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

PRI reporting framework 2020

You are in Strategy and Governance » Governance and human resources

ガバナンスおよび人事

SG 07. RI roles and responsibilities

07.1. 組織が採用している内部または外部の役割、ならびにそれぞれの責任投資に対する監督責任および実施責任の有無について明示してください。

組織における役職

下記の内部の役割より選択;

          Head of Responsible Investing Office
        

その他の役職(具体的に記入してください) (1)

          Risk Management and Proxy Committees
        

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。

Work continues across the firm to more deeply ingrain the role of RI research within the investment decision process across all asset classes.  Education and training on ESG data resources and their application for portfolio managers and analysts continues through our Head of Responsible Investing Office, Director of Responsible Investing and Director of ESG Integration International. Frequent interactive meetings and presentations are provided to all investment staff relating to sector engagement topics and materiality assessments, themes that cross sectors and asset classes, and individual company assessments.  Additionally, investment teams individually present their integration strategies for assessment on a regular basis. The CEO of Federated Advisory Companies meets regularly with Federated Board members to provide updates on formal ESG integration progress reports for all investment teams and overall responsible investing initiatives within the company.      

Federated's Proxy Voting Committee analyzes proxy issues and develops voting guidelines with the mission of voting in the best interest of long-term value creation for shareholders.  The Proxy Voting Committee meets regularly (at a minimum twice a year) to review its proxy voting guidelines and more frequently if needed.  The rapid expansion of environmental and social data and the increased importance of these factors within the governance framework has resulted in the Proxy Voting Committee periodically amending our policies to address additional environmental and social issues.  Federated's Proxy Voting Committee also oversees the engagement activities of the Proxy Voting Operations Team by providing input on which investee companies to engage with as well as which topics should receive attention.  

The Federated Hermes Responsible Investing Office, in collaboration with the Risk Management Committee and Portfolio Attribution division have created various mechanisms for measuring ESG risk and performance.  Using advanced statistical modeling and factor-based software applications we are able to quantify the active ESG risks our various investment portfolios are exposed to relative to their benchmark and category peers ex-ante.  On a quarterly basis, the Risk Management Committee meets to review product performance which includes a dedicated and systematic assessment of material ESG risk exposures.

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。

45

07.4. 補足情報 [任意]

Responsible Investing Office - 5

  • There are 5 individuals who are dedicated responsible investment staff and who form our Responsible Investing Office (RIO).  RIO was created to serve as an ESG focal point within the firm, providing the infrastructure to support ESG  initiatives across the firm.  Our Responsible Investing Office is focused on the integration of ESG issues and engagement within our investment and proxy voting processes, extending our support of responsible initiatives to the broader investment community, and to support ongoing ESG education of our employees, clients, and the broader public.

EOS at Federated Hermes - 40 

  • Our engagement and stewardship arm, EOS at Federated Hermes, provides one of the largest engagement resources of any fund manager in the world. The team is composed of individuals with a diverse mix of backgrounds, skills and perspectives and has been at the forefront of the development and evolution of responsible investment practices globally.  EOS works closely with investment teams to provide unique and relevant insights about investee companies' and their ability to progress towards agreed-upon ESG objectives.  Importantly, their expertise on E, S and G issues are shared regularly with investment teams through our ESG information hub, seminars/webinars, collaborative engagements and direct conversation.


SG 07 CC. Climate-issues roles and responsibilities

07.5 CC. 気候関連問題について監視、説明責任および/または管理責任をもつ組織の役職を示してください。

取締役会メンバーまたは受託者

最高経営責任者(CEO)最高投資責任者(CIO)最高リスク責任者(CRO)投資委員会

他の最高級職員または部長(具体的に記入してください)

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

投資者関係(IR)

その他の役職(具体的に記入してください)(1)

          Risk Management and Proxy Committees
        

07.6 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

Board-level roles have responsibility for and oversight for any issue which can present material risk to the firm and its strategies.  ESG integration risks are reported regularly to the Board as a component of enterprise risk.

Saker Nusseibeh, CEO of Federated Hermes International, is a Board member. He is founder of the 300 Club, an inaugural member of the CFA Institute's Future of Finance Advisory Council, member of the IIRC Council, the FCA-PRA Climate Financial Risk Forum, the United Nations Environmental Programme Financial Initiative Steering Committee, the Banking Standards Board and the UK National Advisory Board on Impact Investing.

07.7 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。

CIOs ultimately oversee the judgments made by their investment teams about security selection and portfolio construction within the framework of a strategy's investment objective.  The portfolio managers and analysts that report to the CIOs are responsible for assessing as part of their fundamental research process material ESG factors, which include climate-related issues that have the potential to financially impact a security, whether the timeframe is short, medium or long term.  Across all asset classes, portfolio managers and analysts assess a security based on fundamental quantitative metrics and also non-quantitative metrics, including relevant ESG factors.  Investment teams are incorporating ESG data and research, such as MSCI ratings and proprietary QESG scores of covered companies, into the framework of their credit and stock selection processes.  Investment teams and the CIOs to whom they report, now apply the added lens of ESG factors as additional insight into the risks a company or issuer may be exposed.

As part of our assessment and management of climate-related issues, our investment teams have access to the Carbon Tool, developed by the international business of Federated Hermes.  Carbon Tool: Our Carbon Tool, launched in 2018, enables fund managers and engagers to identify carbon risks in listed investment portfolios and specific companies that are or might become more exposed to carbon risks in the future.  Importantly the tool incorporates our stewardship activity and intelligence and is able to identify companies that are priorities for engagement and their progress against objectives.  This tool evaluates the impact that investment funds have on the climate by:

  • Measuring carbon risk and footprint of an investment fund relative to its benchmark as well as listed companies relative to their peers, including Scope 1, 2 and 3 emissions.
  • Calculating the value at risk for an investment fund according to different carbon pricing and policy scenarios.
  • Identifying companies with which carbon-focused engagement should be initiated or intensified.
  • Gauging the level of carbon risk being engaged on within portfolios -- and progress achieved.

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。

取締役会メンバーまたはトラスティ―(受託者)

08.1b. 個人の能力開発または研修計画における責任投資

08.2. 報告年度に取締役が責任投資に関連したスキルや知識を開発し、維持するために行った活動について説明してください。

Multiple presentations have been provided to the Board related to responsible investing including a formal ESG integration progress report for each investment team across all asset classes. Education on the depth and breadth of ESG factors and active engagement have been featured along with the importance of these factors and their contribution to a more positive risk reward profile of our investment portfolios.  A presentation was made by Federated's Head of Responsible Investing Office and the Director of Responsible Investing to one of our independent director's own company board of directors to educate them on sustainable investing, ESG materiality, and what responsibilities boards have in understanding and implementing RI initiatives within their own  companies. 

最高経営責任(CEO)、最高投資責任者(CIO)、最高執行責任者(COO)、投資委員会

08.1a. 目標、評価、査定または報酬における責任投資

08.1b. 個人の能力開発または研修計画における責任投資

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

          Head of Responsible Investing Office
        

08.1a. 目標、評価、査定または報酬における責任投資

08.1b. 個人の能力開発または研修計画における責任投資

ポートフォリオマネージャー

08.1a. 目標、評価、査定または報酬における責任投資

08.1b. 個人の能力開発または研修計画における責任投資

投資アナリスト

08.1a. 目標、評価、査定または報酬における責任投資

08.1b. 個人の能力開発または研修計画における責任投資

専任の責任投資担当者

08.1a. 目標、評価、査定または報酬における責任投資

08.1b. 個人の能力開発または研修計画における責任投資

その他の役職(1)[SG 07から] 具体的に記入してください

          Risk Management and Proxy Committees
        

08.1a. 目標、評価、査定または報酬における責任投資

08.1b. 個人の能力開発または研修計画における責任投資

08.3. 組織の責任投資に関連したパフォーマンス管理、報奨や個人の能力開発プロセスについて詳細を説明してください。

Every Federated Hermes employee is committed to conducting business in accordance with the highest legal and ethical standards. At the highest levels of the firm a commitment has been made to make responsible investing an integral part of our corporate culture. Our firm has introduced a corporate pledge which is intended as a clear signal of what we aspire to embody and is the foundation of our commitment to always put clients and beneficiaries first and to act responsibly and transparently (https://www.federatedhermes.com/about/).  Because we are an investment management firm and investment products are our key output, the firm's focus has been to ensure that our investment teams have the best ESG tools and resources available to them for integrating ESG considerations, as appropriate, into their investment decision-making and valuation processes. 

Federated's Director of Responsible Investing, working in tandem with the Director of ESG Integration International, has as his primary responsibility the continuing education of investment teams about ESG issues and building those factors into the framework of their investment processes.  Together with Federated Hermes International, Federated has implemented a program of continuing education with a focus on sectors, industries, themes and investment analyses which enhance the portfolio manager's ability to identify material factors that may influence the risk assessment of a company and provide forward looking views of its sustainability.  Investment teams are also provided with training on ESG integration tools such as the Carbon Tool, corporate governance tool and EOS engagement analytics, our ESG Dashboard as well as materials available from SASB, MSCI and Sustainlytics. The CIOs now have ESG integration progress in their performance appraisal goals and are encouraged to identify specific opportunities within their asset classes that can be improved through the addition of material ESG factors.   This is considered part of the performance management process and is a factor in their variable incentive plan.

Federated Hermes has also undertaken responsible investing initiatives in other areas of the company reflecting a commitment to educating all of our employees and the public more broadly about  ESG issues.  We rolled out a Responsible Investing Center on our website which provides information about  ESG investing, case study examples, and thought leadership on stewardship and ESG integration.  For our employees, Federated offers online training materials, of which an ESG Academy is the centerpiece.  The Academy is accessible to all employees and educates employees about the fundamentals and evolution of ESG investing.  Federated leveraged that information to create and implement an online ESG training module for one of our largest clients.

 


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