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Lombard Odier

PRI reporting framework 2020

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Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

At the Lombard Odier Group level, our sustainability philosophy, investment approach, and related policies are overseen by a Sustainability Steering Forum, which meets at least every two months, and at particular times as frequently as on a weekly basis. This Forum is also responsible for agreeing and reviewing the firm’s overall objectives for its responsible investment activities. This Forum is made of senior management representatives from across our business, including members of the Board of Managing Partners.

In addition, the Stewardship Committee within LOIM is responsible for oversight and guidance relating to the discharge of our stewardship responsibilities for internally managed funds. Its members are representatives from across our asset classes, our two dedicated sustainability teams, and the compliance, risk and legal departments. It reviews and gives guidance on voting and engagement, serving also as escalation mechanism for votes/engagements when necessary. It is also the final arbiter of any disputes. The Committee is also responsible for the final sign-off on voting/engagement reports to boards and committees

Our policies relating to sustainability are reviewed at least once a year and may also be updated on an ad-hoc basis as and when required (e.g. by law following a new regulation to transpose or following an internal policy update). All new, amended and retired policies require Board approval.

SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          Number of internal training sessions related to ESG - SRI strategies.
Ongoing qualitative assessment of internal knowledge regarding our sustainable investment philosophy, approach, tools and offering.

Progress achieved

We consider it essential that our employees are regularly updated on the latest developments, tools and technologies relating to sustainability and ESG integration. Our dedicated sustainability teams regularly provide comprehensive training on our sustainable investment frameworks to ensure high levels of understanding and engagement. Our approach to training and knowledge-sharing is both continuous and collaborative to ensure the information provided reflects our latest thinking and capabilities, and is tailored to individuals' requirements. This is also reflected in the daily discussions between our sustainability teams and other functions around the business. Our dedicated sustainability professionals are in constant contact with portfolio managers and analysts, for example, to help them interpret sustainability-related data and analysis, and/or to help guide stewardship & dialogue with companies. Formal training can take the form of intensive training sessions covering the concepts, tools and technique we employ on a one-on-one basis or in small groups. It can also take the form of discussion groups focused on employees from particular areas of the business or those with a shared focus or objective.

These initiatives receive strong support from senior management, who often take part in the training sessions and who place significant emphasis on their importance.

Key performance indicator

          Provide training on ESG engagement to investment analysts and portfolio managers

Progress achieved

During 2019 we worked with a leading external consultant, Arkadiko Partners, to review and improve our engagement capabilities, and to help train key staff members on our engagement policy and practices.

Key performance indicator

          Internal communications and knowledge-sharing activities linked to sustainability.

Progress achieved

In 2019, LO introduced our Lunch & Learn sessions, which are open to all employees of LOIM and offer a program of educational sessions covering all aspects of sustainable investment from our philosophy, developments in our capabilities and offering, to integration into specific products. This program is carefully designed to focus on the most pertinent developments and to ensure high levels of engagement, understanding and consistency across our workforce. From a Private Banking standpoint, sustainability is a regular toic of discussion at weekly meetings attended by bankers and advisors. Additionally, e-learning modules on sustainability are available to all staff.

Sustainability is also included in our new-joiner induction program for all new Lombard Odier employees. We continue to increase our focus on sustainability-related thought leadership and strategic developments across our internal intranet and other communications activity, including hosting internal townhalls.

Key performance indicator

          Addition of materiality to engagement issue identification.
Increase in proactive engagement with companies.

Progress achieved

During 2019 we added materiality analysis to the identification of issues to engage with companies on, and also extended a program of systematic proactive engagement across our convertible bond portfolio.

          Continued data and research development

Key performance indicator

          Ongoing testing and assessment of our methodology.
Percentage of investment universe covered by ESG and sustainability data / analysis.

Progress achieved

During 2019 we developed our data and analysis capabilities significantly, adding coverage of new companies as well as the scope of sustainability issues analysed. In particular, we have been working to enhance our forward-looking dataset to improve our scenario analysis and enhance our understanding of industry/sector level exposure to material forward-looking sustainability challenges.

Financial performance of investments

ESG characteristics of investments

Other activities

Key performance indicator

          Qualitative assessment of strategic alignment and importance of initiatives joined, and potential for contribution to sustainable outcomes.
Participation in initiatives.

Progress achieved

In March 2019, Lombard Odier received the B Corp certification  from leading global sustainability non-profit organisation B Lab, in recognition of our corporate sustainability practices. The B Corp certification is one of the world’s most advanced ratings for corporate sustainability. Becoming a ‘B Corp’ involves a rigorous assessment of a company’s environmental and social performance and governance. It measures how companies manage its people, environmental footprint, products, suppliers and the communities with whom they interact.
During 2019 LO also became supporters of the final recommendations of the Taskforce for Climate-related Financial Disclosure (TCFD), was a signatory of the Global Investor Statement on Climate Change 2019 and became members Energy Transitions Commission.

06.2. Additional information.