Being a responsible investor is part of the ammunition that trustees can use to improve the returns they achieve on the assets under their control. Responsible investing includes adopting policies on:
- Corporate governance including voting and engagement
- Long term sustainability
- Ethical, environmental and social impact of investee companies
- The Enhanced Analysis Initiative which encourages research into the non-financial factors affecting companies.
How is Hymans Robertson supporting these policies?
These policies refer to actions of direct stock holders and therefore apply more readily to end investors (e.g. pension schemes) and the investment houses that manage their assets. Our role, as consultants, is to assist clients to implement policies which are appropriate to their circumstances. Some examples are as follows:-
- We have developed an ESG screen within our manager research database which allows us to screen managers according to their ESG credentials. This can also be used as one of a number of screens which clients may include when selecting an investment manager.
- We completed a survey of investment managers’ capabilities in the area of ESG in order to inform our clients of the strengths and weaknesses of their managers in this increasingly important area.
- We have introduced our clients to the UN Principles for Responsible Investment and have worked with several of them to examine how they can better fulfil their ESG responsibilities by signing up to the Principles. We have seen particular interest from our public sector clients. A number of our private sectors clients have also expressed an interest.
- We are supportive of the FRC UK Stewardship Code and the principles behind it.
- We have worked with a number of our clients to examine the use of active engagement overlay services, incorporating our review of providers offering stand-alone active ownership services. (See Active ownership 60 Second Summary)
How can we help you?
Specific areas where we can provide help and support include:-
- Training and education on ESG issues
- Developing a long term plan to deal with ESG issues for your scheme
- A review of governance overlay providers
- Communication to your scheme members
- Developing a plan to implement UNPRI
Other background information
In the past, many schemes have relied on their investment managers to fulfil the active ownership role. Most managers have in place a policy which outlines how they will vote in a range of circumstances. However, in Hymans Robertson’s 2007 survey of investment managers and their ESG credentials, few were able to demonstrate significant commitment in terms of time and resources in this area. Our Investment Technical Group is responsible for continually exploring ways of further developing our thoughts and future actions in this area.