This report shows public data only. Is this your organisation? If so, login here to view your full report.

Loomis, Sayles & Company, L.P.

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 Firm's ESG objectives are within the purview of the ESG Committee, led by the director of ESG, with input and approval of the CEO and the ESG Advisory Board.  The ESG committee meets at least monthly to review the responsible engagement activities of Loomis Sayles, to further the integration of ESG issues into the investment process (including providing state of the art tools to Loomis Sayles' investment professionals), to oversee activities related to membership in advocacy groups, including the UNPRI and the UK Financial Reporting Council (UK Stewardship Code), and to further the progress of Loomis Sayles in engaging with issuers on matters of environmental, governance and social practices.  Further, the ESG Committee sets goals for the firm's engagement activities, evaluates additional ESG tools available from third parties, considers membership or signatory opportunities with respect to ESG-related groups (such as the TCFD and other initiatives such as Climate Action 100+), plans and delivers internal training, identifies external training opportunities, prepares public statements on ESG activities at Loomis Sayles and other communications (including in response to specific client requests), prepares the UN PRI assessment, and addresses other ESG-related matters.  In addition, our Chief Investment Risk Officer's semiannual reviews ensure that investment teams are aware and appropriately considering the responsible investment objectives set by the firm.


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

          Completed initial training on ESG incorporation to investment professionals.  Increased dialogue on ESG integration as a result of the training.
        

Progress achieved

Our initial round of formal training to investment professionals was completed in 2018: "ESG integration education".  Follow-up education that was prompted by the original sessions was provided on a small-group and one-on-one basis.  A result of the training has been increased awareness, dialogue and implementation of such things as measurement tools (e.g., carbon footprint analysis).  Subsequent discussions have also led to an assessment of additional service providers and more focused ESG incorporation by the investment professionals.

Key performance indicator

          Delivery of training on ESG engagement to investment professionals.  Increased dialogue on ESG engagement as a result of the training. Enhancement to our engagement database.
        

Progress achieved

Company specific engagement:  We developed a simple engagement database three years ago, to increase awareness and track engagement with issuers.  For each meeting/call with issuers, we requested investment professionals to document in the database whether they discussed E, S, or G.  We have enhanced the database so that analysts can now enter more detailed engagement commentary, and track their engagement and outcomes over time.  Follow-up education that was prompted by the original sessions was provided on a small-group and one-on-one basis.  The resulting dialogues led to a greater understanding of the interactions necessary to influence issuers' behavior in furtherance of improved ESG practices.  It is also a database that is accessible across the firm, which could improve communication of ESG activities across the company.

 

Key performance indicator

          ESG educational meetings; formal email firm-wide distribution; investment team quarterly; hired a consultant and assessed vendor methodology presentations
        

Progress achieved

ESG educational meetings for investment professionals included:

  • Populating the ESG engagement database, including providing examples of engagement activites, such as discussions with management about E, S or G issues
  • External data vendor methodology training
  • Discussions between portfolio managers and central fixed income research analysts about the value and interest from clients
  • Introduction of the SASB materiality map
  • Summaries of various industry conferences attended (PRI, Deutsche Bank, etc)

Formal firm-wide distribution:

  • Creation of an ESG email distribution list, to share ESG internal and external information across the firm
  • Delivery of written educational materials, policy statements and examples of ESG resources available to the investment professionals

External ESG data and research vendors:

  • Hired a consultant to summarize the data vendor landscape, and help us to prioritize the external vendors we would like to integrate into our systems
  • Shared the results of the vendor assessments with the firm
  • Held many MSCI meetings with individual investment teams (to help communicate and discuss ways that the individual teams might use MSCI for example)

 

 

Key performance indicator

          Encouraged enhanced documentation in the engagement database; enhanced proxy policy to incorporate additional ESG language
        

Progress achieved

One of our primary goals in our ESG initiatives is to ensure that the investment professionals are incorporating ESG issues through authentic integration and engagement. As fundamental investors, with a strong history of meeting with issuers on both the fixed income and equity product teams, we have always engaged with management teams on the issues that we believe are material.  Those issues include ESG factors as well.  We have given our investment professionals the additional data and resources that we now have available in this rapidly growing ESG area, and to label the engagement issues as E, S or G where relevant. 

Within our investment teams, we see an improved understanding of the ESG risks and opportunities, and increasing examples of changes made by management over time as well.  

Key performance indicator

          Increase in number of product team examples of ESG incorporation into their investment processes.
        

Progress achieved

As a signatory to the UN PRI, we believe it is our responsibility to ensure that our investment professionals have the data, research, and resources necessary to meet their clients' performance objectives.  Each investment team is responsible for determining how ESG factors and metrics are incorporated within their own investment processes.  One of the roles of the ESG Committee is to help each investment team assess where within their investment process the ESG analysis is integrated:  Fundamental analysis, valuation analysis, portfolio construction, risk management, etc.

Over the last year, our ESG Committee met with investment professionals from almost every team on a quarterly basis.  We helped them to enhance their investment policy documents where appropriate.  We now have the data integrated into both our ESG Center and Factset, and have provided the portfolio managers with a more efficient way to incorporate ESG factors into their decision making process.  In addition, our Chief Investment Risk Officer incorporates ESG factors within his semi-annual portfolio reviews with each team, to understand (among other things) how the portfolio managers are using ESG in their investment decision making processes.

 

 

Financial performance of investments

Key performance indicator

          Semiannual in-person discussion of ESG factor performance of portfolios with portfolio management teams.
        

Progress achieved

The Chief Investment Risk Officer conducts semiannual Investment Risk Reviews with each portfolio management team at the firm.  Included in these Risk Review meetings are the CIO, deputy CIO and director of business development.  The purpose of the semiannual meetings is to evaluate investment processes, performance and risk attribution.  ESG factors are an important part of that assessment and have been included within the review for the last 3 years.  We have developed a proprietary risk assessment portfolio management tool, called our ESG Center.  We continue to enhance our ESG integration efforts by evaluating third party resources and incorporating external data into our factor attribution tools. We are currently integrating the SASB materiality map framework into our systems. We expect that this will help us further focus our analysis and our engagement topics with management teams.

ESG characteristics of investments

Key performance indicator

          Creation of ESG Center and related reports
        

Progress achieved

The ESG Center has been introduced to all investment professionals, and allows the portfolio managers to understand their exposure to ESG factors on both and absolute basis and relative to their benchmarks. 

Other description (1)

          Assessment of themes and exposures within portfolios and across the firm
        

Key performance indicator

          ESG themes in portfolios vs benchmarks
        

Progress achieved

We have begun to assess the key material ESG themes in all of our client portfolios as well as the benchmarks that we manage to.

Our goal is to understand the thematic exposures within our investment universe on both an absolute and relative basis, so that we may prioritize our engagement with issuers based on these thematic exposures.

Other activities

Key performance indicator

          Collaboration with other RI groups/initiatives
        

Progress achieved

We continue to assess the many RI initiatives and organizations that are available for asset managers.  In addition to the UN PRI, the UK Stewardship Code, the LGPS Code of Transparency:

  • Our COO led an ESG project with the Association of Institutional Investors.  The goal is to gather asset managers, financial services companies (accounting firms, exchanges, regulators, gatekeepers, etc) to discuss the possible standardization of specific language across the industry.  We are working with peers/competitors to help drive this initiative forward.
  • Our Director of ESG spoke at a number of conferences last year (London Professional Trustees - Senate; EII UK & Ireland Summit;  we also spoke at a university in Boston to discuss ESG and the tie to investment performance.)
  • We also sponsored the CFA Boston Society ESG Conference in the fall.

Key performance indicator

          Meetings with other ESG investment professionals, consultants, and industry participants
        

Progress achieved

We have noticed that the discussion of initiatives in ESG and RI are frequent and welcome across peers and competitors.  We have had many interesting and productive discussions about the ESG work that we are doing with others, and we always encourage them to join the initiatives that we know about and they do the same.  We've been pleased with the collegiality of the competitors in this space as we all learn more.

Key performance indicator

          Case studies for individual securities and product teams
        

Progress achieved

Over the last year, our investment professionals have increasingly begun to document their ESG examples of both ESG integration and engagement.  Now that we have three years of data in our engagement database, we are working to enhance the database to include more substantive examples.  We appreciated the case studies that the PRI shared on the website as best practice - it's interesting and helpful to see what others are doing.  Many of our best practice case studies have been developed for RFPs or client marketing materials, and our hope is to continue to enhance and simpify the gathering of these best practice examples using technology.

Key performance indicator

          Creating a library of ESG incorporation examples to illustrate -- across strategies and ESG topics -- ESG incorporation at Loomis Sayles
        

Progress achieved

The ESG Committee has worked with multiple portfolio management teams to elicit and document ESG integration themes in research, portfolio construction and engagement activities.

06.2. Additional information.


Top