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SDG Engagement Equity: 2020 H1 Report

Launched in January 2018, the Hermes SDG Engagement Equity Fund has the dual purpose of delivering attractive returns and measurable real-world impact.

In just a few short months, the outbreak of the coronavirus pandemic means the world has changed dramatically. Nonetheless, the topics we have focused on since the inception of the SDG Engagement Equity Fund remain pertinent – and arguably more so than ever.

In our 2020 H1 Report, we reflect on how we target both traditional financial performance goals and positive and environmental change by engaging with companies to help deliver the Sustainable Development Goals. What progress did we achieve over the first half of 2020? In this report, we consider:

  • How our portfolio companies have reacted to the pandemic. Many have responded in a constructive way by cancelling or pausing share buybacks and dividends and using their position to support wider stakeholders.
  • The progress of our engagements. Approximately 62% of our engagement objectives with existing holdings have reached milestones three or four (the development and implementation of relevant plans).
  • How we are engaging for greater equality in the Japanese labour market. While we recognise the positive elements of Japan’s career culture, the untapped talent of the country’s female population has a clear opportunity cost.
  • Our engagement with Techtronic Industries, which covers cobalt mining, emissions-reduction targets and increased workforce diversity.

While the economic, health and social pain brought about by the pandemic cannot be underestimated, there are some silver linings. Overall, we believe that the pandemic could spur a greater sense of social awareness and provides an opportunity for businesses to embrace strategies that decouple growth.

To find out more about these issues and our progress in the first half of the year, read the full H1 2020 Report.

Download the H1 2020 Report
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Hamish Galpin
Director, Head of Small and Mid Cap, Lead Manager of Global Small Cap

Hamish is the Head of the Small & Mid Cap team, which he has led since its creation in 2007. He has been at the international business of Federated Hermes since 1995, when he joined as co-manager of the UK smaller companies strategies; he served as lead manager from January 1997 to April 2010. Since the founding of the team, Hamish has gradually assumed a more global perspective, with oversight of the holdings across all of the team's strategies, and he is now lead manager of the Global Small Cap strategy. He has a background in credit, having started his career in the energy and natural resources division of NatWest Bank, and later moving to Bankers Trust as a credit analyst covering European corporates. He has a BEng (Hons) in Civil Engineering from Nottingham University and is a former director of the Hermes Group (DB) pension scheme. Hamish also sits on the Hermes Governance Group, which monitors the Hermes (DC) pension scheme.

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Will Pomroy
Lead Engager SDG Engagement and Small & Mid Cap Equities

Will joined the international business of Federated Hermes in 2015 and, in addition to overseeing and leading the engagement programme for the SDG Engagement Equity strategy, provides ESG analysis for and engagement with stocks in the firm’s small- and mid-cap strategies. Will has a decade of experience in the responsible investment space having, among his previous roles, led the stewardship and corporate governance activity of the UK’s National Association of Pension Funds (now known as the Pensions and Lifetime Savings Association). Prior to entering the world of responsible investment, Will worked as a senior parliamentary researcher in the UK Parliament. He chairs the Corporate Governance Expert Group of the Quoted Companies Alliance and is a member of the Corporate Governance Committee of the Institute of Chartered Accountants in England and Wales. Will holds an MSc in Public Policy and Management from Birkbeck College at the University of London and a BSc (Hons) in Forensic Science from the University of West of England. He also holds the Investment Management Certificate and the Certificate in ESG Investing, both from the CFA UK.

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