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Boston Trust Walden

PRI reporting framework 2020

You are in Strategy and Governance » Objectives and strategies

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]

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.

While the ESG team has day-to-day responsibility for ESG research and engagement, our monthly meeting of the ESG Research and Engagement Committee (REC) provides an opportunity to communicate and discuss timely and regular (monthly and annual) assessments of ESG goals and performance. REC, chaired by the Director of ESG Engagement, 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 Director of ESG Investing reviews and guides methodologies on emerging or complex ESG research issues, works with the Chief Investment Officer and ESG Integration Manager to develop and refine policies on ESG factor integration, and reviews and monitors company engagements and public policy priorities.

Finally, our Proxy Voting and Shareholder Engagement Committee has oversight responsibility for proxy voting policies and practices and reviews and affirms annually active ownership priorities, goals, and progress. The Director of ESG Investing and two Executive Managing Directors serve on this Committee. 


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

          Enhance ESG integration expertise of staff, including ESG analysts and traditional analysts, through knowledge sharing, offering training programs, and encouraging pursuit of certifications.
        

Progress achieved

Examples of progress achieved include:

  • Based on recommendations to the Investment Committee from two investment analysts who completed and passed the SASB FSA credential exam in 2018, one additional analyst pursued certification in 2019 and at least three others have committed to doing so in 2020. 
  • ESG integration and active ownership topics were addressed at key cross-organizational meetings, including the Research and Engagement Committee meetings, and knowledge sharing between ESG and traditional analysts continued, including as part of onboarding new associates. 
  • Brown-bag lunches on various topics, including several on ESG issues, were also offered to all employees throughout the year. 

Key performance indicator

          Expand ESG professional's role to include direct company engagement, as well as research and analysis, by deepening knowledge base and building engagement skills.
        

Progress achieved

Broadened the scope of responsibilities for a member of the ESG team to include both assessing the ESG performance of current and potential portfolio companies, as well as leading shareholder engagement initiatives related to a wide range of sustainability issues, including equality and sustainability disclosure. 

Successfully on-boarded two new ESG analysts, providing training on active engagement initiatives spanning direct company engagements, collaborative engagements, multi-stakeholder initiatives, and public policy efforts. The engagement training  allowed both analysts to seize opportunities to support and lead engagements across a variety of climate and governance-related issues.

Key performance indicator

          Ensure active cross-organizational participation in monthly Research & Engagement Committee (REC) meetings, the main forum for in-person updates and discussions regarding active ownership efforts.
        

Progress achieved

Active, on-going participation in REC meetings by employees across the firm, including executive managing directors, portfolio managers, analysts, and business development professionals. 

Key performance indicator

          Instituted a formal annual review and affirmation of core engagement strategies, initiatives, and impact by the Proxy Voting and Engagement Committee.
        

Progress achieved

In 2019, core ESG engagement priorities, strategies, and goals were reviewed and affirmed by the Proxy Voting and Engagement Committee. By focusing on core areas of leadership (climate change, equality, lobbying transparency, and proxy voting by other investment managers), we are enhancing the efficiency and effectiveness of our engagement initiatives. 

In 2019, Boston Trust Walden engaged 60% of portfolio companies across investment strategies (excluding the Walden International Equity Fund that represents less than 1% of assets); 43% demonstrated improvement in policies, practices, and/or transparency. Outcomes of engagement are detailed in our published Annual ESG Impact Report 2019 and described later in the Listed Equity Active Ownership section of this report.

[The Annual ESG Impact Report 2019 is available at https://www.bostontrustwalden.com/wp-content/uploads/2020/02/2019-ESG-Impact-Report_Digital-PDF.pdf]

          Provide industry leadership with respect to tracking, assessing, and reporting on the impact of ESG engagement addressing company performance.
        

Key performance indicator

          Continue to refine the Boston Trust Walden approach to track, assess, and report on ESG impact on a quarterly and annual basis.
        

Progress achieved

We produced three quarterly and one annual ESG impact report comprehensively demonstrating our active ownership efforts and results across the full range of Boston Trust Walden's approaches:

  • active ownership through effective engagement with portfolio companies;
  • active ownership through proxy voting; 
  • integration of ESG factors into investment decisions; 
  • advocating for effective public policies; and
  • contributing to industry thought leadership.

In addition to reporting our annual impact metric, we continued to report a three-year cumulative impact metric to more closely align with the multiple-year horizon of corporate change. Over the past three years, we engaged 80% of companies held in client portfolios as of December 31, 2019 and achieved an impact rate of 56%.

other description (2)

          Produce a report consistent with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).
        

Key performance indicator

          Produce and publicly disclose a report consistent with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).
        

Progress achieved

Produced and published a climate change report based on TCFD guidelines. Both current and prior year reports available on Boston Trust Walden's website under Impact Investing Resources: https://www.bostontrustwalden.com/investment-services/impact-investing/resources/.

Financial performance of investments

ESG characteristics of investments

Key performance indicator

          Refer to LEI section for examples.
        

Progress achieved

Refer to LEI section for examples.

Other activities

Key performance indicator

          Continue to lead and participate in collaborative RI initiatives. Emphasize leadership on collaborations addressing our core engagement areas (i.e. climate change, equality, governance).
        

Progress achieved

Numerous examples appear in the following pages, including collaborations with Ceres, IAHR, ICCR, PRI, SASB, and US SIF. Please see LEI, LEA, and our Annual ESG Impact Report 2019 for more details.

Key performance indicator

          Encourage clients, as appropriate, to join in various RI initiatives.
        

Progress achieved

Numerous clients participated in RI collaborations in their own names.

Key performance indicator

          Publish in-house, and contribute through external publications on, best practices in ESG integration and engagement.
        

Progress achieved

Examples include:

  • Published three quarterly ESG Impact Reports and an Annual Impact Report 2019. These reports document leading practice ESG engagement initiatives involving multiple topics and companies (e.g. a case study on initiatives encouraging investment firms to vote proxies and engage responsibly on ESG factors).
  • Produced and published a climate change report based on TCFD guidelines. Available under Impact Investing Resources at https://www.bostontrustwalden.com/investment-services/impact-investing/resources/. 

We also provided input and case studies for external publications (e.g. PRI's SDG Case Study: Engaging on Corporate Public Policy Lobbying and Converging on Climate Lobbying: Aligning Corporate Practice with Investor Expectations and the Global Impact Sourcing Coalition's Reducing Poverty through Employment Toolkit)

 

Key performance indicator

          Regular written documentation of ESG incorporation and verbal reports at client meetings.
        

Progress achieved

The examples above (e.g., quarterly and annual ESG impact reports) are provided to clients and ESG incorporation strategies, including best practice case studies, are discussed routinely at many in-person client meetings.

06.2. Additional information.


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