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Schroders

PRI reporting framework 2019

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Promoting responsible investment

SG 09. Collaborative organisations / initiatives

09.1. Select the collaborative organisation and/or initiatives of which your organisation is a member or in which it participated during the reporting year, and the role you played.

Select all that apply

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We presented our work on plastics to PRI members and other interested parties as part of a panel discussion. Additionally, we provided advice to other investors on quantifying impacts, and advised on the most suitable engagement questions to ask companies.

Later in the year, we were invited to speak on a panel at the PRI's Climate conference to discuss our experiences engaging companies globally on climate change. The audience consisted of PRI members and other interested parties. We spoke about our involvement in Climate Action 100 and the challenges of engaging Asian companies on climate change and how we have approached this.

We joined the PRI plastics working group, which has used Schroders' value chain mode as a starting point for its own work. The group formed in September and we will have regular involvement in helping the group define metrics and engagement questions, drawing on our existing work.

As a member of the PRI Integration Sub-Committee, we actively participate in regular calls leading the ORU's ESG integration work. This quarter we have provided feedback on an integration paper written by the PRI and aimed at the US CFA institute.

Our policy team is active in the UNPRI policy group. 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We are active members of the ACGA and regularly dial into their meetings. We have contributed to local strategy meetings where an agenda of priorities is set for the year. This year we were also able to attend their annual conference in Beijing and participate in a number of workshops and roundtable discussion on ESG integration in Asia. 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We have been a long term member of the Carbon Disclosure Project. Our former CIO (and Chair of Schroders Retirement Benefit System Investment Committee) is the Chairman of CDP.

We have regularly acted as a public spokesperson for the initiative and actively promoted it, for example at the recent Corporate Citizenship conference. We have pro-actively engaged with over a 100 companies encouraging better climate disclosure, highlighting CDP survey as one way of communicating this disclosure. We continue to have a close relationship and provide feedback on research format, content etc. Our Head of Sustainable Research has also joined CDP staff in meetings to describe the importance we attach to the initiative.

This year we also presented our work on water risk and explained how we used CDP data to evaluate food and beverage companies at a CDP workshop. We have also run an event for non executive directors in which the CDP presented on climate change disclosure.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We became members of Eumedion during 2018. As members of Eumedion, we jointly sent a letter to the Dutch government responding to the draft bill which allows Dutch listed companies to invoke a statutory response time of up to 150 days in the aituation of shareholder activism or a hostile public bid. The letter recommended for the Government not to introduce additional measures restricting shareholder rights as this would harm the reputation of the Netherlands for corporate governance and would be detrimental for long-term investment in the Dutch economy.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We have participated in the annual GRESB survey for property funds since 2011 and became a GRESB Fund Manager member in 2017. Eight of our direct real estate funds participated in GRESB in 2018. GRESB seeks to assess the ESG performance of real assets globally. It comprises an annual survey completed by listed companies and unlisted funds looking at Management and Policy and Implementation and Measurement of ESG, GRESB review and score each submission. See Real Estate section.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

In 2018 we attended the ICGN Annual Conference and 'Focus on Italy' day in Milan. Schroders participated in discussions around a number of topics including Board composition, Human Capital, Cyber, Board elections in Italy and SDGs.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

          Schroders is a member of UKSIF, EUROSIF and SWESIF.
        

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We have a long history of membership with UKSIF. We are a member of the UKSIF Markets Committee, which seeks to promote responsible investment and raise awareness among different stakeholder groups through initiatives and events, including Ownership Day and Good Money Week.

In 2018 participated in a panel discussion, speaking to UKSIF members about our work on plastics and how this is relevant from an investment perspective.  We also hosted a webinar with SASB for UKSIF to build familiarity with their standards. 

We also organised an event for clients in the Nordics and arranged for SWESIF to speak about how to protect portfolios against climate risk.

          Investor Forum
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

This is a forum set up in the UK post the Kay Review to encourage a long term approach to investment and collaborative engagement. We are members and Jessica Ground our Global Head of Stewardship sits on the board.

We participated in an event to provide a deep-dive into supply chain trends with perspectives from a range of stakeholders including the British Retail Consortium, ShareActions's Workforce Disclosure Project and Tesco's Responsible Sourcing Team. We had also connected Oxfam with the Investor Forum to highlight the work they've been doing on supermarket supply chains.

In addition, we participated in a collaborative engagement via the Investor Forum.  The event provided a deep-dive into supply chain trends with perspectives from a range of stakeholders including the British Retail Consortium, ShareActions's Workforce Disclosure Project and Tesco's Responsible Sourcing Team.  We had also connected Oxfam with the Investor Forum to highlight the work they've been doing on supermarket supply chains.

          UK Corporate Governance Forum
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Schroders' Corporate Governance Specialist is an active member of the forum and has been involved with a number of collaborative engagements with forum members. They are now deputy chair of the group.

          Investment Association
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Our CEO currently chairs the IA board. Our Global Head of Stewardship currently chairs the Stewardship Committee and our Investor Director sits on their Sustainability and Responsible Investment Committee.

On the Stewardship committee we helped form responses to the Kingman review of the FRC, the DWP's consultation on trustees investment duties, the CMA Statutory audit market study, and the BEIS Future of audit enquiry.  We also hosted the first ever conference on Stewardship with policymakers, regulators and investors coming together to discuss the issue. 

Our Investment Director is a member of the IA's Sustainability and Responsible Investment Committee. At the start of 2018, the IA identified sustainability and responsible investment as a dedicated policy area in its own right to help firms in thinking about their wider role in society and to promote all forms of responsible investment. The IA's Sustainability and Responsible Investment Committee was established to provide strategic direction to this policy area and has a broad mandate to consider and lead on all issues affecting member firms in sustainability and responsible investment. In 2018 the committee has responded to various EU sustainable finance consultations.

          EFAMA Working Group on Responsible Investment
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

We serve on the board of EFAMA and are a member of the Responsible Investment group.  As well as participating in meetings, we make ongoing contributions to EFAMA's responsible investment consultations and reports. In 2018 we helped shape the response on the EU Ecolabel for financial products, EIOPA's consultation paper on the integration of sustainability risks and factors in the delegated acts under Solvency II and IDD, ESMA's consultations on integrating sustainability risks and factors in MiFID II and integrating risks and factors in the UCITS Directive and AIFMD.  We also presented on shareholder engagement at an event for policymakers and other stakeholders in Brussels. 


SG 09.2. Assets managed by PRI signatories (Private)


SG 10. Promoting RI independently

10.1. Indicate if your organisation promotes responsible investment, independently of collaborative initiatives.

10.2. Indicate the actions your organisation has taken to promote responsible investment independently of collaborative initiatives. Provide a description of your role in contributing to the objectives of the selected action and the typical frequency of your participation/contribution.

Description

          Throughout the year, we have provided trustee training on why ESG is growing in importance and how to integrate ESG considerations as part of their fiduciary duty across the UK.  

We have also organised specific sustainability training days for clients, and several seminars for clients on integrating transition and physical climate risk considerations into their investment portfolios in a variety of countries (France, Canada, UK, Sweden, Finland, Denmark, Norway).  

We also host ongoing webinars on the Bright Talk and Asset TV platforms about the benefits of sustainable investing, sustainability trends, and our research insights e.g. climate change and plastics. 


We have also organised specific sessions for clients on integrating climate risk considerations into their investment portfolios in a variety of regions.
        

Frequency of contribution

Description

          For the third year in a row we sponsored Stellenbosch University and awarded scholarships to students who researched sustainability.
        

Frequency of contribution

Description

          We have engaged academics on our Thought Leadership, in particular our Climate Change work, including discussing that work with students examining climate risks at Imperial College. 

Content from our Demystifying Negative Screening work is now part of a textbook.
        

Frequency of contribution

Description

          We have continued to encourage better transparency and disclosure through our engagements, both individual and collectively.
        

Frequency of contribution

Description

          We spoke about sustainable investment and ESG at key client conferences in Japan, Singapore, the UK, the Nordics, Italy, France and the US as well as industry events such as  Conference Board on Good Governance, European Funds and Asset Management Association (EFAMA), IR society on ESG reporting, and UK Finance on Responsible Banking. We hosted an event with Focusing Capital on the Long Term for clients and companies debating "What is the point of the equity market? “and the Investor Forum. We also spoke at several adviser and para-planning conferences throughout the year.
        

Frequency of contribution

Description

          Authored and published number of papers on our unique climate change insights, most recently looking at the physical risks of climate change (see www.schroders.com/climatechange), as well as our broader sustainability research insights on topics such as cyber security, plastics, responsible lending for autos and the artificial intelligence revolution (see http://www.schroders.com/en/uk/tp/topic-landing-page/?categoryId=499).
        

Frequency of contribution

Description

          Discussed the application process and ongoing requirements to comply with clients who are considering becoming members of the PRI.
        

Frequency of contribution

Description

          We participated in Oxfam's first Investor Advisory Committee set up as part of a new three year campaign looking at shared value in the supermarket sector. We joined several calls during the quarter and contributed ideas about how investors may use the research, create an engagement strategy and provide feedback on an investor briefing document. 
Workforce disclosure project Shareaction: We participated in a second investor roundtable event.  This event focused on the pilot survey findings and discussions around how to promote a higher response rate for the 2018 survey.

Clinical Trial Transparency Survey: We participated in an investor roundtable discussing good practice on Clinical Trial Transparency, indicating our support for new research from Bioethics International which ranks companies according to their transparency on Clinical Trials.  This builds on our efforts to support improved transparency on both positive and negative trial results. A ranking system is useful for providing an external indicator of leaders and laggards.

World Business Council For Sustainable Development (WBCSD): We have fed into audit practices of non-financial data.  

Deutsches Aktieninstitut, (the German association representing listed Companies): We responded to a survey on German corporate governance standards.
        

Frequency of contribution

Description

          Wrote and published a number of articles during the year, some of which are included below: 

Pension funds fail to insulate against climate-change risks (https://www.ft.com/content/99d5c50a-30bf-39c0-b67d-6752abd7e53d)  

Investors ‘remiss’ in overlooking physical climate risks – Schroders: https://www.ipe.com/news/asset-managers/investors-remiss-in-overlooking-physical-climate-risks-schroders/10026329.article


Schroders: World still heading for 4.1°C rise as climate finance slows: https://www.ipe.com/news/esg/schroders-world-still-heading-for-41c-rise-as-climate-finance-slows/www.ipe.com/news/esg/schroders-world-still-heading-for-41c-rise-as-climate-finance-slows/10022867.fullarticle

ESG in passive: let the buyer beware: https://hub.ipe.com/find-research/white-papers/esg-in-passive-let-the-buyer-beware/10027043.article 

Will water become more valuable than oil?: https://www.thetimes.co.uk/static/will-water-become-valuable-oil/ 

Antibiotics: medicine’s Achilles’ heel: https://www.thetimes.co.uk/spon/big-money-debate-antibiotics/ 

Plastic Phase-Out: Which Companies Will Be Most Affected? http://www.publicnow.com/view/E931E31ACE4691716157A9D1FD9E5F89892AB649?2018-04-20-15:30:22+01:00-xxx2998 

2019 Outlook for Sustainable Investment: https://www.agefi.fr/asset-management/actualites/quotidien/20181218/perspectives-2019-l-investissement-durable-263893

Plastic waste management is being renewed: https://www.agefi.fr/asset-management/actualites/quotidien/20181204/gestion-dechets-plastiques-se-reinvente-262738

Evaluating climate change risks: https://www.agefi.fr/asset-management/actualites/quotidien/20190108/comment-evaluer-changement-climatique-264706
        

Frequency of contribution

Description

          As a member of the PRI's Listed Equity Integration Committee, we were a facilitator at a joint workshop run by the PRI and CFA UK. The workshop provided a forum for non-ESG specialist fund managers to discuss the increased demand for ESG from clients and the challenges of integrating ESG into their investment processes, and offered opportunities to discuss solutions. We are also a member of the PRI Plastics Investor group, which is drawing on Schroders value chain model to assess the materiality of plastic reduction. We will have close involvement in helping the group define metrics and engagement questions, drawing on our existing work.
        

Frequency of contribution

10.3. Describe any additional actions and initiatives that your organisation has taken part in during the reporting year to promote responsible investment [Optional]

Throughout the year we have provided trustee training on integrating ESG considerations as part of their fiduciary duty across the UK.

We have organised specific client events focus on discussing how to integrate climate risk considerations into their investment portfolios in a variety of countries (Sweden, Copenhagen, Helsinki, the UK, the Middle East and France).

We have authored several papers to educate clients, including one looking at index-based ESG strategies and another on the challenges and opportunities presented by ESG investing in Emerging Markets. We have also spoken at various events to help trustees understand responsible investing and highlight the importance of considering ESG factors, as well as asset owner best practice across asset classes.

During the year we spoke about ESG at key client conferences in Japan, Italy, Sweden, the Netherlands and the US.

We also hosted ongoing webinars on the Bright Talk and Asset TV platforms about the benefits of sustainable investing and how to incorporate ESG factors in investment.


SG 11. Dialogue with public policy makers or standard setters

11.1. Indicate if your organisation - individually or in collaboration with others - conducted dialogue with public policy makers or regulators in support of responsible investment in the reporting year.

If yes

11.2. Select the methods you have used.

11.3. Where you have made written submissions (individually or collaboratively) to governments and regulatory authorities, indicate if these are publicly available.

11.4. Provide a brief description of the main topics your organisation has engaged with public policy-makers or regulators on.

We have been very engaged with public policy makers and regulators throughout the year, particularly in relation to the EU Sustainable finance proposals. We have engaged directly with MEPs and members of the European Commission, and submitted responses for the Commission Delegated Regulation of the European Parliament amending Regulation (EU) 2017/565, EIOPA's consultation paper on technical advice on the integration of sustainability risks and factors in the delegated acts under Solvency II and IDD, ESMA's MiFID II, the EU Ecolabel for financial products and the European Commission's framework for public reporting by companies.

We also submitted a response to the UK's Competition and Markets Authority statutory audit market study, and the independent review of the Financial Reporting Council and the FSA's draft guidelines for engagement between investors and companies.  We also supported the DWP Consultation on clarifying and strengthening trustees’ investment duties. 

Finally we responded to the FCA's consultation on climate change and green finance, and reviewed the proposed principles and participated in the consultation on the second draft of the EU’s Blue Finance Principles. 

In addition to our own work, Schroders provided input to the IA and EFAMA responses.


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