Sustainability in action

Evidence of our integrity in targeting Sustainable Wealth Creation.

Hands holding a light bulb and a movie smack

We invest and engage with conviction and focus on sustainability for the long term. Achieving this is the result of sustained, focused effort over many years.

But what does this require on a day-to-day basis? Here we take a granular look at the short-term activity that compounds towards positive outcomes for investors, society and the environment.

The power of engagement

Returns

7.1%

Engagement success can support outperformance. Research shows that companies undergoing positive change can generate an additional 7.1% in additional annualised returns.1

Assets

£1.14tn

Through our stewardship team, EOS at Federated Hermes, we have over £1.14tn in assets under advice.

Objectives

1,138

We engaged with 1,138 companies in 2022 and made 134,188 proposal recommendations.

Governance

894

We engaged with 486 companies on the topic of governance in 2022 raising 894 issues and objectives in 2022.

Companies

79%

We take a long-term view and have engaged with 79% of our companies for five years or more, and 69% for eight years or more.

Voting: Coverage

134,188

In 2022 we made voting recommendations at 13,814 meetings on 134,188 resolutions.

Voting: Resolutions

24,461

In 2022, we recommended voting against 24,461 proposed resolutions.

Voting: Themes

48%

Of these, 48% related to board structure and 25% to remuneration.

Source: Federated Hermes as at 31 December 2022.

1Dimson, E., Karakaş, O. and Li, X. (2015). “Active Ownership,” published in The Review of Financial Studies, 28(12), 3225-3268. Past performance is not a reliable indicator of future returns.

Creating impact through the SDGs

Our SDG Engagement Equity and SDG High Yield Credit capabilities seek outperformance through impact. Through engagement, they focus on helping companies improve to support delivery of the Sustainable Development Goals (SDGs).

SDG-driven engagement in 2022

SDG Engagement Equity

0
SDG engagement actions with…
0 %
of portfolio companies engaged

SDG Engagement High Yield Credit

0
SDG engagement actions with…
0 %
of portfolio companies engaged

Collaborating for change

As engagers, we aim to catalyse initiatives, create and strengthen relationships, heighten ambitions and accelerate progress on achieving sustainable outcomes for all stakeholders. In doing so, we recognise that companies ultimately deliver change supporting the delivery of the SDGs.

Focused on a range of key sustainability issues, including:

Women in STEM

Sustainable land use

Employee wellbeing

Circular economy

Carbon-emissions reduction

Corporate governance

Human-capital management

Recycling and waste reduction

Cobalt supply chains

Renewable energy

Human rights

Water use

Collaborating for change

As engagers, we aim to catalyse initiatives, create and strengthen relationships, heighten ambitions and accelerate progress on achieving sustainable outcomes for all stakeholders. In doing so, we recognise that companies ultimately deliver change supporting the delivery of the SDGs.

Achieving the following SDG intensity

The intensity of each strategy’s focus on specific SDGs is shown below. The larger the SDG icon, the greater the number of engagement actions aligned with its delivery.

Source: Federated Hermes as at 30 June 2022. Please note: because one engagement action with a company can address numerous SDGs, the sum of SDG-aligned engagement activities shown above will exceed the total number of engagement actions for the period.

Collaborating for change

As engagers, we aim to catalyse initiatives, create and strengthen relationships, heighten ambitions and accelerate progress on achieving sustainable outcomes for all stakeholders. In doing so, we recognise that companies ultimately deliver change supporting the delivery of the SDGs.

Advocating progressive policies

Our involvement in investment and sustainability organisations enables us to help shape the policy architecture governing markets in a way that supports the delivery of Sustainable Wealth Creation.

Seeking sustainable finance

Through actions in industry groups and consultations with regulators, we aim to contribute to an investment and financial system that works for all stakeholders.

Badge big

Defining best-practice ESG

Which analytical tools and disciplines separate the leaders from the pack?
White tree

Our definitions

Seeking clarity on sustainability? We provide definitions that we stand by.

Want to know more about our delivery of Sustainable Wealth Creation?