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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.

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