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Boston Trust Walden

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          Public Policy Advocacy

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

As an investment manager and fiduciary, Boston Trust Walden seeks to ensure our clients' assets are invested in securities that are positioned to manage risk and produce sustainable returns. Our firm has been integrating environmental, social, and governance (ESG) factors into investment decisions since 1975─one of the longest track records of any institutional investment manager. ESG considerations are integral to our investment philosophy. Simply stated, we seek to invest in enterprises with sustainable business models, strong financial underpinnings, prudent management practices, and a governance structure that supports these objectives. We believe ESG factor integration brings an awareness of a spectrum of important long-term financial considerations and risks that may otherwise be overlooked and therefore is an appropriate and material part of a comprehensive analysis. 

Approximately half of our clients who self-identify as sustainable, responsible, or impact investors also have mission or values-based objectives to investment management. Boston Trust Walden has over four decades of experience building portfolios designed to meet values-based objectives.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Our approach includes the following key elements:

Integration of ESG in the Investment Selection and Portfolio Construction Process

  • Fundamental security analysis: ESG analysis is an integral component of our approach to identify and invest in high quality companies. Our dedicated in-house ESG research and engagement team of professionals works concurrently and cooperatively with traditional securities analysts; together they examine a company's ESG performance to enhance our understanding of potential financial outcomes, ranging from risks (losing the license to operate) to opportunities (generating new sources of revenue). ESG analysts also evaluate each company's overall ESG performance (strengths and challenges).
  • Investment Committee review and assessment: Members of the Investment Committee, which includes portfolio managers and analysts, contribute to a thorough assessment of high-quality criteria, including ESG considerations for current and prospective portfolio holdings.
  • Portfolio construction: Our portfolio construction process results in broadly diversified portfolios for our clients. When determining position weights, the portfolio management team considers the high-quality characteristics of companies, including ESG considerations, as well as diversification and risk. Additionally, portfolio managers construct client portfolios to be consistent with each client's objectives, including unique ESG guidelines.

Active Ownership Practices

  • Proxy voting: Our proxy voting policies and guidelines support greater corporate accountability and improved policies and performance on key ESG considerations.
  • Company engagement: On behalf of our clients, we actively pursue company dialogues and file shareholder resolutions to encourage more sustainable business practices and greater transparency and accountability.
  • Public policy advocacy: Public policy advocacy and thought leadership initiatives complement our company-specific engagement efforts and broaden the scope of our impact.

01.6. Additional information [Optional].


SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

The transition risks we have identified and assess, among others, include risk resulting from regulations that affect direct operations and value chains, technological changes, and reputation (brand). Below we provide several specific examples of identified risks and opportunities and how they have been factored into strategies/products. Please note the following list is illustrative and not comprehensive.

  • Example 1: While evaluating several automotive parts companies over the past year, analysts identified as a potential risk these companies face challenges to growth in product categories that focus on traditional internal combustion engine technology as lower GHG emitting technologies become more prevalent. While it was argued that the market for traditional combustion engine technology would not disappear immediately, it was clear the transition to new technologies could present a real headwind to growth. These companies were not approved for investment. 
  • Example 2: The utility sector is particularly exposed to transition risk. Companies with significant coal-fired generating fleets have faced stranded asset risk as natural gas fired generating units became cheaper and regulation increased the cost of environmental compliance for coal-fired plants. In turn, we are closely watching the evolution of renewable technology as a potential threat to natural gas assets. Both generating assets and pipeline infrastructure are potentially at risk. We continue to assess and discuss the potential for asset stranding of natural gas transmission and distribution networks, in a scenario in which regulation pushes consumers away from gas and toward electricity for home heating. We have tended to avoid investment in utilities with generating assets of any kind; we are engaging companies with distribution assets to better understand risks.   

Physical risks have also been identified and factored into our investment decision-making process.

  • Example 3: Part of our analysis of real estate investment trusts (REITs) includes scrutiny of the location of properties, noting that coastal properties in numerous locations are already experiencing increased frequency of flooding. We have also observed an opportunity in the market for REITs that have made investments to offer more climate-friendly properties. We have tended to favor the latter and avoid the former in our investment process. 
  • Example 4: Over the past year, the devastating fires in California and the bankruptcy filing of Pacific Gas & Electric provide another dramatic example of the impact of physical risks, this time driven by a lack of water. Note PGE was not a Boston Trust Walden holding. However, we have reduced our exposure to other electric utilities operating in the state of California.   

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

Climate-related risks are apparent in the short, medium, and long term. At Boston Trust Walden, we consider short term to be 1-2 years, medium term to be 3-10 years, and long term to be 10-10+ years. All the examples provided above are current risks, some of which will likely increase over the medium to long term. 

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.


The potential materiality of climate-related issues depends on a company's sector/industry and its own operating model. Our in-house ESG analysts and traditional securities analysts review a company's climate-related risks and opportunities from numerous perspectives, inclusive of physical and transition risk, each representing short- to long-term considerations, such as:

  • Regulatory risk (e.g., how prepared sectors/industries/companies are for carbon regulation)
  • Operational risk (e.g., business operations at risk due to impacts of climate change)
  • Reputational risk (e.g., how companies are viewed by key stakeholders and customers)
  • Litigation risk (e.g., lawsuits against fossil fuel companies for alleged failure to disclose climate risk)

In addition to risks, we also consider opportunities afforded to companies with products, services, or processes that mitigate climate risk. For example, a company with filtration technology stands to benefit from more stringent clean air regulations, a utility building transmission and distribution infrastructure may benefit from an increase in new renewable energy assets, and a company providing advanced technology to improve the utilization of water in agricultural processes may benefit from increased demand for its products as water stress becomes more apparent.

Our team utilizes a variety of resources including company reports, company responses to the CDP climate survey, third-party ESG data providers, academic and NGO research, and, as appropriate, primary company research.  

The ESG assessment (inclusive of climate-risk) is reviewed and affirmed by designated members of the Investment Committee, usually including the leader of the relevant investment strategy. The assessment is then 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, analyzes all material factors in its review of individual securities, including ESG considerations. Most of our investment professionals on the Investment Committee have some cross-functional experience in traditional and ESG 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 firm’s approved list of securities, taking into consideration client-specific objectives, including ESG and climate objectives.

During the research process, analysts also consider the potential for shareholder engagement to encourage improved management of climate-related risks and opportunities. 

See SG 1.6CC above for further examples. 

Finally, at a portfolio level, we measure and track the weighted average carbon intensity of the portfolio. The results are scrutinized from an absolute (i.e., which companies are the largest contributors) and relative (i.e., how does the portfolio compare to its benchmark) perspective.

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.


          Our TCFD reports are available on our website under Impact Investing Resources:

SG 02. Publicly available RI policy or guidance documents


02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.





Other, specify (1) description

          Public Policy Advocacy


02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

Notwithstanding our responses to SG 02 above, formal corporate policies of Boston Trust Walden, which incorporate ESG policies, are not available to the public. However, we believe our public reporting for PRI (we make public our responses to voluntary, as well as mandatory, questions) and the Boston Trust Walden website provide comprehensive disclosure of our approach to ESG incorporation. We provide a link to our PRI page on our website for easy access (alongside the PRI logo) and reference it in our Annual Impact Report. Upon request, we provide current and prospective clients information about our investment approach, including ESG incorporation.


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Our Director of Risk Management, reporting directly to the Board of Directors, oversees a compliance program to assure the company's longstanding commitment to ethical business practices and a culture of compliance. Our Code of Ethics, approved annually by the Board of Directors, contains provisions designed to reduce conflicts of interest in the investment process, including strict policies addressing the use of material inside information, receipt of gifts, “pay to play,” and employee securities trading activities. Annually, all employees review the Code and certify their commitment to compliance; quarterly, employees report any gift activity and obtain pre-clearance for political contributions in order to monitor compliance with the Code of Ethics. Additionally, personal trading activity is monitored directly from brokerage accounts. Any conflicts of interest or violation of the Code of Ethics are reported to the Executive Committee for resolution, as needed. 

Any potential conflict of interest concerns regarding proxy voting are addressed by our Proxy Voting and Shareholder Engagement Committee (a management committee with board level representation) responsible for overseeing the development and implementation of proxy voting guidelines and processes. Our policy is to vote in the best interests of all clients.

03.3. Additional information. [Optional]

In addition, under certain circumstances a client’s interest may conflict with the interests of Boston Trust Walden or the interests of another Boston Trust Walden client. Many of these conflicts are inherent in the investment management industry and exist with all financial services companies that provide similar services. Boston Trust Walden is subject to various laws and regulations aimed at limiting the potential effects of these conflicts and has adopted policies and procedures to comply with applicable laws and regulations, to mitigate these conflicts where possible, and to ensure that conflicts are appropriately disclosed to clients. These policies cover personal employee behavior as described in our Code of Ethics, as well as policies focused on ensuring that conflicts surrounding trading decisions are mitigated, including trade aggregation and allocation.


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

Boston Trust Walden monitors ESG performance of portfolio companies in a variety of ways:

  • quarterly reviews of prohibited business involvement using screening tools provided by independent ESG research providers, supplemented by primary analysis, as needed;
  • regular reviews of ESG controversies via ESG research provider databases, supplemented by primary analysis, as needed;
  • simultaneous, comprehensive reviews of financial and ESG performance by in-house analysts approximately every 2 years; and
  • ad-hoc reviews as new information arises through numerous in-house research resources.

In addition, the ESG Research and Engagement Committee (REC) reviews and guides methodologies related to ESG investment incidents. The Director of ESG Investing escalates incidents to the Executive Committee, as needed. The Executive Committee (EC), comprised of three Executive Managing Directors, reports to the Boston Trust Walden board of directors and serves at its behest.

Potential changes in investment outlook or engagement opportunities are explored concurrently with the investment team. As needed, we raise questions with portfolio companies and communicate with clients.