FHL Stewardship Report 2023

At Federated Hermes Limited (FHL) we believe the investment industry can be a powerful force in building resilient companies in resilient economies that can benefit clients and their beneficiaries – and that active stewardship is hugely important to achieve this objective. In this, our fourth Stewardship Report, we describe our continued stewardship work across asset classes during 2023 and the outcomes of these activities.

Fast reading

Monitoring engagement outcomes is crucial in ensuring our approach is effective and achieves the desired results. As such, this report contains new and updated examples, case studies and metrics throughout to demonstrate how our approach works in practice.
This year’s report features information on our first deforestation risk assessment and mitigation activities across our public markets, real estate, infrastructure, and direct lending portfolios, which were produced in line with our commitment to strive to eliminate commodity-driven deforestation from our portfolios by 2025.
We also deep dive into the COP28 summit in the United Arab Emirates – a key focus of our advocacy efforts during 2023 – touching on our expectations of the negotiations, outlining our activities, and summarising the outcomes.

In our fourth Stewardship Report, we outline our purpose, beliefs and values, and engagement approach. The report includes highlights of our collaborative engagement activities, stewardship outcomes and impacts, and the policies underpinning what we do. It also demonstrates how we contribute to building a global financial system that aims to deliver improved long-term returns for investors, as well as, where possible, better outcomes for society.

Building on last year’s reporting, we have included information from our first report on deforestation risk assessment and mitigation activities across our public markets, real estate, infrastructure, and direct lending portfolios. We have also set out the updates to our diversity, equity, and inclusion (“DE&I”) Strategy and the formation of six core DE&I project groups.

Elsewhere, we present a deep dive on our advocacy work at the COP28 summit in the United Arab Emirates and detail our expectations going into the negotiations, as well as our key takeaways. We also consider our efforts to contribute to global efforts to tackle biodiversity loss through involvement with collaborative initiatives such as the Finance for Biodiversity Foundation and Finance Sector Deforestation Action initiative.