IN FOCUS6-8 min read

Sustainable Investment Report 2022: “our teams are not afraid to ask the difficult questions necessary”

In a foreword to our annual Sustainable Investment Report, Peter Harrison – Schroders Group Chief Executive – explains the importance of an active approach to helping clients reach their goals.

03/04/2023
Spring frost crocus

Authors

Sustainable Investment Team

A message from Schroders' Group Chief Executive Peter Harrison:

"Views on sustainability will differ, but our teams are not afraid to ask the difficult questions necessary to help our clients reach their goals."

Against a backdrop of rising inflation rates, the Ukraine war and some anti-ESG rhetoric, our investment specialists have been tackling difficult sustainability issues with thousands of companies across 73 countries over the past year.

A continued commitment to active ownership as a sustainable investment strategy is at the heart of this. We recognise the wisdom of having those closest to the holdings – fund managers and analysts – leading on engagement. This is happening: one fifth of sustainability-focused engagements with holdings were investor-led in 2022. That’s 1,112 of 5,300 in total that were driven by investment desks – up from 345 in 2021, an increase of 222%.

The numbers also illustrate the importance of the sustainable investment team – around 50 ESG and impact specialists – to a much bigger company-wide effort. This team also provides the connectivity across investment desks. It works closely with fund managers to analyse global risks and opportunities, to use our influence to encourage companies to change and to help channel capital into innovative new solutions around the world.

It’s not a siloed team, and the culture across our business is one of constant curiosity.

Since publishing our first Engagement Blueprint, which lays out our priorities and expectations of companies across six thematic areas, in early 2022, we have continued to make progress on a number of fronts.

The climate crisis epitomises why investor questioning is so important and finding answers is not easy.  

One year into Russia’s invasion of Ukraine, which has disrupted the global supply of energy, power cuts have been avoided in Europe so far.

But the energy crisis is not over, and the International Energy Agency’s Coal Market Report shows some nations, such as India and Indonesia, have resorted to burning more coal.

Meanwhile Bangladesh, Pakistan and Sri Lanka have faced power outages due to fuel shortages in the past 12 months.

Here in the UK it has been reported old coal-fired power plants started generating again amid a cold snap.

Whether through new insights, influence or innovation, against this challenging backdrop it is more important than ever to invest in finding answers to the complex problem of climate change.

And it is not just about finding ways of transitioning to net zero and tackling the growing threat, it is – importantly – a question of maximising the potential benefits for investors.

Sustainable Investment Report 2022

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

 

Authors

Sustainable Investment Team

Topics

Active Ownership
Net Zero
ESG
Governance
Social
Environmental
Sustainability
Global

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.