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Boston Trust Walden

PRI reporting framework 2020

You are in Strategy and Governance » Governance and human resources

Governance and human resources

SG 07. RI roles and responsibilities

07.1. Indicate the internal and/or external roles used by your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for responsible investment.

Roles

Select from the below internal roles

          Director of ESG Investing
        

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

ESG/RI strategy, oversight, and implementation is a shared responsibility at Boston Trust Walden.

The Board of Directors oversees all investment activities of Boston Trust Walden, including responsible investment strategy and implementation. Three Executive Managing Directors comprise the Executive Committee (EC), including the CIO. The Director of ESG Investing reports to and meets regularly with the CIO to establish, monitor, review, and revise RI objectives and priorities. The Director of ESG Investing oversees a seven-person in-house ESG team and is responsible for overseeing ESG research, ESG integration, ESG engagement, and proxy voting. In addition to the Director of ESG Investing, dedicated ESG staff include two senior professionals, three ESG analysts, and one ESG associate. 

ESG professionals are responsible for performing ESG factor research and analysis, which is distinct from the work of traditional securities analysts. ESG research and traditional research are concurrent, often iterative, and mutually informative. Together, ESG analysts and securities analysts review a company's ESG performance and assess its financial materiality with respect to a range of possible financial outcomes (license to operate, risk reduction, operational efficiencies, competitive positioning, and new market opportunities).

This ESG materiality assessment is reviewed and affirmed by designated members of the Investment Committee, usually including the CIO or the leader of the relevant investment strategy. The recommendation is presented to members of the Investment Committee by the securities analyst, and, as needed, the ESG analyst. The Investment Committee, comprised of all portfolio managers and analysts, assesses all material factors, including ESG considerations, in its review of individual securities. The Investment Committee is ultimately responsible for ESG factor integration. Most of our investment professionals on the Investment Committee have some cross-functional experience in traditional and ESG factor research. The work of the Investment Committee results in a thorough assessment of a company's appropriateness for client portfolios.

Individual portfolio managers are responsible for constructing portfolios from the approved list, taking into consideration client-specific objectives, including ESG objectives. All Boston Trust Walden portfolio managers incorporate ESG objectives.

ESG professionals lead Boston Trust Walden's active ownership initiatives, which are detailed in the LEA section of this report.

The ESG Research and Engagement Committee (REC) also plays an important role. Chaired by the Director of ESG Shareowner Engagement, REC includes various members of the Executive Committee and Boston Trust Walden board of directors, as well as portfolio managers, securities analysts, and ESG team members. The committee reviews and discusses active ownership efforts, including company engagements and public policy priorities, and provides input on emerging or complex ESG research issues. 

With respect to proxy voting, the Chair of the Proxy Voting and Shareholder Engagement Committee oversees the process from the creation of proxy voting guidelines to the casting of votes. We rely on an external proxy advisor, ISS, to provide proxy research and implement our custom proxy voting guidelines via electronic voting (which includes referring certain proxy items back to our attention). Boston Trust Walden reviews the votes populated by ISS, and, as appropriate, overrides the ISS interpretation of our proxy voting policies.

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

7 Number

07.4. Additional information. [Optional]

The seven-person dedicated ESG team has primary responsibility for ESG research, integration, and engagement and reports to the Director of ESG Investing. The Director of ESG Investing reports directly to the Chief Investment Officer, also an Executive Committee member. Additionally, many employees contribute to RI activities at Boston Trust Walden. 

Members of the Investment Committee and the ESG Research and Engagement Committee who do not have day-to-day ESG analysis responsibility have varying degrees of ESG research expertise. In these settings, non-ESG dedicated employees regularly contribute to ESG integration and engagement initiatives. All portfolio managers and traditional securities analysts (who are not identified as dedicated members of the ESG research and engagement team) are involved in ESG integration as described earlier. Finally, Proxy Voting and Shareholder Engagement Committee members, who oversee proxy voting policies and practices and active ownership initiatives, represent a mix of dedicated ESG and other investment professionals. Hence, essentially all Boston Trust Walden investment professionals contribute to RI activities and can speak knowledgeably on ESG topics and processes with clients.


SG 07 CC. Climate-issues roles and responsibilities

07.5 CC. Indicate the roles in the organisation that have oversight, accountability and/or management responsibilities for climate-related issues.

Board members or trustees

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Risk Officer (CRO), Investment Committee

Other Chief-level staff or heads of departments

Portfolio managers

Investment analysts

Dedicated responsible investment staff

External managers or service providers

07.6 CC. For board-level roles that have climate-related issue oversight/accountability or implementation responsibilities, indicate how these responsibilities are executed.

ESG/RI strategy development, oversight, and implementation is a shared responsibility at Boston Trust Walden. This applies to climate-related issues, as well as all other ESG matters.

Our nine managing directors have both board and management-level roles in our employee-owned organization. They oversee all investment activities of Boston Trust Walden, including investment strategy and implementation, which includes considerations related to climate change.

Three Executive Managing Directors comprise the Executive Committee (EC), including the CIO. The Director of ESG Investing reports to and meets regularly with the CIO to establish, monitor, review, and revise RI objectives and priorities. The Director of ESG Investing oversees a seven-person in-house ESG team and is responsible for overseeing ESG research, ESG integration, ESG engagement, and proxy voting. In addition to the Director of ESG Investing, dedicated ESG staff include two senior professionals, three ESG analysts, and one ESG associate. All these functional areas have a significant climate component.

With respect to proxy voting, the Chair of the Proxy Voting and Shareholder Engagement Committee oversees the process from the creation of proxy voting guidelines to the casting of votes. We rely on an external proxy advisor, ISS, to provide proxy research and implement our custom proxy voting guidelines via electronic voting (which includes referring certain proxy items back to our attention). Boston Trust Walden reviews the votes populated by ISS, and, as appropriate, overrides the ISS interpretation of our proxy voting policies.

The ESG Research and Engagement Committee (REC) also plays an important role. Chaired by the Director of ESG Shareowner Engagement, REC includes various Executive Committee and Boston Trust Walden board members, as well as portfolio managers, securities analysts, and ESG team members. The committee reviews and discusses active ownership efforts, including company engagements and public policy priorities, and provides input on emerging or complex ESG research issues. This process incorporates our assessment and management of climate-related risks and opportunities. See SG 07.2 and 07.4 for additional detail.

07.7 CC. For management-level roles that assess and manage climate-related issues, provide further information on the structure and processes involved.

Reporting to the Chief Investment Officer who is also an Executive Committee member, the Director of ESG Investing oversees ESG research, ESG integration, ESG engagement, and proxy voting. All these functional areas have a significant climate component.

The seven-person dedicated ESG team has primary responsibility for ESG research, integration, and engagement and reports directly to the Director of ESG Investing (who reports to the Chief Investment Officer, also an Executive Committee member). Additionally, most employees contribute to RI activities at Boston Trust Walden. 

Members of the Investment Committee and the ESG Research and Engagement Committee who do not have day-to-day ESG analysis responsibility have varying degrees of ESG research expertise, including on issues of climate and clean energy. In these settings, non-ESG dedicated employees regularly contribute to ESG integration and engagement initiatives. All portfolio managers and traditional securities analysts (who are not identified as dedicated members of the ESG research and engagement team) are involved in ESG integration as described elsewhere. Finally, Proxy Voting and Shareholder Engagement Committee members, who oversee proxy voting policies and practices and active ownership initiatives, represent a mix of dedicated ESG and other investment professionals. Hence, essentially all Boston Trust Walden investment professionals contribute to RI activities and can speak knowledgeably on ESG topics and processes, including those that are climate-related, with clients.


SG 08. RI in performance management, reward and/or personal development

08.1. Indicate if your organisation’s performance management, reward and/or personal development processes have a responsible investment element.

Board members/Board of trustees

08.1b. RI in personal development and/or training plan

08.2. Describe any activities undertaken during the reporting year to develop and maintain Board members’ skills and knowledge in relation to responsible investment.

Boston Trust Walden is a mid-sized, employee-owned investment management company. The nine managing directors that serve on Boston Trust Walden's Board of Directors are current employees directly involved in responsible investment activities. Growing our responsible investment practice is a strategic priority for the firm; hence, the Board of Directors regularly discusses the industry landscape. We believe supplemental skills and knowledge building activities are not necessary at this time.

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Operating Officer (COO), Investment Committee

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Other C-level staff or head of department

          Director of ESG Investing
        

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Portfolio managers

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Investment analysts

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Dedicated responsible investment staff

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

08.3. Provide any additional information on your organisation’s performance management, reward and/or personal development processes in relation to responsible investment.

All investment staff are incentivized on RI/ESG considerations because ESG analysis and engagement activities are fully integrated into the investment process at Boston Trust Walden. However, with the exception of the dedicated ESG staff, individuals are not expected to meet (and therefore not compensated for) specific RI/ESG targets. Investment professionals at Boston Trust Walden are rewarded for their overall contributions to the investment process, client service, and business development. Boston Trust Walden explicitly avoids discrete incentive measures that we believe may risk distorting an individual's long-term outlook and contribution. Compensation practices prioritize a "cumulative value-added" (or multiple year) approach to performance evaluations.

With respect to personal development and training activities, the dedicated ESG team works closely with all Boston Trust Walden investment professionals, providing ongoing education related to pertinent ESG topics on both a periodic and ad-hoc basis. The ESG Research & Engagement Committee keeps participants updated on trends, developments, and new research related to responsible investing.

In addition, other Boston Trust Walden investment professionals, including the dedicated ESG team, participate in and occasionally lead, webinars and educational forums through our memberships in responsible investment associations such as PRI, US SIF, ICCR, Ceres, INCR, BASIC, etc.

 


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