Federated investment teams incorporate ESG issues into the investment process across all asset classes. In some cases, where third- party or even proprietary ESG data is not widely available, such as for small caps, high yield or municipal, and asset-backed securities, those Federated investment teams have developed proprietary frameworks for incorporating ESG factors into their fundamental equity and credit analysis process. In addition, all investment teams are equipped with proprietary ESG tools such as the Carbon Tool, Portfolio Snapshot Tool, Corporate Governance Tool and Engagement Analytics providing fund managers with unique information by which to assess an investee company and holistic portfolio ESG risks.
We believe one of the most distinguishing features of Federated Hermes' approach to responsible investment is the access to corporate engagement specialists through EOS at Federated Hermes (EOS). EOS' constructive approach to engagement contextualizes ESG issues within a company's business purpose and strategy, setting it apart from other engagement services. EOS targets financially material ESG issues that may be limiting long term sustainable value creation or increasing companies' risks. They target Board and Executive level face-to-face engagement which sets and measures progress against specific objectives using their proprietary milestone system. Their focus on opportunities as well as risks provides enhanced ability to extract value from ESG data.
The Federated Office of Responsible Investing acts as a multidisciplinary hub of ESG expertise to support and assist every employee and division in our business to work toward our mission of delivering holistic returns, industry ESG thought leadership and internal corporate responsibility.