Henderson (Corporate Activity)
SRI / Ethical Overview
Henderson’s portfolio managers, sector analysts, ESG and corporate governance personnel maintain regular dialogue with companies. This dialogue allows the firm to monitor the development of companies’ businesses, including areas such as overall strategy, business planning and delivery of objectives, capital structure, proposed acquisitions or disposals, corporate responsibility and corporate governance. Henderson subscribes to research covering corporate governance and corporate responsibility issues, to supplement in-house analysis.
Analysis is shared on internal IT systems and frequent discussion takes place between governance, ESG and sector analysts and fund managers. Electronic records of all engagement, voting and other corporate governance and corporate responsibility activities, including the rationale for voting decisions, are kept.
Overall responsibility for monitoring company performance rests with portfolio managers. Analysts specialising in corporate governance and corporate responsibility issues work alongside portfolio managers to identify relevant issues, which are fed into our investment process, and may also form the basis for company engagement.
Fund managers are ultimately responsible for the integration of ESG issues into investment decision making and engagement as part of their investment processes. To help facilitate this we subscribe to a wide range of specialist external ESG research to complement in-house research and engagement. This research is made directly available to all investment teams, as well as being used by the in-house Governance and Responsible Investment (GRI) team to screen for ESG issues of concern.
The GRI team is a specialist resource that supports fund managers on corporate governance issues (including voting) as well as wider environmental and social issues. They make use of a wide range of external specialist ESG research, including MSCI, EIRIS, Trucost, IVIS, RepRisk, ISS and broker research. The team work on behalf of fund managers and our clients by ensuring that ESG issues are raised prior to key company meetings and investment risk meetings.
SRI Policies (Primary strategy in bold)
- - No primary policy area
- ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
- Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
- Integrates ESG factors into all/most fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
- Vote all* shares at AGMs/EGMs This fund manager votes or aims to vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' - where fund managers consider - and express their views on - the key business issues effecting the companies they part own. (*Allowance is made for exceptional situations such as when shares are in the process of being sold.)
- In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
- Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
- UK Stewardship Code signatory Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave as responsible 'company owners'.
- Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
- Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
- Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
- Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
- PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.
SRI / Ethical Policy
ESG issues are integrated into our risk reporting and fund review processes. Fund managers receive ESG investment risk reports detailing portfolio exposure to companies rated highest risk for ESG issues, as well as overall portfolio performance and any changes to company ratings. These ESG risk reports are discussed at regular fund risk review meetings.
Resources, Affiliations & Corporate Strategies
Fund managers are ultimately responsible for the integration of ESG issues into investment decision making and engagement as part of their investment processes. They are assisted in this by the GRI team (please see above).
Sources of ESG related data that are used to build the ESG investment risk reports include: EIRIS, MSCI, ISS, RepRisk, IVIS, CDP, TruCost, HOLT
Henderson is actively involved / member of the following initiatives: Carbon Disclosure Project (CDP), Extractive Industries Transparency Initiative (EITI), Institutional Investors Group on Climate Change (IIGCC), National Association of Pension Funds (NAPF), UN Principles of Responsible Investment (PRI), UK Sustainable Investment Forum (UKSIF), European Sustainable Investment Forum (EUROSIF), UN Environment Programme Finance Initiative (UNEP FI), Asian Corporate Governance Association (ACGA), The Investor Forum, Access to Medicines Initiative.