Provide training on ESG incorporation - Progress Achieved (cont)
Wellington has a formal internal review process for all portfolio managers through a series of peer review groups comprised of senior management and investment personnel. The reviews conducted by these groups generally cover a manager’s investment philosophy, process, performance, portfolio characteristics, adherence with compliance standards, and the people and resources that support the investment management of client portfolios. The goal of the process is to review all teams or managers of client portfolios on an annual basis. The portfolio manager’s ESG integration approach is discussed in this forum, and the Director of ESG Research, Director of Sustainable Investment, and ESG analysts are regularly present to provide feedback and suggestions.
Every spring, the ESG Research team hosts a proxy season preview to educate investors about major governance developments, focusing on a selection of ‘hot topics’ we expect to be most pertinent throughout the season. This gives the ESG Research team an opportunity to reiterate any shifts in our approach to vote recommendations on certain topics. These sessions deepen understanding of key issues ahead of time so that we can have more productive debates about significant votes.
As engagement and dialogue with boards has become a more significant input into our ESG analysis, the ESG Research team interviewed numerous public company board directors to gain perspective about how we can better assess corporate boards. We synthesized and disseminated to investors tips for engaging with boards, the best questions to ask, and potential red flags when evaluating boards.
We also conduct training on material ESG themes. In developing these materials, we leverage relevant expertise around the firm. Examples of past and ongoing training modules include:
At the conclusion of the research on each variable, representatives from Woods Hole Research Center (WHRC) and Wellington present the scientific findings and capital market implications to investors. This forum provides investors with a regular opportunity to ask questions directly to WHRC scientists and debate capital market implications with the broad investment community. In addition, weekly meetings deepen the scientific understanding of a subset of cross-asset class investors expected quarterly update meetings to discuss scientific findings. This has been underway since September 2018 and will continue on a periodic basis for the next several years.
At the beginning of 2020, the ESG Research team developed a training module focused on carbon emissions, footprinting, and transition risks. Multiple sessions are being provided to all levels of seniority and customized by group including investors on the Investment Platform, Investment Products & Fund Strategies, and Global Relationship Group. We review key terminology of carbon and transition risks, discuss data sourcing and estimation methodology of major providers, evaluate the calculation methodology behind carbon footprint analysis, and debate the merits and drawbacks of using carbon emissions as a proxy for policy risk across different geographies and industries.
In 2019, our Director of Sustainable Investment held regional training sessions open to all colleagues on the topic of ESG and Sustainable Investment. In addition, we held a dedicated session for our Investment Research group, and we launched a four-part training series for our Global Relationship Group.
In addition, Wellington Management maintains multiple internal email distribution lists related to ESG and sustainable investing in order to facilitate information sharing across multiple functions of the firm. Content shared in this forum could include trends or common questions among clients of a certain channel and recent academic studies regarding ESG.