Academy
An educational hub about sustainability and investment developed by our experts
Welcome to the Federated Hermes Academy – an educational hub developed by our experts for our clients and prospects seeking to understand responsible investing and how the integration of environmental, social and governance (ESG) and stewardship can help create long-term wealth sustainably.
From the basics of ESG and stewardship to impact investing and advocacy, we will equip you with the knowledge needed to navigate the landscape of acronyms and approaches used across the investment industry and discern genuine integration from greenwashing.
Sustainability seminars
Our sustainability seminars are CPD accredited and one-hour long. Please note our seminars can be tailored to your specific requirements. If you’d like bespoke sustainability and investment training, please contact your sales representative. Otherwise, please secure your place by registering for the modules below.
Access all of our past Academy sessions from our successful Seasons One and Two, run throughout 2021 and 2022.
Module 1
The purpose of investment: ESG essentials
Since our beginnings, our purpose has always been the same: to deliver Sustainable Wealth Creation – that is, by generating wealth through investments that enriches investors, society and the environment over the long term. As investing sustainably is pushed further into the mainstream against the backdrop of the global coronavirus pandemic and the impending climate crisis, it is more important than ever to understand the purpose of investment and the often-confusing terminology being used across the industry. In this seminar, we will wade through the noise and present our sustainability and investment lexicon, spanning definitions of ESG factors to stewardship. We will also examine the different styles of responsible investing.
- A clear articulation of the purpose of the investment industry and the role of investing with sustainability and stewardship factors in fulfilling this purpose
- A clear perspective on ESG and sustainability-related terminology
- Understand the range and evolution of ESG investing approaches
Module 2
Stewardship: a force for change
Today, EOS at Federated Hermes is one of the largest stewardship resources globally, with more than £938bn in assets under advice. In this seminar, we will explore the purpose of stewardship, its importance as the investment industry’s social licence to operate, and its essential role in lowering risk, delivering sustainable outcomes and strengthening long-term returns. We will also examine evidence that demonstrates how stewardship pays off and present best practice approaches that are being used across different asset classes.
- Explain the role of stewardship in investment
- Understand the different approaches to carry out stewardship across asset classes
- Demonstrate stewardship in practice and the benefits achieved
Module 3
A practical guide to integrating ESG and engagement insight
As a pioneer of ESG investing and engagement, we act on evidence that our investment approach supports long-term outperformance and change. In this seminar, we will highlight how extensive research demonstrates the link between the integration of ESG and stewardship and risk and returns. We will explain the different integration approaches available making a distinction between thematic and mainstream investment. We will also review best practice approaches in both public and private markets, and describe what investors should look for when judging the efficacy and credibility of an investment manager’s integration approach.
- Understand the why of ESG and stewardship integration
- Understand best practice in the integration of ESG and engagement insights in public and private markets
- Provide the ability to discern between greenwashing and credible ESG and stewardship integration
Module 4
Delivering positive outcomes: impact investing
By integrating ESG analysis and stewardship into the way we invest, and launching the world’s first equity and bond strategies driven by engagement on the Sustainable Development Goals (SDGs)1, we have always been at the vanguard of responsible investment. In doing so, we have delivered sustainable outcomes for investors since day one. In this seminar, we will examine the fundamentals of impact investing, how impact can be measured, and how companies and investors can contribute to the SDGs. We will also demonstrate how investment and stewardship can lead to the delivery of tangible social outcomes alongside outstanding investment performance.
- Describe impact investing, the SDGs and their importance to investors
- Review the range of approaches currently available to measure impact and SDG performance
- Understand how impact investing and stewardship can deliver sustainable outcomes in practice
Module 5
Advocating for a better future for investors and society
In this seminar, we will examine how asset managers can constructively engage with regulators and policymakers globally to ensure the whole economic system – and the investment industry in particular – works in the interests of investors and society as a whole. As background, we will provide a brief history of advocacy in the investment industry as well as the key changes that have occurred as a result of advocacy efforts. We will address governance, environmental, social and other market failures that may prevent the financial system from operating in the best interests of its ultimate asset owners. We will also explain how pension funds and other institutional investors can play a role in addressing the major ESG issues including climate change and inequality in different countries and sectors. Our Responsibility Office, which develops and leads the implementation of our advocacy positions, will provide a range of examples of its work.
- A history of advocacy in the investment industry
- An overview of today’s pressing public policy issues
- Understand how the investment industry can help advocate for change in the industry
¹ “A pioneer of responsible investing,” published by Federated Hermes in February 2020.
Module 2
The net-zero imperative
While 90% of the global economy has now pledged net zero carbon emissions over the next 30 to 50 years, ambitions still fall short of the goals laid out in Paris Climate Accords. Even after 2021’s COP26 climate change conference, updated government pledges would put the world on a 1.8°C post-industrial warming trajectory, according to estimates from the International Energy Agency.
Although the exact route to net zero remains unclear, the imperative for investors is not: only a massive combined effort by all stakeholders can achieve a 1.5 °C pathway.
Learning outcomes:
- Understand the backdrop to the climate crisis
- Explore what needs to be done to avert catastrophic global warming
- Learn about the role of active management in mitigating CO2 emissions
Module 3
All together now: Why social inclusion matters
Social inclusion is the foundation for shared prosperity. In its absence, inequality thrives and poverty gains a foothold.
With a world subject to massive social transformation, rising urbanisation, climate change, seismic shifts in technology and transformative demographics, the question of inclusion sits at the heart of everything we do as responsible investors.
Learning outcomes:
- Understand how social exclusion undermines prosperity
- Explore how social inclusion has the potential to transform global GDP
- Learn what investors can do to bring about change.
Module 4
A design for life: Building better through sustainable real estate
According to the World Economic Forum, the real estate sector consumes over 40% of global energy each year, buildings are responsible for 20% of global greenhouse gas emissions, and the construction industry consumes c.40% of the world’s raw materials annually.¹
Against this backdrop, it’s little wonder that sustainable real estate is considered a critical element in achieving momentum towards the world’s net zero ambitions.
Learning outcomes:
- Understand the carbon challenge facing the real estate sector
- Explore paths to remediating the industry’s carbon footprint
- Learn how investors in real estate can engage with stakeholders and advocate for more sustainable approaches
¹ World Economic Forum: ‘Environmental Sustainability Principles for the Real Estate Industry’.
Understanding the basics of sustainability and investment
What does ESG stand for?
- Environmental: climate change, natural resource stewardship, pollution, waste and the circular economy.
- Social: human rights, indigenous people’s rights, child and slave labour, bribery and corruption, inclusion and diversity, health and safety, ethics, conduct and culture.
- Governance: board composition, succession planning, executive remuneration, minority shareholder rights and protections, and investor stewardship.
Please note, the items listed above for each factor are not exhaustive. They are examples of each factor that are included solely for illustrative purposes.
What is active ownership?
Using the rights of influence as financial stakeholders to actively engage companies or assets and other stakeholders to further the long-term interests of end investors. This consists of objective-driven dialogue seeking positive and sustainable change in the purpose, governance, strategy operations and in the impact on the environment and society.
What is Stewardship?
The role in which investment managers use the rights – if not the obligation – of financial stakeholders to engage with companies or assets to pursue the objective of sustainable wealth creation for investors.
The motivations for stewardship
- Top-down pressure: global principles; regulations and codes
- Bottom-up pressure: risk and return evidence; sustainability and positive societal impact; and client/beneficiary investment beliefs
Why integrate ESG and stewardship?
- Reputation
- Risk
- Return
- Wider impact
It provides the industry’s social licence to operate
ESG: more than a feel-good factor?
Research shows:
- Sound ESG standards lower the cost of capital
- Solid ESG practices result in better operational performance
- Stock price performance, credit spreads and real estate is positively influenced by good ESG and CSR practices
What is advocacy?
Actively seeking to influence change in public policy in the interests of investors and the wider society by engaging with policymakers, regulators and industry bodies on a range of issues. These include: the financial system and investment industry, corporate governance, business purpose, climate change, inequality and inclusion.
What are the Sustainable Development Goals (SDGs)?
A blueprint for significantly changing the world – by ending global poverty, safeguarding the planet and aiming for prosperity for all – by 2030.
There are 17 SDGs, and within these goals there are 169 targets and 230 indicators.
Through investing and engagements, we can support the attainment of the SDGs.
What is impact investing?
Purposefully targeting companies which can generate positive social or environmental outcomes in addition to financial gains. Impact investors mainly target investments that are able to provide solutions which make a positive contribution towards the attainment of the 17 SDGs.
Sustained thinking: our ESG knowledge hub
Our knowledge hub brings together the latest insights from our experts and thought leaders on sustainable investing.
The Circular
Keeping you in the sustainability loop
From thought leadership to press features, we capture our recent sustainability-related insights in our quarterly newsletter The Circular.
Our definitions
What do we mean by ESG leaders, active ownership and SDG investing? We provide definitions that we stand by.
