Inclusion of sustainability data enhances transparency of Schroders Assessment of Value Report 2022

Schroders is today publishing its third Assessment of Value report (AoV)[1], which includes details of each UK-domiciled investment fund that we manage. The AoV report is aligned with our core purpose to provide the best possible service and investment performance through active management.

This years’ report has been enhanced by the inclusion of sustainability data at individual fund level for the first time.  Announced in September 2021, Schroders has now incorporated sustainability data[2] for all of its reported funds (where data is available), adding a further layer of reporting transparency. The sustainability data is supported by Schroders proprietary award-winning[3] measurement tool, SustainEx, which enables its investors to understand the direct impact their investments are having on society and the environment.

James Rainbow, Chairman of Schroder Unit Trusts Limited and Head of Schroders UK business, commented:

“We strive to deliver both quality returns and create meaningful impact for our investors. Now that sustainability is transitioning from being a nascent development for our clients and regulators, environmental, social and governance (ESG) factors are playing an increasingly critical role in how we invest. As a result this year we have included sustainability data for each of the funds in our Assessment of Value Report, adding a further layer of transparency.”

Andy Howard, Global Head of Sustainable Investment, commented:

“Societal, political and regulatory focus on sustainability and sustainable investment is intensifying. Issues such as climate change, biodiversity loss, inequality, discrimination, and corruption present risks and opportunities and, in many cases, will require significant and sustained investment. Asset managers are at the centre of these pressures and can play a crucial role in tackling them.

Our commitment to investing responsibly is paramount to how we allocate capital on behalf of our clients. The inclusion of sustainability data in this year’s Assessment of Value Report is an important milestone in being transparent about how we are integrating sustainability into our investment processes and the impact of our investments on the environment and society.”

Schroders AoV approach is aligned with the seven areas required by the Financial Conduct Authority’s (FCA) rules which encompass performance, costs, charges and quality of service. The report also provides the methodology, conclusions and next steps for each of the seven areas, as well as describing the key governance actions we take during the Assessment of Value lifecycle.

Schroders produced its first annual Assessment of Value report in April 2020 and our subsequent report in April 2021. As a result of previous years’ assessment we implemented four significant changes that benefit and bring savings for our investors;

• We have taken action on individual funds which were identified as not consistently demonstrating value, by enacting fund manager changes and portfolio composition changes;
• We also setup an automated process for share class conversions to move investors into cheaper share classes, for those that are eligible;
• We introduced scale discounts for retail investors in our largest funds;
• Finally, we reduced fee levels for our funds where our analysis deemed appropriate.

Our core purpose is to provide the best possible service and investment performance through active management. To achieve this, we continuously reviewed the value we deliver throughout the year and take pride in the fact that we take timely and appropriate action when necessary.

In 2021 we successfully integrated ESG factors into the decision-making across all of the assets we manage on behalf of our clients.

[1] Data for this report is as at 31 December 2021

[2] The sustainability data including in the report is for information only and doesn’t form part of our assessments.

[3] We have received the following awards to date: “Prix Impact” awarded by Option Finance in France in 2019; Impact Award granted by Environmental Finance in the UK in 2020; Most Innovative ESG Product awarded for SustainEx by an independent panel of judges comprised of representatives from leading financial firms, academics and experts at the annual ESG Investing Awards in the UK in 2021