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SDG Engagement Equity: 2019 Annual 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 our 2019 Annual Report, we reflect how we target both traditional financial performance goals and positive and environmental change by engaging with companies to help deliver the Sustainable Development Goals (SDGs).

What progress did we achieve over 2019? In this report, we consider how: 

  • Leveraging networks can be the key to catalysing action. Our roundtable seminar on SDG 3.7 – universal access to sexual and reproductive health – showed how different parties can collaborate to achieve goals.
  • Decent work is inextricably linked to other SDGs. Companies have a considerable impact on individual lives and can affect economic, physical and mental wellbeing. Almost 50% of our engagements were connected to SDG 8 – decent work and economic growth – in 2019.
  • An intelligent voting strategy can generate long-term shareholder value. In 2019 we voted against management on at least one resolution at 20 meetings. Executive compensation continues to be the main reason we exercise our voting rights.

We also provide a snapshot of the portfolio’s emissions intensity and the level of employee wellbeing in the underlying companies. To find out more, read the full report or have a look at figure 1 to see the intensity of our focus on each SDG. In this graphic, we look remove any duplication caused by covering multiple goals in a single engagement interaction. 

Figure 1. Our SDG engagement intensity in 2019 

Source: Federated Hermes, as at December 2019. 

More Insights

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Global Emerging Markets engagement case study: TSMC
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Monthly Fund Commentary, August 2020
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While green-bond-financed projects are necessary in solving the climate crisis, they are not sufficient.
Federated Hermes Macro Fireside Chat: “Does the Debt Matter?”, September 2020
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