitions and revenues derived from these products or services).  Around ten percent of the companies in our portfolio are 'solutions' firms with the largest group those companies falling into the recycling/energy efficiency or the renewable energy categories.

Given our preference for ESG leaders,  our investment team is oriented towards building portfolios which avoid investing in companies and industries contributing the most to global climate change.  We seek  subsitutes to the most energy intensive companies where they exist  and avoid investing in companies whose primary revenues come from coal or nuclear power, tar sands and corn based ethanol. 

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

08.1. Indicate if your organisation’s performance management, reward and/or personal development processes have a responsible investment element.

Board members/Board of trustees

08.1b. RI in personal development and/or training plan

08.2. Describe any activities undertaken during the reporting year to develop and maintain Board members’ skills and knowledge in relation to responsible investment.

As a sustainability-focused investment boutique, our staff who serve on the board bring a unique combination of skills and experience to oversight of our integrated ESG investment approach. We  run a series of internal workshops at least quarterly where we bring together our ESG analysts, our financial analysts and other members of the firm to learn about ESG issues and share their expertise.

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Operating Officer (COO), Investment Committee

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Dedicated responsible investment staff

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

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

As previously stated we run a series of internal workshops  - the Education Series where we bring together our investment team, other outside experts and other members of the firm to learn about particular social and environmental issues and share expertise.  Workshop topics in 2018 included research on company performance on indicators to measure gender equality, a film tracking the 'bleaching' of ocean coral as a result of climate change (Documentary: Chasing Coral) and the impact of the 13th amendment in the United States on mass incarceration and racial injustice (Documentary: 13th).

We host lunch and learn events (sometimes in collaboration with the Boston Area Sustainable investors BASIC), and these are open to all our staff, and address topics of concern to all responsible investors.  All members of our ESG/integrated investment team, and especially our dedicated responsible investment, have performance measurement and annual bonus payments linked to an appraisal of their skills, and contributions to our responsible investment and engagement efforts during the year.