In 2019, Dimensional established a new role – Head of Responsible Investment – to coordinate all responsible investment activities across our Research, Portfolio Management, Investment Stewardship, Investment Solutions, and Global Client Group teams. The scope of this role also includes monitoring ESG developments, particularly those involving disclosure and reporting, such as the Task Force on Climate-related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB), and Carbon Disclosure Project (CDP). The team is also involved in the firm's adherence efforts with respect to evolving ESG regulation, particularly in the European Union.
The Head of Responsible Investment provides feedback and information to our Research team and Portfolio Management teams as well as to our Co-CEOs and Chief Investment Officer. This helps shape Dimensional's ESG research agenda as well as the agenda for how to further enhance the integration of ESG considerations into our daily investment process, including but not limited to the expansion and refinement of ESG data sources, enhanced systematic processes to prioritize company engagements, and buy/sell decisions.
The Investment Stewardship Committee, a sub-committee of Dimensional Fund Advisors LP’s Investment Committee, is responsible for ensuring that investment stewardship activities are conducted in line with the Responsible Investment Policy. The Committee, which includes senior executives of the firm along with respected academics, meets quarterly and reviews qualitative and quantitative data relating to proxy voting, engagements and other stewardship activities.
The Research team works closely with Portfolio Management to ensure that timely and accurate ESG data is available for the Portfolio Management team to use in its daily implementation process. In addition, the Research team conducts its own research on the relation between ESG variables and expected returns.
The Portfolio Management team implements ESG within its portfolios on a daily basis, including all equity portfolios generally and also applying additional focus for social and sustainability strategies.