How we've updated our Engagement Blueprint
Here's why and how Schroders has updated its inaugural Engagement Blueprint, which lays out our expectations of companies across six thematic areas.
In 2022, we released our inaugural Engagement Blueprint, setting out our ambitions and approach to active ownership at Schroders. The Blueprint lays out our long-term expectations of companies across six thematic areas. It aims to bring transparency to our investee companies and our clients around our expectations, while also giving our internal investment teams guidance for their engagements on the most material issues.
We are proud that the Engagement Blueprint was awarded ESG Engagement Initiative of the Year at Environmental Finance’s Sustainable Investment Awards 2022.
Sustainability is a complex and multi-faceted topic. It is also ever-changing, whether that be through new research, expanding data availability, regulation or government action. In this landscape, we cannot stand still and so have committed to update our Blueprint on an annual basis.
We will continue to review our priorities and expectations as our understanding of the issues and market best practice evolves to ensure we are pushing for change in the most effective way.
In summary, the main changes to the Blueprint for 2023 are:
A greater focus on the Just Transition
In an effort to better describe how we address the social implications of the net zero transition, we have added a section on the Just Transition. This sub-theme links to the other relevant themes (human rights, human capital management and diversity and inclusion).
Expanding our natural capital and biodiversity expectations
Schroders is a member of the Natural Capital Investment Alliance and became signatories to the Finance for Biodiversity Pledge in 2022. Our Biodiversity and Natural Capital Position Statement sets out our approach to the investments we manage and our own operations when it comes to nature and biodiversity.
In this edition of the Blueprint we have expanded our expectations of companies, with a particular focus on deforestation. This reflects our proprietary research, evolving market guidance and our firm-wide commitment to this topic.
Our Shareholder Resolution Framework
Shareholder resolutions have seen a growing focus in recent years and we consider them an important tool for expressing our views and expectations to investee companies, especially for areas not covered in standard AGM votes. In this Blueprint we have outlined how we analyse shareholder resolutions in practice around four questions:
Is the resolution aligned with our Blueprint?
Is the resolution the best way to address the issue
Does the resolution add value to what the company is already doing?
Does the resolution have the potential to cause unintended consequences?
In September 2022, Schroders became signatories to the Operating Principles for Impact Management (OPIM). Active ownership is an important element to delivering impact, particularly in public markets. In this edition of the Blueprint we have outlined our approach to impact-driven engagements.
The evolution of our Blueprint reflects the evolving landscape and feedback from investors and clients. Looking ahead, we will continue to review and evolve our expectations to ensure we are using our influence to push for progress on the most material risks and opportunities faced across our clients’ portfolios.
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. The content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.