Hymans Robertson Responsible Investment Our policy on Responsible Investment Hymans Robertson is committed to providing independent advice to help our clients achieve better outcomes. This document sets out our approach to the consideration of Responsible Investment (RI) issues in the development and delivery of our advice. This policy will be reviewed annually. Definition of Responsible Investment We recognise that language is one of the critical barriers to the effective consideration of RI by investors and believe it helpful to maintain a consistent definition of RI in our dialogue, both internally and with our clients, to ensure that there is a focus on financial outcomes. In this regard, we consider RI to have two dimensions: Sustainable investment: Investors should recognise the potential financial impact of Environmental, Social and Governance (ESG) factors in investment decision making; Effective Stewardship: Investors should act as responsible and active owners, through considered voting of shares, and engagement with company management when required. Beliefs One feature of a successful investment strategy is the set of investment beliefs around which decisions are made. Beliefs matter as much to those formulating and delivering advice as they do to those to whom advice is being delivered. We have therefore developed and agreed our own RI beliefs which are set out below: ESG factors affect different asset classes to varying degrees, but should be considered as part of an integrated approach to investment decision making, rather than an issue in their own right. ESG factors will impact financial risks over different timeframes with varying levels of materiality. Hence, the extent to which such factors should be taken into account by investors depends on both the timeframe of the investor and the expected impact. Investments which demonstrate strong positive ESG characteristics are expected to increase the likelihood of more predictable/sustainable returns. In the majority of cases, implementation of a responsible investment policy can most effectively be delegated to investment managers, subject to the compliance of managers with policies being regularly monitored and challenged. Research and product ratings Although we believe responsible investment should be considered as part of an integrated approach to investment decision making, we also believe it works best when embedded within the culture of a firm. We therefore maintain separate RI ratings for investment managers distinct from our ratings for products. Our approach explicitly considers how RI matters are addressed and integrated within investment managers decision making. We do not make a judgement on the composition of portfolios unless the terms of the mandate dictate otherwise. Rather, we seek to understand how managers evaluate and understand the risks and opportunities that are posed by individual investments within the context of managers’ own policies, and how these are captured in portfolios. We assess managers across four key criteria as follows: Culture: is there evidence that effective consideration of RI is driven from the top-down; Integration: can the firm demonstrate that material ESG issues are an fundamental consideration in investment decision making; Stewardship: can the firm demonstrate the effective exercise of the rights and responsibilities associated with the assets under management to the extent they have discretion to do so; and Transparency: does the firm clearly communicate its RI activities to relevant stakeholders. Our preference is for processes to be evidence based and we place greater weight on managers who are clearly able to demonstrate the application of their approach across all criteria. Governance Development of our approach to RI and client support is led by Simon Jones, Head of Responsible Investment. Three other groups support this: Our cross-segment RI Policy Group, chaired by the Head of Responsible Investment, seeks to identify differing demands across our various clients and ensure consistency in messaging. The Research Oversight Group, chaired by our Chief Investment Officer, provides oversight and sign-off to the development of policy and methodology. The Client Services Group, chaired by the Head of Investment Consulting, provides input on client investment priorities including RI activity. Training/Education We believe that, where possible, advice to clients should be delivered by client consultants and it is therefore necessary to ensure that our consultants have sufficient knowledge to deliver advice. We therefore provide RI training to the Investment Practice as follows: We run quarterly training sessions led by the RI team, focused on topical issues and issues raised by client consultants. We also invite external speakers into the firm to provide alternative input on topics of interest. RI is a compulsory topic within the induction plan for all new joiners to the firm and is an element of our graduate training programme. RI issues, including case studies, are also raised on an ad hoc basis during fortnightly investment consultant briefings. The RI team contribute topical issues to our internal research blog. Disclosure Hymans Robertson is a Service Provider signatory to the Principles of Responsible Investment and a supporter of the 2017 AMNT/UKSIF initiative. We report annually to the PRI having done so since 2017 when reporting for Service Providers was piloted. We also report as requested to the AMNT in support of our commitment. Reviewed: January 2021 Why not explore? 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