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Federated Hermes, Inc. (formerly Federated Investors, Inc.)

PRI reporting framework 2020

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You are in Strategy and Governance » Promoting responsible investment

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]

  • Federated attended the PRI in Person global conference in Paris and a regional event in New York City.
  • Federated was a panelist on a Responsible Investment Panel along with the PRI's Head of the Americas at a responsible impact investing seminar designed to educate pension funds about the benefits of ESG criteria when considering real estate portfolio investments.

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]

Federated is a signatory of the CDP Climate Change.

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]

Federated is a signatory of the CDP Forests.

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]

Federated is a signatory of the CDP Water.

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] 

          Responsible 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] 

          ICI ESG Task Force

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] 

          SASB

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]

During the course of the reporting year we deepened our relationship with SASB.  Federated Hermes investment teams increasingly incorporated SASB sector materiality maps into their proprietary investment strategy frameworks.  SASB thematic deep dive webinars provided investment teams with relevant sector insights.  Our Director of Responsible Investing now serves as a member of the SASB Standards Advisory Board, a group of volunteer industry experts who advise SASB on emerging issues that should be considered in the standards development process.

SG 09.2. Assets managed by PRI signatories (Not Applicable)

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 

          A presentation was developed by our Equity Strategist regarding the ever-increasing relevancy and importance of ESG factors within the investment process.  The presentation is targeted to financial advisors and is approved for CE credit.  Also, an employee training module on the topic of ESG investing was developed for a client asset owner and provided to them for use as an online training resource.

Frequency of contribution

Description 

          Federated engaged two recognized experts in U.S. trust and fiduciary law to frame the conditions under which they believe ESG investing (defined as negative screening, ESG integration or impact investing) is possible by a fiduciary subject to U.S.  Federated hosted a symposium for clients, broker dealers, investment advisers and legal advisers where the findings from their scholarly analysis were presented, debated and discussed.

Frequency of contribution

Description 

          Federated's Director of Responsible Investing serves as an Adjunct Professor of Sustainable Finance at the University of Rochester Simon Business School in New York.  In his professorship, Mr. Jarzebowski supervises ESG academic research and lectures in sustainable finance to MBA and Masters level students for one of the top ranked graduate finance programs in the United States.

Frequency of contribution

Description 

          Federated responded to a request for input from the U.S. GAO (General Accountability Office) regarding ESG disclosure by public companies.  During our meeting Federated recommended standardizing disclosure by using the SASB and TCFD frameworks across the industry.  We also endorsed the use of the UK gender pay gap reporting framework.

Frequency of contribution

Description 

          Our Director of Responsible Investing and Director of ESG Integration International are regular speakers and panelists at industry conferences.  Also, our CIO of Liqudity spoke at three global financial institution conferences regarding the role of ESG integration in short-term debt instruments.

Frequency of contribution

Description 

          A paper regarding the role of ESG integration within liquidity products, i.e. short-term debt instruments, was co-authored by Federated's CIO of Global Liquidity, the Head of the Responsible Investing Office and the Director of ESG Integration International.  Also, our Director of Responsible Investing has authored three articles related to ESG integration which reside on our public website.  Each of the articles highlights a specific topic related to responsible investing including a case study on the importance of corporate governance in private markets, the sustainability and materiality of global drug pricing, and the role of ESG integration in the investment process for purposes of risk mitigation.

Frequency of contribution

Description 

          Federated's Director of Responsible Investing has authored multiple articles which reside on our corporate website, have been featured in financial media, and have been distributed to employees, clients, prospective clients, and the general public.  Each of the articles highlights a specific topic related to responsible investing including a case study on the importance of corporate governance in private markets, the sustainability and materiality of global drug pricing, and the role of ESG integration in the investment process for purposes of risk mitigation.  Many of the same financial publications contact our Director of Responsible Investing for interviews on the topice of ESG integration and ESG generally.

Frequency of contribution

Description 

          Federated's Director of Responsible Investing has become a member of the Standards Advisory Board of the Sustainability Accounting Standards Board (SASB).  He will serve in the Healthcare sector. The SASB Standards Advisory Group is comprised of volunteer industry experts who advise SASB on emerging issues that should be considered in the standards development process.

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]

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.

Federated conducted face-to-face meetings with the Securities and Exchange Commission (SEC) commissioners and with the GAO (U.S. Government Accountability Office).  With the SEC, Federated reviewed an analysis done by two legal scholars on the law and economics of ESG investing by a fiduciary subject to U.S. law in order to provide a framework for discussion.  With GAO, Federated was asked to comment for a study it was conducting regarding ESG disclosures by publicly traded companies.

U.S. Fiduciary Law

Federated Hermes met with the SEC commissioners regarding fiduciary law, ERISA and ESG investing.  Federated engaged two recognized experts in U.S. trust and fiduciary law to frame the conditions under which they believe ESG investing (defined as negative screening, ESG integration or impact investing) is possible by a fiduciary subject to U.S. law.  Their legal and scholarly analysis of the law and economics of ESG investing by a fiduciary subject to U.S. law provided a framework for discussion.

ESG Disclosure by Publicly Traded Companies

Federated participated in conversations with the GAO regarding a study the agency was conducting examining issues related to ESG disclosures by publicly traded companies.  Discussions focused on the extent to which public companies address ESG matters in their public disclosures, the extent to which investors seek greater disclosure, options for Congress to consider and how U.S. ESG disclosure differs from those of other countries.
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