Launched in February this year, Schroders' Engagement Blueprint aligns its engagement process with its ESG policy.
The blueprint follows three methods for active engagement:
- Dialogue – speaking with companies to understand how they are preparing for long term sustainability challenges;
- Engagement – working with companies to help them recognise the potential impact of these challenges and take action where required; and
- Voting – using the rights as shareholders to ensure change and hold directors to account on ESG topics.
This was awarded the ESG engagement initiative of the year for its holistic approach to ESG engagement. Awards judges also noted its successful focus on outcomes as an integral part of the engagement process.
Alongside fitting into Schroders long-term goals of alignment with the Paris Agreement and UN Sustainable Development Goals, unique objectives are also set for each company. These will depend on its current practices, material issues, geography and sector.
Schroders explained that while continuous engagement is necessary, it will escalate its process "where we have engaged repeatedly and seen no meaningful progress". This could include communicating concerns with non-executive directors, collaborating with other investors, voting against management or even divestment.
The Engagement Blueprint "establishes and articulates the guiding principles around our active ownership efforts" Schroders said. It added that it helps to "ensure we have a common voice across the asset classes we manage, as well as through our engagement and input to policy makers, regulators and industry groups".