ESG and Sustainability at Schroders - Marketing material for professional investors or advisors only
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ESG and Sustainability at Schroders Marketing material for professional investors or advisors only
“Issues such as climate
change, resource scarcity,
population growth and
corporate failure have put
responsible investment at
the forefront of investors’
minds. Companies with a
strong environmental, social
and governance ethos will
tend to deliver better results
for our clients.”
– Peter Harrison,
Group Chief Executive,
Schroders plc
2 Sustainability
Sustainability at Schroders
Our experience and expertise
with
20 22 210 1,750
years+ Dedicated years+ Engagements
ESG integration ESG in 2019
Combined
specialists investment
experience
with Across
5,800+ 57 10
Company meetings Countries Proprietary
voted on globally investment tools
and frameworks
A+ 9,000+
UN PRI annual Companies covered
assessment1 by our portfolio-level
sustainability reporting
tools
1st 100%
Asset manager Renewable energy
to tie their cost by 2025 and carbon
of capital to neutral from 2020
sustainability
goals
Source: Schroders, April 2020, unless otherwise stated. 1 As of December 31,
2018. 2PRI, 2015, 2016, 2017, 2018 and 2019 Assessment Reports.
Sustainability 3
Uncovering and investing in companies that innovate,
and address imbalances in our world
The Schroders Global Transformation range
Schroder ISF* are a suite of funds that gives investors long-term exposure to the
most powerful and persistent themes transforming our planet and lives.
Schroder ISF Schroder ISF
Global Global Climate
Disruption Schroder ISF Change Equity
Global Cities
Real Estate
Schroder ISF
Global Energy
Transition
*Schroder International Selection Fund is referred to as Schroder ISF throughout. Schroders ISF are not available to US domiciled Investors.
4 Sustainability
Schroder ISF
Smart Manufacturing
Schroder ISF Schroder ISF
Healthcare Changing
Innovation Lifestyles
Schroder ISF
Global Sustainable
Growth
Sustainability 5
Sustainable investing is not new, so why now? No longer a box-ticking exercise Companies and countries are coming under growing pressure from regulators and society to consider their impacts on challenges like climate change, pollution, obesity, and many other risks. As these social tensions become more acute, it becomes more likely that these external social and environmental factors will become tangible financial costs for companies. Sustainability therefore incorporates qualitative and quantitative measures to identify companies with sustainable business models that support long-term share and bond holder value. Narrow interpretations (such as “green” or “ethical” investing) often lead to “screening”, whereby stocks are included (positive screening) or ruled out (negative screening), often on a single concern. While we do see a place for focusing on particular investments, or for excluding the most egregious offenders, we believe that an “integrated” approach to investing is more appropriate for long-term investments. 6 Sustainability
Our overarching approach
to sustainable investing
1
Integration
We seek to integrate ESG factors into our
research and investment decisions across asset
classes. We have a team of 21 dedicated ESG
specialists with over 200 years of combined
investment experience. Schroders aims to have
ESG integrated in all investment desks by the
end of 2020.
2
Engagement &
active ownership
Unlocking long-term value for our client by
actively engaging with companies on material
ESG issues to enhance our analysis or to seek
improvements in performance. We assess
resolutions and apply our voting policy and
guidelines as outlined in our ESG policy.
3
Measurement
We develop proprietary tools to help translate
structural trends into actionable investment
implications and quantify impacts via
reporting. We now have over 10 proprietary
tools and a dashboard for our analysts and
portfolio managers. Over 9,000 companies are
covered by our portfolio-level sustainability
reporting tools.
Sustainability 7
SustainEx
Balancing empirical evidence and analyst insight
What does SustainEx enable us to do?
This ESG tool:
provides us with detailed analysis of a company’s and
portfolio’s net impact on society Much more
helps analysts gauge companies’ credit or deficit
than a
with society and the financial risks they face as social blunt score
externalities crystallize into financial costs or benefits.
Solutions: SustainEx vision
Translating social impacts into financial costs
Companies generate impacts on society
Regulation is increasingly making companies pay for those impacts
A proprietary tool built on…
Over 400
externalities...
academic and industry studies of social impacts and
8 SustainabilityWe mapped a wide
range of possible
impacts
(positive and
negative)
SustainEx quantifies impacts in dollar terms…
…identifying sources of risk to company profitability
Source: Schroders, July 2020.
...Over 70 data points for each company, estimated where not disclosed
Over 9,000 global companies examined
Sustainability 9Case Study
Vestas – Renewables achieving lowest cost form of power
Customers Employees
Company has history Strong customer Employee incentives 1/3 of the board are
of passing efficiency satisfaction survey well aligned with employee representatives
improvements to results with 83% of the company KPIs
customers resulting in customers regarding Steady improvement
steadily declining cost Vestas as a preferred Focus on employee in injury rates
of energy supplier safety as a top priority
Environment Shareholders
Technology leadership in Turbines are carbon Very strong NWC management helping
wind power neutral within 5-12 management of net to drive cash flow conversion
months of operation working capital in excess of 100%
Delivering clean energy
at compelling cost Deliver 30-50x more Growing services Services business
energy than consumed business providing helping drive higher margins
over lifetime greater stability
10 SustainabilityExpected average levelized US energy costs in 2020
$/Mwh
250
206
200
150
100 82
74 74
48
50 35
0
Nuclear Coal Gas Offshore Wind Solar Onshore Wind
Source: Schroders, Citi Utilities Research, October 2017. The forecasts should be regarded as illustrative of trends. Actual figures will differ from forecasts. Please see
Important Information regarding forecasts The stocks shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
Sustainability 11Schroder Investment Management North America Inc.
7 Bryant Park, New York, NY 10018-3706
(212) 641-3800
schroders.com/americas
@SchrodersUS
Important Information
The views and opinions contained herein are those of Schroders Sustainability Team as at the date of publication and are subject to change due to market and other
conditions. Such views and opinions may not necessarily represent those expressed or reflected in other Schroders communications, strategies or funds. This document is intended
to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or security or to adopt any investment
strategy. The information provided is not intended to constitute investment advice, an investment recommendation or investment research and does not take into account
specific circumstances of any recipient. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Information herein is believed to
be reliable but Schroders does not represent or warrant its completeness or accuracy. No responsibility or liability is accepted by Schroders, its officers, employees or agents for
errors of fact or opinion or for any loss arising from use of all or any part of the information in this document. No reliance should be placed on the views and information in the
document when taking individual investment and/or strategic decisions. Schroders has no obligation to notify any recipient should any information contained herein changes or
subsequently becomes inaccurate. Unless otherwise authorized by Schroders, any reproduction of all or part of the information in this document is prohibited. Any data contained
in this document has been obtained from sources we consider to be reliable. Schroders has not independently verified or validated such data and it should be independently verified
before further publication or use. Schroders does not represent or warrant the accuracy or completeness of any such data. All investing involves risk including the possible loss of
principal.
Main Risks:
Ȃ Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors
may not get back the amounts originally invested.
Ȃ Equity prices fluctuate daily, based on many factors including general, economic, industry or company news.
Ȃ Investments in smaller companies can be less liquid than investments in larger companies and price swings may therefore be greater than in larger company funds.
Ȃ In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend
redemptions of its shares.
Ȃ Changes in foreign exchange rates could create losses.
Ȃ Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty and operational risk.
Ȃ Failures at service providers could lead to disruptions of fund operations or losses.
Issued by Schroder Investment Management Limited and Schroder Investment Management North America Inc, in accordance with the following local jurisdictions: Argentina: “It is
expressly stated that the information provided in this document is not intended for distribution to the public in general as the foreign assets herein mentioned are not authorized
for distribution through public offering in the Argentine Republic. The sole purpose of this document is to provide information to those agents authorized by the National Securities
Commission on certain foreign financial products that may be offered to their private clients in accordance with their licenses and the regulations in force.” Brazil: “The Fund and
the distribution of its shares are not registered at the Brazilian Securities and Exchange Commission (CVM), and therefore do not meet certain requirements and procedures usually
observed in public offerings of securities registered with the CVM, with which investors in Brazilian capital markets may be familiar. For this reason, the access of the investors to
certain information regarding the Fund may be restricted.” Chile: “This is not a public offering of securities. These instruments have not been registered with the Financial Market
Commission of Chile.” Colombia: “This document does not constitute a public offer in the Republic of Colombia. The offer of the fund is addressed to less than one hundred
specifically identified investors. The fund may not be promoted or marketed in Colombia or to Colombian residents, unless such promotion and marketing is made in compliance
with Decree 2555 of 2010 and other applicable rules and regulations related to the promotion of foreign funds in Colombia.” Costa Rica: “This Document has been produced for
the purpose of providing information about the Shares and will be provided to a maximum of 50 investors per fund in Costa Rica who are Institutional or Sophisticated Investors
in accordance with the exemptions established in the Regulations on Public Offers of Values. This Document is made available on the condition that it is for the use only by the
recipient and may not be passed onto any other person or be reproduced in any part. The Shares have not been and will not be offered in the course of a public offering or of
equivalent marketing in Costa Rica. The Shares are the product of a private offer, in accordance with the exceptions established in the Regulation on Public Offer of Securities. No
collective communication media has been used. The holder acknowledges and accepts the legal and tax regimes that apply to the private offer of securities.” Mexico: “The securities
have not been and will not be registered with the National Registry of Securities, maintained by the Mexican National Banking Commission and, as a result, may not be offered
or sold publicly in Mexico. The fund and any underwriter or purchaser may offer and sell the securities in Mexico, to Institutional and Accredited Investors, on a private placement
basis, pursuant to Article 8 of the Mexican Securities Market Law.” Panama: “This Private Investment Fund is not registered nor is it subject to the supervision of the Securities
Superintendence of Panama.” Perú: “The Shares have not been registered before the Superintendencia del Mercado de Valores (SMV) and are being placed by means of a private
offer. SMV has not reviewed the information provided to the investor. This document is not for public offering.” Uruguay: “The sale of the shares qualifies as a private placement
pursuant to section 2 of Uruguayan law 18,627. The shares must not be offered or sold to the public in Uruguay, except in circumstances which do not constitute a public offering or
distribution under Uruguayan laws and regulations. The shares are not and will not be registered with the Financial Services Superintendency of the Central Bank of Uruguay. The
shares correspond to investment funds that are not investment funds regulated by Uruguayan law 16,774 dated September 27, 1996, as amended.” Venezuela: “The securities may
not be offered or sold in the Bolivarian Republic of Venezuela, except in circumstances which do not constitute a public offering of securities under Venezuelan securities laws and
regulations. The securities have not and will not be registered with the Venezuelan National Securities Superintendence. This document is not for public distribution.”
US-LATAM-SUSTAINLATAM
Important Information
This document is designed for professional advisers and/or Institutional Investors only. We define “Institutional Investors” as Institutions with the appropriate expertise and
knowledge e.g. Asset Managers, Distributors and Financial Intermediaries. This material is not suitable for retail clients.
This document is for information purposes only and does not constitute an offer or an invitation to induce an offer by any person to acquire, purchase or subscribe for securities,
nor an offer for the entering into any other contractual relationship. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or
investment recommendations.
Schroders only provides information about its products and services and does not offer investment advice based on individual circumstances. If you have any doubts about the
suitability of an investment, you should seek independent advice.
Schroders does not accept any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report may not be reproduced,
distributed, or published by any recipient for any purpose.
Schroders has expressed its own views and opinions in this document and these may change. The data contained in this document has been sourced by Schroders and should be
independently verified before further publication or use. This presentation is intended to be for information purposes only and it is not intended as promotional material in any
respect.
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may
not get back the amount originally invested. The forecasts included in this presentation should not be relied upon, are not guaranteed and are provided only as at the date of issue.
Our forecasts are based on our own assumptions which may change. We accept no responsibility for any errors of fact or opinion and assume no obligation to provide you with any
changes to our assumptions or forecasts. Forecasts and assumptions may be affected by external economic or other factors.
Brazil
Informações importantes. Este material não constitui uma oferta, solicitação ou recomendação para a compra ou venda de qualquer instrumento financeiro nem para a adoção
de qualquer estratégia de investimento. As informações contidas neste documento são consideradas confiáveis, mas não garantimos a integralidade ou exatidão das mesmas. Os
dados foram obtidos pela Schroders e são consentidos sem qualquer tipo de garantia. Deverão ser verificados por uma entidade independente antes de qualquer publicação ou
utilização posterior. Os dados de terceiros são propriedade ou licenciados pelo fornecedor dos dados e não podem ser reproduzidos, extraídos ou utilizados para quaisquer outros
fins sem a autorização do fornecedor dos dados. Nem a Schroders nem o fornecedor dos dados podem ser responsabilizados por algo relacionado com os dados de terceiros. O
material não se destina a prestar nem deverá servir de base a aconselhamento contábil, jurídico ou fiscal. Nenhum dos pontos de vista ou informações contidas neste material deve
servir de base a decisões individuais e/ou estratégias de investimento. Não aceitamos qualquer responsabilidade por erro ou opinião. Quaisquer referências a valores mobiliários,
setores, regiões e/ou países têm fins meramente ilustrativos. No presente documento, a Schroders expressou os seus pontos de vista e opiniões e estes poderão mudar. O valor
dos investimentos e o rendimento proveniente destes podem aumentar ou diminuir e os investidores podem não conseguir recuperar a quantia originalmente investida. As taxas
de câmbio podem desvalorizar ou valorizar os investimentos no exterior. Se estiver na América do Norte, o presente conteúdo é emitido pela Schroder Investment Management
North America Inc., uma subsidiária indiretamente detida pela Schroders plc e consultora registada na SEC, que fornece gestão de ativos de produtos e serviços a clientes nos EUA
e no Canadá. Para leitores no Brasil, este conteúdo é emitido pela Schroder Investment Management Brasil Ltda., CNPJ: 92.886.662/0001-29. Gestor de Recursos autorizado pela
Comissão de Valores Mobiliários (“CVM”) de acordo com o Ato declaratório nr. 6816. A Schroder Investment Management Brasil Ltda. não realiza a distribuição de cotas de Fundos
de Investimento. Para os demais leitores, este conteúdo é emitido pela Schroder Investment Management Limited, 1 London Wall Place, London, EC2M 5AU. Número de registo
1893220 Inglaterra. Autorizada e regulada pela Financial Conduct Authority.
Chile Esta oferta no constituye una oferta pública y versa sobre valores no inscriptos en el registro de la Comisión para el Mercado Financiero de Chile.
Colombia La información contenida en este documento no constituye una oferta pública de valores en la República de Colombia. La oferta de las acciones de los fondos
se dirige a menos de cien inversores específicamente identificados. Las acciones de los fondos no pueden promoverse o comercializarse en Colombia o entre
residentes colombianos, a menos que la promoción o comercialización se lleve a efecto al amparo del Decreto 2555 de 2010 y de otras normas y reglamentos
aplicables que regulan la promoción de los productos y servicios financieros extranjeros y/o relacionados con valores en Colombia.
Costa Rica Este documento ha sido elaborado con el propósito de proporcionar información sobre los valores y será proporcionado a un máximo de 50 inversores por fondo en
Costa Rica, que sean inversores institucionales o sofisticados, de conformidad con las excepciones establecidas en el Reglamento de Oferta Pública de Valores. Este
documento será para el uso exclusivo del destinatario y no puede ser distribuido ni reproducido en cualquier parte. Las acciones no han sido ni serán ofrecidas en el
curso de una oferta pública o de comercialización equivalente en Costa Rica.
Las acciones son el producto de una oferta privada, de conformidad con las excepciones establecidas en el Reglamento de Oferta Pública de Valores. No se han
utilizado medios de comunicación masiva. El titular conoce y acepta el régimen legal e impositivo que aplica para los valores de oferta privada.
Panama Las acciones de los fondos no han sido ni serán registradas ante la Superintendencia del Mercado de Valores de Panamá.
Perú Las acciones de los fondos no han sido registradas ante la Superintendencia del Mercado de Valores peruana y su venta sólo estará permitida en el marco de una
colocación privada. La Superintendencia del Mercado de Valores peruana no ha examinado la información proporcionada al inversor. Esta información es sólo para
uso exclusivo de Inversores Institucionales en Perú y no podrá ser públicamente distribuida.
Uruguay La venta de las acciones de los fondos cumple los requisitos aplicables a una colocación privada de conformidad con el artículo 2 de la Ley nº 18.627 de Uruguay.
Las acciones de los fondos no podrán ofrecerse ni venderse entre el público en Uruguay y su venta sólo estará permitida en el marco de una colocación privada
realizada de acuerdo a la legislación uruguaya. Las acciones de los fondos no han sido ni serán registradas ante la Superintendencia de Servicios Financieros del
Banco Central de Uruguay. Las acciones de los fondos corresponden a fondos de inversión que no son fondos de inversión regulados por la Ley uruguaya nº 16.774
de 27 de septiembre de 1996, en su versión modificada.
Venezuela Los valores no pueden ser ofrecidos o vendidos en la República Bolivariana de Venezuela, excepto en circunstancias que no constituyen una oferta pública de
valores en virtud de las leyes y reglamentos de valores venezolanos. Los valores no han sido ni serán registrados en la Superintendencia Nacional de Valores de
Venezuela. Este documento no es para distribución pública.
Argentina Se declara expresamente que la información proporcionada en este documento no está destinada a la distribución al público en general ya que los activos
extranjeros aquí mencionados no están autorizados para su distribución a través de ofertas públicas en la República Argentina. Este documento es solo para fines
educativos y no está destinado a la distribución comercial.
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