Federated Hermes, Inc. is dedicated to its duty under fiduciary law to achieve our clients’ investment objectives and to invest responsibly. Responsible investing is not about promoting a specific political agenda.
Federated Hermes believes that considering environmental, social and governance factors provides necessary information and a decision-making advantage. There is, in our view, no conflict between the objective to maximise returns and the evaluation and integration of material qualitative and quantitative ESG factors. Ignoring material information is inconsistent with our fiduciary duty.
Climate change is one such consideration. Companies and their employees are facing changing economic structures related to climate change. This creates both opportunities to new industries, but also to be mindful of the need of a just transition that does not ignore the need for job security. Therefore, we have played a leading role in the Climate Action 100+ initiative through our stewardship arm, EOS, and we support enhanced, consistent material climate disclosure.
We work with a range of clients who hold different views on ESG. Some embrace ESG integration and others do not. We engage with all, listening to their views and putting forward our capabilities to meet needs consistent with their convictions. For some, it means an investment approach of full ESG integration; for others it represents some form of divestiture. Meeting fiduciary standards is enhanced by not removing ourselves from this process and the forums where issues are discussed.
We participate in hundreds of events around the world to engage with clients and prospective clients and present our thoughts on achieving sustainable wealth creation. We participate with the events of a variety of organisations, including the Prince of Wales Sustainable Markets Initiative, Robert F. Kennedy Human Rights, the Impact Investing Institute, the International Sustainability Standards Board, Focusing Capital on the Long Term, the National Association of State Treasurers and the State Financial Officers Foundation. We do not set the agendas for these organisations; rather, they operate according to their unique charters and the views of their members and elected leadership. Our participation does not serve as an endorsement of any organisation’s particular perspective on any issue.
In each forum in which our clients participate, we are there to listen, learn and exchange ideas about how to responsibly create and optimize wealth for their companies, governments, clients and employees. Listening to different points of view is critical to the engagement process. Diversity of thought and respect for the views of others, no matter how they differ from our own, is critical to long-term consensus building and the betterment of our world.
Federated Hermes is committed to the responsible investment and stewardship of the funds and bespoke mandates we, as a global leader, have been privileged and entrusted to manage as a fiduciary for each of our clients.
Leon Kamhi, Head of Responsibility and EOS, Federated Hermes Limited
Saker Nusseibeh, CBE, CEO, Federated Hermes Limited
J. Christopher Donahue, CEO, Federated Hermes, Inc.