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RESPONSIBLE INVESTMENT QUARTERLY Q1 2021
Responsible Investment Quarterly – Q1 2021
CONTENTS
01 Foreword................................................3
02 Portfolio manager’s viewpoint................7
03 Country head focus –
Switzerland..........................................11
04 Funding Europe’s green
infrastructure finance gap....................14
05 Biden’s strong commitment
on climate change...............................20
06 Climate change, net zero and
the employment myth..........................24
Stewardship in action
07 Voting Q1.............................................29
08 Engagement highlights.........................30
2
Responsible Investment Quarterly – Q1 2021
01 Foreword
pandemic is forcing governments investment. However, by some
around the world to develop policies estimates the world is currently on-
not just for stimulating the global trend to face a $15 trillion gap between
economy, but also to respond to the infrastructure investment needed
climate change and to tackle the social and the amount provided by 2040.1
inequalities that have once again The motivation to tackle this is clear.
been highlighted by the spread of the
virus. Many of these governments are As the World Economic Forum has
considering a tried-and-true method noted2 on the supply side, when the
to boost economies in the short term equivalent of 1% of GDP is invested
and provide wide societal benefits in in infrastructure, economic output
the long term, through infrastructure increases by about 0.4% in the same
Iain Richards
Head of Global Responsible
Investment Policy
As we have moved into 2021 and
look towards COP26, the 2021 United
Nations Climate Change Conference
in Glasgow in November, the degree
of focus around climate-related issues
and themes has only intensified.
This has equally been reflected in
aspects of our thematic research and
thinking. In this quarterly review you
will find insights from this work across
a range of topics.
Technologically innovative, sustainable
infrastructure can pave the way for an
inclusive post-Covid economic recovery. Glasgow will host the UN Climate Change conference in November
The economic fallout caused by the Source: iStock.
3
Responsible Investment Quarterly – Q1 2021
year and by 1.5% four years later. The world is changing and not just Exchange Commission (SEC), reflecting
Set against this context, in this issue of because of climate change. We are both the new political administration
Responsible Investment Quarterly we living through the Fourth Industrial and growing investor demand, is both
touch on Europe’s green infrastructure Revolution as well as dealing with the examining the need for better climate
plans and the related financing needs impacts of the Covid pandemic. and other environmental, social and
to provide an insight into a thematic How governments and companies governance (ESG) information,
aspect of our research intensity. respond to the change will have as well as including a greater focus on
We also touch on President Joe significant implications economically, these issues in its supervisory 2021
Biden’s $2.25 trillion “American Jobs competitively and for employment as examination priorities.
Plan” that, in some areas, goes beyond well. The scale of change involved
even his election campaign pledges. creates uncertainty and concern I hope this quarter’s report will help
for many. This was reflected in provide insight into the types of issues
We also look at a sector that press headlines during the quarter our thematic research covers.
isn’t traditionally associated with suggesting millions of jobs will be put
environmental responsibility: aviation. at risk from climate transition over the
It currently consumes around 8% next three decades. We disagree and
of all oil, but rather than looking at discuss some of the reasons why later
solutions that would require extensive in this report.
infrastructure reorganisation, perhaps
there is something more immediate As the progress of sustainable
that can be done. This gives an insight finance reforms has continued
into the breadth of our thinking around around delegated regulations and
ESG investing. technical standards in Europe,
a broader debate about international
There’s an interesting dynamic playing standards has been playing out.
out in Switzerland as well, a country The International Organization of
regularly associated with finance, if not Securities Commissions (IOSCO) has
sustainable finance. But keen to not been discussing the development
get left behind in a rapidly changing of an international framework for
sphere, it is quietly working on Source:
sustainability reporting for public 1 https://www.smartbrief.com/original/2021/01/
generating and implementing ways to issuers with the International Financial are-we-talking-about-infrastructure-right-way
manage money sustainably. We look at Reporting Standards Foundation
2 https://www.weforum.org/agenda/2020/04/
coronavirus-covid-19-sustainable-infrastructure-
some of the ways it is attempting this. (IFRS). In the US the Securities and investments-aid-recovery/
4
Responsible Investment Quarterly – Q1 2021
5
Responsible Investment Quarterly – Q1 2021 6
Responsible Investment Quarterly – Q1 2021
02 Portfolio manager’s viewpoint
consumed 8% of all oil,1 the equivalent to alternative fuels such as hydrogen,
of almost 7.5 million barrels a day.2 sustainable aviation fuels (SAF) or
In 2020, Covid-19 grounded most electricity. Electric planes may have
airlines leading to a 39% drop in a future in 25-30 years, but we don’t
fuel consumption,3 but the long-term yet have sufficient infrastructure to
appetite for air travel will likely still recharge electric vehicles on roads, or
grow – mobility is important. Without batteries with truly long ranges, so the
policy intervention, however, planes idea of electric planes remains some
will continue to use fossil fuels, and it way off. Hydrogen is an interesting
is estimated that by 2050 the sector prospect but, like electricity, requires
could consume over 14 million barrels a completely new infrastructure and
a day, more oil than China consumed technology to make it work, both with
in 2019 (Figure 1). the aircraft themselves and at airports.
Andrea Carzana Although there is a drive to invest
If the demand is to remain, it is surely in solutions such as hydrogen and
Portfolio Manager, better to look at changing how planes
Threadneedle Sustainable Outcomes electricity, for now the focus is on SAF.
are powered. This turns the spotlight
Pan-European Equity strategy
Figure 1: Aviation fuel demand and country oil demand
Million barrels per day
We are now less than a decade out
from the self-imposed deadline set by 2050 14.2 U.S. 20.5
many companies to become carbon
neutral by 2030. Similarly, the 2050
deadline set by many countries to 2040 10.7 China 13.7
achieve this is looming into view.
Big strides will need to be made in 2030 8.1 India 4.8
order to achieve these targets.
But how?
2020 4.5 Japan 3.8
One sector that consumes massive
amounts of natural resources, but in
our opinion boasts the opportunity 2019 7.3 Germany 2.5
for realistic change, is aviation.
Aviation fuel demand Total oil product demand 2019
Successfully reducing emissions
would be a big win. In 2019 the sector Source: BloombergNEF, 2020.
7
Responsible Investment Quarterly – Q1 2021
Straight in the tank In 2019, aviation fuel was a 300 million Mandates
tonne global market.6 The International
We believe a major differentiation Air Transport Association’s fuel forum SAFs remain expensive, but
between airlines and cars is the projects a 420 million tonne market by mandated blending could force the
massive amount of capital tied up in 2030,7 and the World Economic Forum issue into the mainstream by the
existing planes – these are assets predicts a rise to 510 million tonnes in mid-2020s. This means governments
that are viable for the next 20-30 years 2040.8 The European Union accounts forcing a certain proportion of SAF
and simply replacing them would be for around 20% of this total, and is fuel use by airlines. Some countries
prohibitively expensive. Alongside targeting 14% of this amount for use are already moving on this: Sweden is
this, the technology is too far out to with SAF, creating 11 million tonnes of mandating a minimum of 0.5% of SAF
make them run on different fuels, demand by 2030 in Europe alone.9 in 2021, and France 1% in 2022.12
so the need is for something that Holland is considering regulation
can go in the existing tank. SAF can. But it is not the size of the market which would see a 14% blend by
SAF is made from waste destined for alone that makes SAF an exciting 2030.13 In the EU, the ReFuelEU
landfill, such as used cooking oil and prospect. There is an increasing initiative is set to be announced in
discarded animal fat, blended with desire within the aviation industry for July 2021, and will likely have a target
existing fossil fuel. reform and regulation. First, firms that of blending levels of 2% in 2025 and
have traditionally been devoted to 5% in 2030,14 while President Biden
Although the SAF market is small and fossil fuels, such as oil refineries, are is being urged to introduce a pan-US
early-phase, we see opportunities for exploring SAFs – after all, they too have 1% mandate.15 Once mandates are
investors with a number of companies sustainability targets to hit. Second, introduced and begin to rise, and
getting a foothold, among them the pandemic has offered a glimpse of regulations improve, scalability will
Neste,4 the world’s largest producer a world with lower carbon emissions, lead to reduced costs and even greater
of renewable diesel and sustainable but also made us realise not enough adoption – a virtuous circle.
aviation fuel refined from waste and is being done, which has pushed
residues,5 and renewable solutions sustainability up airlines’ agendas. On top of government support,
firm UPM. Numerous airlines now say they are SAF requires end-consumer pressure to
aiming to reduce their emission to develop. Passengers and corporates,
under pressure from increasingly
Market size and penetration zero by 2050, and achieving carbon
ESG-aware investors, can engage with
neutrality by 2035 – as JetBlue’s CFO
In our view, sustainable aviation is said, they would rather be driving the airline companies to encourage them
the only way the aviation sector’s bus than be hit by it.10 Neste has to reduce their carbon footprint and will
emissions can be brought down in signed deals with a number of airlines accept temporary price hikes owing to
the medium term, providing a bridge during the pandemic to increase the the cost. A 2% blend for a three-hour
to technologies such as hydrogen and use of SAFs, including All Nippon flight is estimated to add US$2 to the
electric planes which are decades out. Airlines.11 But the game changer is price of a ticket.16
This creates a massive market. regulation.
8
Responsible Investment Quarterly – Q1 2021
Investor opportunities To use an aviation analogy, SAFs 5 https://www.neste.com/about-neste/who-we-are/
business#9507dabd
are taxiing on the runway, but with 6 IATA, 2021.
For us investors this is an exciting technology, the right political will, 7 IATA, 2021.
opportunity. We like to explore shareholder pressure and mandate 8 World Economic Forum, 2021.
9 Neste management presentation, February 2021.
themes that play into the UN development, they can take off. 10 Exane BNP Paribas, Global Airlines: Sustainable
Sustainable Development Goals Change, 13 May 2021.
(UN SDGs).17 The SAF market is directly 11 https://biofuels-news.com/news/neste-and-all-
nippon-airways-collaborate-on-first-supply-of-
linked to a number of these: sustainable-aviation-fuel-in-asia/
the Sustainable Transport element of 26 October 2020.
12 ISCC Global Sustainability Conference,
UN SDG 11, Make cities and human February 2021.
settlements inclusive, safe, resilient 13 https://www.ainonline.com/aviation-news/
business-aviation/2020-03-06/dutch-
and sustainable; the Sustainable government-targets-saf-blending-mandate-2023
Tourism element of UNSDG 12, 6 March 2020.
Source: 14 Exane BNP Paribas, Global Airlines: Sustainable
Ensure sustainable consumption and Change, 13 May 2021.
1 BP, Statistical review of world energy, June 2020.
production patterns; and UN SDG 13, 2 BloombergNEF, 2020. 15 https://www.reuters.com/article/us-usa-energy-
Take urgent action to combat climate 3 BloombergNEF, 2020. aviation-idUSKBN2AJ0LH, 19 February 2021.
4 The mention of specific companies should not be 16 Columbia Threadneedle analysis, 2021.
change and its impacts. taken as an endorsement. 17 https://sdgs.un.org/goals
9
Responsible Investment Quarterly – Q1 2021 10
Responsible Investment Quarterly – Q1 2021
03 Country head focus –
Switzerland
Along with the unspoiled Alps, Three steps for sustainability
finance is emblematic of Switzerland.
The country’s banks and asset Firstly, by the autumn of 2021 the State
managers, especially, are known for Secretariat for International Finance
exporting finance all over the world, must propose changes to legislation
counselling the world’s wealthy. In the for preventing “greenwashing”.
20th century fierce ingenuity made Secondly, the Federal Council
Switzerland known for its banking recommended that financial market
secrecy and hedge funds. Yet today its players publish methods and strategies
financiers and fintech entrepreneurs for taking account of climate and
are turning their minds to the environmental risks when managing
development of sustainable finance. clients’ assets. Finally, recognising the
need to transform the entire economy,
This is partly through necessity: there companies in all sectors must
Eva Maria Hintner is a rising bar of sustainable finance implement the recommendations of
Country Head Switzerland regulation with which to comply, both the Taskforce on Climate-related
in Switzerland and its export markets. Financial Disclosures.
But also, many private banking
and asset management clients are The momentum for sustainability
highly sophisticated investors and was gathering even before this
The country’s financiers philanthropists. For them, sustainable announcement. According to the
2020 Swiss Sustainable Investment
and fintech entrepreneurs investing in its various forms is a
Market Study, the value of sustainable
natural extension of existing activities.
are developing fresh ideas investments rose by almost two thirds
With finance representing around – 62% – in 2019 to CHF 1.2 trillion,
that are influencing the 10% of gross domestic product,1 equivalent to about a third of locally
global evolution of the Swiss government is encouraging managed assets.3 While 2020’s fund
sustainable finance local banks, asset managers and flows have yet to be announced, the
insurers to move quickly on this. It growth rate is likely to have accelerated
is keen for Swiss finance to remain if it has followed international trends,4
competitive, and to play a part in as rising awareness of environmental
helping the country achieve its stated and social issues is boosting inflows
goal of becoming carbon neutral by into sustainable investment funds all
2050. For that reason, Switzerland’s over the world.
Federal Council introduced a three-
pronged approach to making the Beyond banking and asset
country a leading centre for sustainable management, Switzerland is an
finance at the end of 2020.2 international insurance centre.
11Responsible Investment Quarterly – Q1 2021
Like its peers everywhere, its insurers (DIBs) in education and healthcare. Exporting ideas and influence
are under pressure to mitigate Its Quality Education India DIB,
environmental, social and governance launched in 2018, sets out to improve As the shift to sustainable finance
(ESG) risks, while also engaging the quality of learning and literacy in rapidly accelerates, so Swiss ingenuity
with the companies they invest in to India, and in its first year reported is contributing new ideas, some of
improve their actions if needed. achieving a 30% improvement in which may be copied elsewhere.
The country’s best-known insurers, participating schools in the states It may not be the best-known country
Zurich and Swiss Re, were ranked first of Delhi and Gujarat.9 for sustainable finance, but its financial
and fifth respectively, in the insurance/ institutions and fintechs are quietly
reinsurance sector of the Dow Jones Another field of innovation is pioneering ways to manage money
Sustainability Indices.5 What’s more, Switzerland’s green fintech companies, sustainably. Meanwhile, its insurers
almost nine in 10 (86%) of Swiss which are growing quickly from small also appear to be ahead of their peers.
insurance companies include ESG beginnings.10 They are operating
across fields ranging from providing As has always been the case, the
criteria when making investment
green financial products and analysing country’s financiers are exporting
decisions, according to the 2019
ESG data, to providing insurance their ideas, exerting influence
Sustainability Report of the Swiss
solutions related to climate change. beyond its mountains that symbolise
Insurance Association.6
environmental purity.
That said, the country cannot claim One tangible example is Yova,11
to be at the forefront of all areas of which offers investments through a
sustainable finance. For instance, the digital platform that aims to combine
SIX Swiss Exchange only lists about sustainability with attractive returns.
40 sustainable bonds, with just half Its CEO, Tillmann Lang, is quoted on
of them primary listings.7 the Finance Swiss website saying: Source:
“People buy organic food, eco-friendly 1 https://www.coface.com/Economic-Studies-and-
Country-Risks/Switzerland
clothing, green power, switch from 2 https://www.admin.ch/gov/en/start/
From social finance to fintech planes to rail… They also want to documentation/media-releases.msg-id-81571.
html, 11 December 2020.
But while the country might not be invest sustainably. There aren’t so 3 https://www.sustainablefinance.ch/en/swiss-
a juggernaut of sustainable finance, many good financial solutions out there sustainable-investment-market-study-2020-_
content---1--3037--35722.html, 8 June 2020.
some of its nimbler organisations are for those who want their investments to 4 https://www.reuters.com/business/sustainable-
proving just as innovative as they were make a clear difference. Yova was set business/sustainable-fund-inflows-hit-record-high-
up to provide sustainable investment q1-morningstar-2021-04-30/, 30 April 2021.
in boosting their competitiveness in 5 https://finance.swiss/en/sustainable-finance/
previous eras. For instance, UBS took solutions for normal people.”12 6 SIA 2019 Sustainability Report, 5 June 2020.
7 https://www.six-group.com/dam/download/the-
the step in 2020 of declaring that swiss-stock-exchange/listing/bonds/sustainable-
Quite a few green fintechs collect
sustainable investments would bonds-SIX.pdf, 2021.
and analyse ESG data. For instance, 8 https://www.ubs.com/global/en/media/display-
be the default solution for private
RepRisk is a pioneer in the application page-ndp/en-20200910-gwm-si.html,
clients investing globally, becoming 10 September 2020.
of machine learning to ESG data. 9 https://www.ubs.com/global/en/media/display-
the first major global financial
Further evidence of the progress of page-ndp/en-20200910-gwm-si.html,
institution to do so.8 10 September 2020.
Switzerland’s fintechs in 2020 can be
10 https://finance.swiss/en/news-and-events/green-
Further, the bank’s UBS Optimus seen in the Swiss Fintech Innovation fintech-takes-off-as-the-financial-sector-embraces-
Lab joining forces with Stanford sustainability/, 7 December 2020.
Foundation is innovative in the field 11 Mention of specific companies should not be
of social finance, where philanthropy University to form the Global Centre taken as a recommendation to buy.
for Sustainable Digital Finance. 12 https://finance.swiss/en/news-and-events/green-
and sustainable investing converge, fintech-takes-off-as-the-financial-sector-embraces-
pioneering Development Impact Bonds sustainability/, 7 December 2020.
12Responsible Investment Quarterly – Q1 2021
13Responsible Investment Quarterly – Q1 2021
04 Funding Europe’s green
infrastructure finance gap
Benjamin Kelly Ingrid Edmund
Senior Analyst, Global Research Senior Portfolio Manager
Transformational plans for energy, Figure 1: Google Analytics returns for ESG phrases
mobility and buildings require huge
120
amounts of private sector finance,
inevitably opening up a new field of
100
attractive investment opportunities.
Responsible Investment has 80
witnessed strong growth over the
past five years. However, the past six 60
months have seen it embark on a
much steeper trajectory. If we take a
40
Google Analytics view on worldwide
searches for “ESG” (environmental,
20
social and governance) phrases,
it peaked in March 2021 (Figure 1).
This growth is also evident within 0
May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21
corporate transcripts with respect to
the growing usage of ESG themes Source: Google Analytics, May 2021. Numbers represent search interest relative to the highest point on the chart for the given
region and time. A value of 100 is peak popularity. A value of 50 means the term is half as popular. A zero means there was
(Figure 2). insufficient data for this item.
Decarbonisation and EVs continue to be areas of focus Biodiversity
Mentions of ESG Themes in event transcripts
14 Biofuel
3,500
Carbon Capture100
80
Responsible Investment Quarterly – Q1 2021
60
40
20
0
May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21
Figure 2: key RI themes increasingly mentioned in company transcripts
Decarbonisation and EVs continue to be areas of focus Biodiversity There has been growing interest in net zero, carbon
Mentions of ESG Themes in event transcripts capture and carbon offsetting versus 4Q20
Biofuel
3,500 YoY change QoQ Change
Carbon Capture
Biodiversity 29% 33%
Carbon Offset Biofuel 22% -1%
3,000
Circular Economy Carbon Capture 194% 67%
2,500 Decarbonization Carbon Offset 134% 72%
Circular Economy 60% 4%
Digital Tax
2,000 Decarbonisation 81% 49%
Net Zero Digital Tax 56% 39%
1,500 Electric Vehicles Electric Vehicles 99% 51%
Employee Satisfaction Employee Satisfaction 33% 31%
ESG 34% 25%
1,000 EU Taxonomy
EU Taxonomy 525% 39%
Furlough Furlough 327% -29%
500
Green Deal Green Deal 46% 19%
Hydrogen Hydrogen 258% 34%
0
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Net Zero 352% 107%
Renewables 16% 7%
Source: Alphasense and Morgan Stanley, as at April 2021.
One of the enablers of this stellar This will not be achieved through new activity, with this positive multiplier
60
growth has been strong policy support, projects alone, developing existing effect persisting for at least four years
particularly in Europe. The build out brownfield projects will be key to and the impact on economic activity
of green infrastructure here is nothing supporting sustainable investment. being two to seven times larger than
Losses
if not ambitious. The European Union those associated with environmentally
40 among the first to commit to
was For investors, Europe’s gargantuan detrimental measures.
Growth
appetite for green infrastructure
Million jobs
carbon neutrality – by 20501 – and has
gone furthest in publishing investment investment will inevitably lead to
plans to enable a green transition. significant investment opportunities. Policies driving
20
Some observers estimate that up to The Green Deal’s targets imply an transformation
€7 trillion in infrastructure spending investment gap of around €470 billion
a year through to 2030.4 This will not As Europe gears up to stimulate
will be required over the next 30 years economic recovery from Covid-19,
to achieve the EU’s stated goals, be bridged without major injections
of private capital alongside state so its plans for green infrastructure
of 0which around €3 trillion will come investment have increased. Joining
2019
from private sources.2Bioenergy spending and incentives,2030creating huge,
Electricity Coal
multi-year Oil and Gas
investment opportunities. forces with the Green Deal, the EU
But while 2050 may seem a distant Recovery Plan gives climate transition
prospect, the EU does not plan to start Aside from environmental benefits, a central role in the continent’s
its transformation slowly. The Green green infrastructure investment can blueprint for economic recovery and
Deal, which is the cornerstone of the also accrue economic advantages growth, aiming to create the jobs of
continent’s transition to a low-carbon through the stimulation of economic the future as well as positive climate
future, aims to deliver a reduction of activity – a recent IMF5 paper and sustainability impacts, including
50%-55% in carbon emissions by concluded that every dollar spent on reduced emissions, greater energy
2030 compared with 1990 levels.3 carbon-neutral activities generates self-sufficiency and lower bills.
more than a dollar of economic
15Responsible Investment Quarterly – Q1 2021
To support its Green Deal agenda, Four major investment 2. Green mobility
the EU originally intended to mobilise
at least €1 trillion of public and private themes The transition to electric power for
transport is a central element of the
investment by 2030, but the stimulus Focusing specifically on European Green Deal, which stipulates that by
package drawn up to address the infrastructure, the four most notable 2030 at least 30 million zero-emission
economic impact of Covid-19 has investment themes are all central cars will be in use on Europe’s
boosted this. The EU Recovery Plan’s elements of the Green Deal agenda. roads,11 high-speed rail travel will
additional stimulus for the period
1. Renewable energy double across Europe and all
2021-27 is expected to total around
scheduled mass transport for
€1.85 trillion, roughly a quarter of The plan calls for a doubling of journeys of less than 500km should
which could be allocated to climate electricity generation from renewable be carbon-neutral.12 For some
transition-related investments.6 sources by 2030 to help meet its companies, these targets present
Additionally, a €17.5 billion Just emissions reduction targets. This immediate opportunities to generate
Transition Fund has been agreed as implies a major increase in European attractive returns. Rail equipment
part of the Green Deal to mitigate the utility companies’ current rates of makers are well positioned to benefit
economic and employment impacts of investment in renewable capacity and from the Green Deal, although an
Europe’s climate transition.7 power grids. According to research accelerated transition to electric
carried out by the consultancy vehicles will pose major challenges
The EU’s Green Taxonomy will help
AT Kearney, annual renewables for automakers that need to develop
to drive private investment into green
investment in Europe will rise from new vehicles and ensure access to
infrastructure. This is an ambitious
€60 billion in 2020 to €90 billion sufficient battery capacity.
attempt to classify economic activities
in 2022. By 2030, investment in
according to their sustainability, and is
European wind and solar capacity 3. Hydrogen as a future energy
intended to influence the way private
will total at least €650 billion and source
capital is allocated, alongside the
could reach €1 trillion.9 This is likely There is growing interest in hydrogen
less prescriptive framework of the
to boost utility valuations in Europe as a clean energy source, although it
17 UN Sustainable Development
significantly, particularly given the big remains expensive relative to others.
Goals (SDGs). Globally, the effort
increase in demand that will result The cost of so-called “green hydrogen”
to achieve the SDGs could create
from the replacement of fossil fuels – made using renewable electricity to
more than $12 trillion in market
with electricity in transportation. It will power electrolysis of water
opportunities8 across four key areas –
also flow through to rising profits at – has fallen thanks to dramatically
health and wellbeing, cities, energy
equipment makers such as Danish cheaper renewable energy,
and materials and food and agriculture.
turbine maker Vestas, which reported but remains seven times higher than
return on capital employed last year fossil fuels. Hydrogen is also difficult
of around 20%.10
16Responsible Investment Quarterly – Q1 2021
to store and transport.13 However, awarded £72 million in funding, partly used for heating and cooling of 18%.
it has major potential in areas where from the UK government, to finance a To achieve this it aims to double the
electrification is not feasible, such as hydrogen carbon capture and storage renovation rate of buildings to 2% over
heavy industry, trucks, shipping and (CCS) project. It is hoped the fresh the next decade, which will require
seasonal energy storage, and the EU capital will accelerate the project to a investment of €275 billion a year.
aims to grow the share of hydrogen final investment decision by 2023 in Energy efficiency standards will also
in the bloc’s energy mix from less order for the initial phase to become be tightened.19
than 2% currently to 13%-14% by operational by 2025.17
These themes are consistent with the
2050.14 To realise this potential, major
4. Building stock opportunities we are seeing in the
policy support will be necessary to
infrastructure space, in particular in the
encourage investment. The European Around three-quarters of the 220
past 12 months those themes linked
Commission estimates the carbon million buildings in the EU are deemed
to methods of decarbonisation such as
price under the EU’s Emissions Trading energy inefficient.18 The EU’s Covid-19
carbon capture, and solutions around
Scheme will need to rise from around recovery plan will channel major
decarbonsiation (both brownfield and
€30 currently to €55-€90 a tonne.15 investment into upgrading them, given
greenfield), namely hydrogen and
Examples of projects getting underway that buildings account for 36% of the
carbon offsetting.
include Ørsted building a 1GW green EU’s greenhouse gas emissions and
hydrogen plant in the Dutch North 40% of energy consumption. The plan’s Thus, the supportive policy backdrop
Sea, which is slated for operations by key targets call for a 60% reduction is presenting sustainability-focused
2030;16 and in the UK Cadent’s HyNet in greenhouse gas emissions from openings within the small mid-cap
North West project, which has been buildings by 2030 and a cut in energy nexus.
17Responsible Investment Quarterly – Q1 2021
120
100
80
60
40
20
0
May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21
Decarbonisation and EVs continue to be areas of focus Biodiversity
Mentions of ESG Themes in event transcripts
Don’t forget social! utmost importance, and strategies
Source: Biofuel to
1 https://ec.europa.eu/clima/policies/
3,500 ensure positive social outcomes
strategies/2050_en
are
Carbon Capture
This rapid move towards net zero embedded in our business plans.
2 Goldman Sachs Equity Research: The EU Green
creates Carbon Offset
3,000 a risk that some people are Deal, July 2020.
3 https://ec.europa.eu/commission/presscorner/
left behind – perhaps those without the Looking forward, Europe’sCircular drive Economy
to
detail/en/IP_20_1599
opportunity
2,500 to reskill into low-carbon green its economy will lead to a new
Decarbonization 4 https://ec.europa.eu/info/sites/default/files/
industries or unable to access the range of opportunities in infrastructure economy-finance/assessment_of_economic_and_
Digital Tax investment_needs.pdf
benefits
2,000 of the new energy system. investment. Indeed, Europe’s 5 IMF.org, Building Back Better: How Big Are Green
Net Zero
The Just Transition acknowledges the policymakers are aware that they Spending Multipliers?, 19 March 2021.
Electric Vehicles 6 https://ec.europa.eu/info/strategy/recovery-plan-
social
1,500 implications of delivering net cannot achieve their zero-carbon goals europe_en
zero, from jobs and training to working without attracting private investment.
Employee Satisfaction 7 https://ec.europa.eu/commission/presscorner/
detail/en/IP_20_2354
with
1,000communities and ensuring no Given the Green Deal’s ambitious
EU Taxonomy 8 https://www.un.org/sustainabledevelopment/sg-
one is left behind (Figure 3). Working timeline over the next 10 years, now finance-strategy/
Furlough 9 https://www.handelsblatt.com/unternehmen/
with
500our portfolio companies – and any is the time to be exploring the major
Green Deal energie/energiewirtschaft-bis-zu-eine-billion-
future ones – to ensure we create a investment themes. euro-fuer-oekostrom-energiekonzerne-planen-
just 0transition for employees is of the Hydrogen rekordinvestitionen/26727336.html
10 https://www.vestas.com/~/media/vestas/
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
investor/investor%20pdf/financial%20
reports/2019/q4/2019_annual_report.pdf
11 Reuters, EU to target 30 million electric cars by
Figure 3: Global employment in energy supply in the net-zero pathway, 2030, 4 December 2020.
12 https://eur-lex.europa.eu/legal-content/EN/
2019-2030 TXT/?uri=CELEX%3A52020DC0789
13 https://www.energy.gov/eere/fuelcells/hydrogen-
60 storage-challenges
14 https://ec.europa.eu/energy/sites/ener/files/
hydrogen_strategy.pdf
15 https://www.icis.com/explore/resources/
Losses news/2020/08/03/10537257/eu-hydrogen-
strategy-could-cause-power-and-carbon-prices-to-
40 drop
Growth 16 https://www.energylivenews.com/2021/04/01/
Million jobs
orsted-to-build-one-of-the-worlds-largest-hydrogen-
plants-at-north-sea-port/
17 https://www.business-live.co.uk/economic-
development/72m-funding-announced-hynet-
20 north-20193274
18 https://ec.europa.eu/energy/sites/ener/files/
eu_renovation_wave_strategy.pdf
19 https://ec.europa.eu/energy/sites/ener/files/
eu_renovation_wave_strategy.pdf
0
2019 2030
Bioenergy Electricity Coal Oil and Gas
Source: International Energy Agency, 2019.
18Responsible Investment Quarterly – Q1 2021
19Responsible Investment Quarterly – Q1 2021
05 Biden’s strong commitment
on climate change
Natalia Luna Brian Aronson
Senior Thematic Investment Analyst, Equity analyst
Responsible Investment
The US president’s “American President Joe Biden’s first months boost clean energy generation and
in the White House fully reflect his US-made electric vehicles (EVs), as well
Jobs Plan” aims to fulfill his administration’s commitment to as modest support for renovations
campaign pledges on climate pursuing a transition to a low carbon of buildings. At the heart of this
economy. Biden has rejoined the Paris approach is the Infrastructure Bill –
change – if he can get it Agreement and recently announced a $2 trillion wish-list of measures to
through Congress a highly ambitious target to reduce get the US on the path to net-zero
emissions by half by 2030.1 emissions by 2050. The infrastructure
proposal includes support for low
In a landmark proposal announced in carbon technologies and core targets
March, Biden’s $2.25 trillion American relating to climate change.
Jobs Plan,2 or Infrastructure Plan,
broadly addresses his campaign Biden unveiled a wide-ranging set of
pledges on climate change, even going spending and tax incentive proposals,
further than expected in some areas. mostly over an eight-year period,
While there may be compromises focused on infrastructure, climate
around the final numbers to get the adaptation and social initiatives.
plan through Congress, it aims to Broadly speaking, the plan sets out
20Responsible Investment Quarterly – Q1 2021
to improve infrastructure, create jobs, storage (CCS), as well as $100 billion capital spending. The Biden proposal
foster innovation and accelerate the in investments for upgrading power specifically references transmission
transition to a zero-carbon economy. infrastructure. investments, as higher voltage lines
It has three priorities for supporting are needed to move green electricity
the energy transition: accelerating A proposed 10-year extension of tax from larger wind or solar sites to load
the shift to a clean power sector; credits for wind, solar and fuel cells centres. What’s more, any measures
the electrification of transport; and goes far beyond the two years of that smooth the siting process for
the renovation of energy-inefficient incentives previously introduced in transmission projects will encourage the
buildings. While there will be December 2020, in a move that would construction of new projects. This major
compromises ahead in order to get accelerate the clean energy transition. investment programme looks positive
the plan through Congress, if passed Under the proposal developers of new for electrical equipment manufacturers,
it should accelerate the US energy renewable energy projects would be as well as select engineering and
transition, with positive implications able to immediately realise the cash construction companies.
for the long-term growth of the sectors value of tax credits, helping their cash
that will help to decarbonise the US flows. Utility companies may also But there are also losers: Biden’s plan
economy. benefit, albeit less directly, as the tax would eliminate fossil fuel subsidies
credits are likely to lower the cost of for oil and gas companies. However,
renewable energy for consumers. Lower this was not unexpected.
Turbocharging clean power consumer bills tend to ease relations
between utilities and state regulators,
Notably, the plan sets out a goal
paving the way for higher capital
Empowering clean transport
of generating entirely carbon-free
electricity by 2035, which was a Biden spending by utilities, boosting growth. Turning to clean transport, the greatest
campaign pledge. It backs this through emphasis in Biden’s proposals is on
Also favourable for utilities is the $100 galvanising the US-made EV market.
surprisingly generous tax incentives for
billion earmarked for upgrading power The plan earmarks $174 billion for the
renewables and carbon capture and
infrastructure, which again supports sector, notably to be spent on installing
21Responsible Investment Quarterly – Q1 2021
500,000 EV chargers by 2030, which railway funding will help delivery and Waiting on Congress
is a modest positive surprise. When rail companies shift their fleets toward
combined with a potential $7,500 clean transport. The Biden plan as it stands is a
subsidy for each consumer buying a significant shift from the policies of
US-made EV, this could be significant, the previous administration and, if
giving consumers confidence in the
Making buildings energy implemented, should accelerate the
charging infrastructure and making the efficient greening of US power, transport and
cost of EVs competitive versus internal buildings – despite the absence of
Reflecting Biden’s modest campaign
combustion engines. The combination some campaign pledges, such as
pledge to kick-start a gradual
of these two measures adds 15%-30% tangible plans about green hydrogen
renovation of buildings, the plan
to Columbia Threadneedle forecasts and details of how agriculture will be
proposes spending $213 billion on
for annual lithium demand from 2021- decarbonised.
improving energy efficiency. Buildings
2025 and could support companies account for roughly 10% of US But that is a big “if”. It now falls to
positioned to address that increased emissions and a third of the country’s Congress to translate the plan to
demand. energy consumption, according to the legislation. It is highly likely that some
The plan’s clean transport initiatives US Energy Information Administration of the provisions are not passed or will
also include a proposed $111 billion (EIA).3 The money will be spent on be altered.
for water infrastructure, including retrofitting 2 million affordable homes,
modernising ageing water systems, building 500,000 new homes and
as well as investments for modernising retrofitting more than a million homes
public transit and rail systems, and with energy-efficient upgrades.
reinforcing the resilience of critical These goals would be accomplished
infrastructure to the consequences through the extension and expansion
of climate change. Investments for of home and commercial efficiency
airports and ports are intended credits, along with the establishment
to make the US a global leader in of a $27 billion “Clean Energy and
clean freight and aviation, while the Sustainability Accelerator” to mobilise
investment in water infrastructure private investment. There is also a
may help companies with products proposal for energy renovation projects
that support efficient water transport, in public buildings.
filtration and treatment. Meanwhile,
$25 billion in airport funding and Major beneficiaries of the drive to
$17 billion in waterway funding, make the US building stock greener are
coupled with other more traditional heating, ventilation and air conditioning Source:
1 The Guardian, Biden vows to slash US emissions
infrastructure spending, should benefit companies. They will play a major part by half to meet ‘existential crisis of our time’,
construction equipment companies. in renovations, significantly reducing 22 April 2021.
2 https://www.whitehouse.gov/american-jobs-plan/
Alongside this, $85 billion in public electricity consumption and replacing 3 https://www.eia.gov/tools/faqs/
transit funding and $80 billion in harmful refrigerants. faqphp?id=86&t=1
22Responsible Investment Quarterly – Q1 2021
23Responsible Investment Quarterly – Q1 2021
06 Climate change, net zero and
the employment myth
entitled “Getting to Zero”1 caught our of Economics’ Grantham Institute,
attention. It has been cited under which raised important questions
press headlines suggesting that as about it.2 The need for caution about
many as 10 million UK jobs would be the methodology used, as well as the
at risk from the UK’s transition to net failure to understand wider changes
zero over the next three decades. taking place or the job creation potential
Is that really the potential implication of policy responses to climate change,
of the UK’s decarbonisation plan? is important.
We think not.
Current longer-term employment
issues do need to be considered in
Will net zero boost the context of an “industrial” revolution
employment growth? that is already playing out and likely
to be accelerated by the effects of the
Iain Richards A good starting point here is a coronavirus pandemic. Digitisation
Head of Global Responsible commentary on the report published and automation are examples of this
Investment Policy by Alex Brown at the London School and more than 80% of CEOs surveyed
Figure 1: Jobs created per $1 million invested
The world is changing and not
just because of climate change.
How companies and governments
respond to the change will have
significant implications, economically
and competitively as well as for
employment, which we will focus
on in this article.
As a research-driven investment
house, identifying, analysing and
understanding the trends and
changes that impact, or will impact,
our investments is at the heart of our
“thematic” research focus. It was in
that context that a recent UK report Source: Joseph Stiglitz, et al. ‘Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?’, May 2020.
24Responsible Investment Quarterly – Q1 2021
by the WEF3 reported that they are reflects a strong trend we were Figure 2: EU employment growth
accelerating the automation of their seeing in the US before the Paris projections by sector
work processes and expanding Agreement withdrawal.
their use of remote work. That has n In contrast, the mining sector faces 2030 (%)
implications for employment, but not a substantial fall in employment Agriculture 0.5
the way some people think. Let’s start reflecting lower production in the Mining -16.6
with some context on climate change: energy extraction sector. Manufacturing 0.7
Utilities -2.4
Framing the scale of the economic n The implications are, of course,
Construction 1.1
not just for employment but
challenge4 Distribution, retail and hotels and catering 0.6
also countries’ economic
Transport and communications 0.5
Scientists have estimated that were competitiveness.
Business servies 0.7
temperature increases to reach three
However, under the same analysis Non-business services 0.3
degrees celsius global GDP would
fall 25%. If they reached four degrees the US’s outlook under the Trump Source: FOME energy scenario projections, 2020.
the decline would be more than 30% administration, having rejected the
climate leadership was clear. With job
compared to 2010 levels. That is Paris Agreement, was not looking so
creation spanning energy efficiency,
comparable to the Great Depression, rosy. That stood in stark contrast to
transportation, renewable energy,
but the difference is that the impact what we were seeing ahead of the
waste reduction, natural resources
would be permanent. then president’s announced withdrawal
conservation and education, the effect
from Paris. Compared to the EU’s
Framing the upside alternative5 was significant – even before exploring
1.1% boost to GDP, the US faced an
the innovation and job creation being
estimated 3.4% contraction in GDP by
I’ll start here at a more regional level, seen across other sectors. At the time
2030 and a 1.6% hit to its job market.7
given differences that are evident. it was estimated that in the US such
It has been estimated that the EU’s The “pre-Paris withdrawal” boost jobs collectively numbered around
GDP would benefit to the tune of being seen in US economic activity 4-4.5 million jobs;8 and, relative to
1.1% by 2030 should it successfully and related jobs growth linked to US jobs in coal mining,9 many of these
implement the Paris Agreement
and transition towards a low-carbon
economy. That is merely a result of
Figure 3: Electric power generation employment by technology
increased investment activity and lower
(Q2 2015-Q1 2016)
imports of fossil fuels, before we look
at any other benefits. 400,000
373,807
In terms of employment, the 350,000
associated upside growth in 300,000
300,192
EU employment is, at the more
conservative end of the scale, around 250,000
Oil: 12,840
0.5%. That is approaching an extra Natural Gas: 52,125
200,000 Coal: 86,035
million jobs compared to business as
usual. The employment implications do 150,000 135,898
vary by country, as well as by sector:6 101,738
100,000
77,088 Bioenergy: 7,980 56,259
68,176
n Services sectors, for example, CHP: 18,034 52,845 56,185
50,000 35,980 36,117 32,695
benefit from both increased 19,559 19,396
7,645 5,768 8,608 9,295
consumer activity but also as part 0
Solar Wind Geothermal Bioenergy Low impact Traditional Nuclear Fossil Advanced Other
of the supply chain of renewables Gas
/CHP Hydro Hydro
and energy efficiency equipment 2015 2016
and installation processes. This
Source: US Department of Energy, US Energy and Employment Report, January 2017.
25200,000 Coal: 86,035
150,000 135,898
Responsible Investment Quarterly
101,738 – Q1 2021
100,000
77,088 Bioenergy: 7,980 56,259
68,176
CHP: 18,034 52,845 56,185
50,000 35,980 36,117 32,695
19,559 19,396
7,645 5,768 8,608 9,295
0
Solar Wind Geothermal Bioenergy Low impact Traditional Nuclear Fossil Advanced Other
/CHP Hydro Hydro Gas
2015 2016
400,000
373,807
350,000
300,192
300,000
250,000
Oil: 12,840
Natural Gas: 52,125
200,000 Coal: 86,035
Figure 4: Perceived barriers to the adoption of new technologies 26 economies it examined – a net gain
150,000 of 12 million jobs.135,898 Education, training
Skills gaps in the local labour market 55.4 and the re-skilling of the workforce
101,738
Inability to attract specialised talent 100,000 46.7Bioenergy: 7,980
77,088 will be56,259critical issues
68,176 in this context.
Skills gaps among organisation’s leadership 41.4 CHP: 18,034 52,845 56,185
50,000 Reflecting that, corporate 35,980planning
36,117 32,695
Insufficient understanding of opportunities 38.9 19,559 on future investment and operations 19,396
7,645 5,768 8,608 9,295
Lack of flexibility of the regulatory framework 0 33.0
Solar
will be influenced by the availability Other of
Shortage of investment capital Wind Geothermal Bioenergy Low impact Traditional Nuclear Fossil Advanced
32.3 the right
/CHP Hydro Hydro skills and talent. It is Gasnot the
Lack of flexibility in hiring and firing 26.3
2015companies 2016 that embrace change that
Lack of interest among leadership 17.9
lose out. As recent historical evidence
Other 5.3
tells us, companies that automate
0 10 20 30 40 50 60
will survive, prosper and hire more
Share of companies surveyed (%)
workers. Those that don’t will end up
Source: WEF, Future of Jobs Report 2020, October 2020.
shedding staff (Figure 5).15
were inherently local, contributing (ALMPs12) an important focus for
The priority for policymakers, then, is
to growth in their local economies. policymakers. The need for, and
how to facilitate the changes needed
Comparing what was being seen merit of, initiatives such as the EU’s
to support those who will adapt and
with160
jobs directly associated with SkillsSkills gaps in13the
Agenda islocal labour
clear. In market
be tomorrow’s winners – this reflects laying 55.4
Number of workers (1998=100)
US electric power generation the the foundations to support talent
Inability to attract specialised
the challenge faced by economies
46.7
future
Skills gaps among organisation’s leadership
41.4
significance
140 of energy transition for competitiveness and address key
across the OECD and beyond. Although
Insufficient understanding of opportunities
38.9
US employment was clear:10 challenges, the World Economic
economic outcomes over the past
120 Lack of flexibility of the regulatory framework
33.0
Forum’s work highlights some of the
20 years have varied widely and
Coming back to the UK’s transition to Shortage of investment capital
32.3
challenges policymakers need to
net 100
zero, there are clearly employment employment has risen, wages have not
Lack of flexibility in hiring and firing
26.3
consider (Figure 4).14
only stagnated for many but the costs
implications that were largely in line Lack of interest among leadership 17.9
with 80
the EU average. Rather than there The WEF estimates that by Other 2025 5.3 of housing, healthcare and, notably
being an impending job disaster, there 85 million jobs may be displaced, 0 10 in this
20context, 30education 40 have50risen, 60
1990 1994 1998
are in fact very real opportunities on 2002 2006 2010
while 97 million new roles may 2014 more than
Share of offsetting
companies income
surveyed (%) gains.
16
Robot adopters Non-adopters
offer for the UK and seizing that in a emerge across the 15 industries and
post-Covid and post-Brexit world will
be important.
Figure 5: Robots in the workplace
The UK’s adoption of climate-
relevant approaches as part of a 160
Number of workers (1998=100)
strategic approach to economic
stimulus and recovery11 will have 140
important and positive implications
for both job creation and long-term 120
competitiveness. As part of this, the
need for policymakers to embrace 100
“inclusive growth”, taking account of
the trends playing out, should not be 80
underestimated. The rebalancing we 1990 1994 1998 2002 2006 2010 2014
expect to see in the jobs market will Robot adopters Non-adopters
make active labour market policies
Source: Michael Koch, et al. “Robots and firms”, July 2019.
26Responsible Investment Quarterly – Q1 2021
Conclusion change, help recovery post-Covid and Source:
1 Onward, Getting to zero: A practical policy
benefit from real upside opportunities. commission to deliver decarbonisation in the UK,
For investors, understanding the issues Our world and economies are already January 2021.
and challenges companies will face changing – economic, technological 2 Net-zero: bad for UK jobs?, 15 January 2021.
3 WEF, The Future of Jobs Report 2020.
in securing the right skills, expertise and societal change are a reality and 4 Nature, Large Potential Reduction in Economic
and talent needed to respond to these the effects of Covid will accelerate the Damages Under UN Mitigation Targets,
changes will be important. The focus 2 November 2020.
changes we are seeing. Companies 5 Eurofound, Energy scenario: Employment
on, and approach to, education and and governments will either rise to implications of the Paris Climate Agreement,
training by policymakers will play an 12 February 2019.
the challenge they face or fail their 6 FOME energy scenario projections, 2020.
important role in this at a national level. stakeholders. 7 Eurofound, Energy scenario: Employment
implications of the Paris Climate Agreement,
The right long-term policy approaches, For countries such as the UK, 12 February 2019.
8 EDF Climate Corps and Meister Consultants Group,
combined with and facilitating forward- recognising these dynamics and taking December 2017.
looking programs by companies, advantage of them will be critical to 9 The coal industry, which had shed jobs since
2012 given competition from cheap natural gas,
will help sow the seeds for success. pursuing the right policy options and employed just over 160,000 workers nationwide, of
Corporate initiatives such as SSE’s ensuring their future prosperity and which about 53,000 were in mining, according to a
Supporting a Just Transition17 or AT&Ts January 2017 US Energy and Employment Report
competitiveness. from the US Department of Energy.
Future Program18 already illustrate 10 US Department of Energy, US Energy and
strategic approaches to business Employment Report, January 2017.
11 Joseph Stiglitz, et al. Will COVID-19 fiscal recovery
adaptation and investment in the packages accelerate or retard progress on climate
future. That said, for many companies change?, May 2020.
12 Luca Sartorio, et al, What works for Active Labor
unilateral solutions – absent the right Market Policies?, July 2019.
policy environment and support – may 13 https://ec.europa.eu/social/main.jsp?catId=1223
14 WEF, The Future of Jobs Report 2020,
not be viable.
October 2020.
15 Michael Koch, et al, Robots and firms, July 2019.
With all these factors at play, one thing 16 McKinsey Global Institute, The social contract in
that is clear is that the Paris Agreement the 21st century.
17 SSE, https://www.sse.com/media/xtrlsctj/
should not be seen as a threat to just-transition-strategy-sse-final.pdf,
employment; if anything the opposite 18 November 2020.
18 https://www.cnbc.com/2018/03/13/atts-1-
is true. It represents an opportunity – billion-gambit-retraining-nearly-half-its-workforce.
both to mitigate the impacts of climate html, 13 March 2018.
27Responsible Investment Quarterly – Q1 2021
STEWARDSHIP IN ACTION
Our stewardship activities are The research and analysis While analysing meeting agendas
integral to our investment process, emerging from this, and the ongoing and making voting decisions,
allowing us to detect inflection engagement with companies, is we use a range of research
points and long-term trends, and disseminated globally throughout sources and consider various ESG
influence companies’ standards the firm as part of our culture of issues, including companies’ risk
around ESG risk management research intensity and helps us management practices and evidence
and sustainable outcomes. A key identify potential issues at an of any controversies.
focus is to enhance our investment early stage.
research so that we can make Our final voting decisions take
informed capital allocation decisions In prioritising our engagement work, account of research issued by proxy
as active investors. we focus our efforts on the more advisory organisations such as
financially material or contentious ISS, IVIS and Glass Lewis, as well
The ultimate goal of our stewardship issues and themes, and the as MSCI ESG Research. Although
approach is to enhance our issuers in which we have large we subscribe to proxy advisors’
understanding of our exposure holdings. There are many companies research, votes are determined
to risks and opportunities that with which we have ongoing under our own custom voting policy.
may affect our ability to deliver engagements, as well as a number Votes are cast identically across all
sustainable long-term value for that we speak to on a more ad hoc mandates for which we have voting
clients. In approaching these basis, as concerns or issues arise. authority. All our voting decisions
responsibilities we are mindful are available for inspection on
of market trends; company, local We vote actively at company our website seven days after
market and industry-specific issues; meetings. We view this as one each company meeting in EMEA/
and relevant best-practice standards of the most effective ways to APAC, and are updated annually in
– but we will ultimately be guided signal approval (or otherwise) September in the US.
by what is in the best long-term of a company’s governance,
economic interests of our clients. management, board and strategy,
or standards of operating practice.
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