Summary of responses to the PRI reporting and assessment tool 2008

F&C Asset Management

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?103600
Please select currencyBritish pound (GBP)
1a. If 'Other' was selected, please specify the other currency hereNo Answer
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)32
Listed equity (developed market, passive)0
Listed equity (emerging market, active)4
Listed equity (emerging market, passive)0
Fixed income - developed markets49
Fixed income - emerging markets2
Real estate or property5
Private equity0
Hedge fund2
Infrastructure0
Currency0
Commodities0
Cash6
Other (Please specify): 0
5. Please indicate what percentage of your assets are managed internally and what percentage are managed externally (in %):
 
Internal
External
Listed equity (developed market, active)1000
Listed equity (developed market, passive)00
Listed equity (emerging market, active)1000
Listed equity (emerging market, passive)00
Fixed income - developed markets1000
Fixed income - emerging markets1000
Real estate or property1000
Private equity00
Hedge fund1000
Infrastructure00
Currency00
Commodities00
Cash1000
Other (Please specify): 00
6. Please provide the following contact details for your main PRI contact:
URL for webpage outlining the specific services and products your organisation has to assist signatories in fulfilling their commitments to the Principleshttp://www.fandc.com/governance
Principle 1
8. Do you have a statement that makes specific reference to the integration of responsible investment (RI) or environmental, social and governance (ESG) issues within investment decision making and ownership practices?Yes, it is integrated into a broader statement and there is an independent RI/ESG statement
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?2000
10. Has your statement that makes specific reference to the integration of RI or ESG issues been disclosed publicly?Yes
11. Please indicate how this statement that makes specific reference to the integration of RI or ESG issues can be obtained (a URL would be sufficient):Our Responsible Ownership - Policy & Principles for Corporate Governance can be found at: http://www.fundnets.net/Fundnets_uploadfiles/co_gsri_responsible_ownership.pdf
12. For what percentage of your internal assets under management do you integrate RI/ESG issues into your internal investment decision-making processes? (in %)
Listed equity (developed market, active)100
Listed equity (emerging market, active)100
Fixed income - developed markets100
Fixed income - emerging markets100
Real estate or property100
Hedge fund0
Cash0
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Listed equity (developed market, active)To a large extent
Listed equity (emerging market, active)To a large extent
Fixed income - developed marketsTo a large extent
Fixed income - emerging marketsTo a large extent
Real estate or propertyTo a large extent
Hedge fundNot at all
16. What proportion of your assets involve screening out or excluding stocks or sectors based on ethical (rather than long-term financial) criteria? (in %)3
17. Do you have any staff dedicated to RI/ESG issue analysis and/or implementation?
 
Dedicated
Combined full-time equivalents
Investment analyst31
Research analyst00
RI/ESG issue policy advisor80.5
(proxy) Voting specialist00
Engagement specialist170
Portfolio manager62
Other (Please specify): Senior management including Chairman, CEO, CFO, Head of Investments01
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?F&C's Corporate Governance Committee, an Executive Committee chaired by the Head of Investments, signs off all Responsible Investment policies. The Investment Division Management Committee, comprising the 8 heads of the investment divisions, including Governance & Sustainable Investment, is then responsible for implementing the group's overall fund management processes.
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?Yes
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?No Answer
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)100
22. What forms of RI/ESG training or awareness raising have been invested in, encouraged or provided for internal staff (investment and other)?Informal internal training,Formal internal training,Conferences,Regular briefings on key issues,Other (please specify): 'New hire training'
23. Did you support the development of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research in 2007?To a large extent
24. Please indicate how the results of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research development you supported can be obtained if they have been disclosed publicly (a URL would be sufficient):Every year F&C writes, commissions or contributes to research reports, surveys and management guidelines on a wide range of ESG-related subjects that it believes can have an impact on company performance. During 2007, we published 4 detailed studies: "F&C Guide to Carbon Offsetting"; "In the Front Line: The insurance industry's response to climate change"; "Managing Access, Security & Privacy in the Global Digital Economy"; and "Do You Know What Junior is Doing?: Managing ESG risks in independently-managed operations in the mining sector". These reports were supplemented by a wide range of additional research that can be found in full at: http://www.fandc.com/governance - See Publications link.
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Sponsored industry events,Advocated RI/ESG coverage in professional training programs (CFA, MBA, etc.),Spoke at or attended conferences,Had dialogue or exchanges with peers,Instructed at universities or colleges,Other (please specify): 'F&C has participated in bespoke training for trustees, equity analysts and company representatives (including investor relations and senior managers).'
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?Our most significant achievement in 2007 was the development and implementation of F&C's Research Connectivity process. This process promotes communication between Equity, Fixed Income and Governance & Sustainable Investment (GSI) research teams through a single shared research database, a shared calendar, and joint attendance at company meetings. In addition, all GSI analysts are paired with investment counterparts by sector and region to help integrate ESG issues and traditional financial analysis. The process is reflected in all our fund documentation, and aims to ensure that F&C makes the most effective use of its resources for its clients.
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?One of the biggest challenges the asset management industry continues to face in the implementation of Principle 1 is limited demand for ESG incorporation into investment analysis. While this has increased dramatically over the past five years, and has intensified since the launch of the PRI, gaps still remain among some asset owner groups.
28. Please add any overall comments and clarifications related to Principle 1 here.A specific example of ESG-related training for F&C's investment professionals in 2007 was a series of in-depth briefings provided by GSI member Vicki Bakhshi. As senior editor of the Stern Review on the economics of climate change and former Bank of England economist, Vicki offered insight into the links between climate change economics, investment analysis and portfolio management. F&C subsequently launched its Climate Opportunities Fund to develop these themes further.
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a moderate extent
Collaborative engagementTo a large extent
Filing shareholder resolutionsTo a small extent
Co-filing shareholder resolutionsTo a small extent
Other (Please specify): Public policy engagement To a large extent
30. To what extent did you employ the following approaches in your 2007 active ownership strategy for all asset classes other than listed equity?
(Proxy) votingTo a small extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a moderate extent
Collaborative engagementTo a moderate extent
Other (Please specify): Responsible Property Initiatives To a large extent
31. Do you have a (proxy) voting policy?Yes - disclosed publicly
32. To what extent does your (proxy) voting policy direct action on ESG issues? For each issue, please indicate the extent of direction.
EnvironmentalTo a large extent
SocialTo a large extent
GovernanceTo a large extent
33. Does your (proxy) voting policy apply to all voting regions (where possible)?Yes
34. Please indicate how your (proxy) voting policy can be obtained (a URL would be sufficient):F&C's overarching Responsible Ownership Policy can be found at: http://www.fundnets.net/Fundnets_uploadfiles/co_gsri_responsible_ownership.pdf This is supplemented by our Corporate Governance General Guidelines, available at: http://www.fandc.com/FN_FileLibrary/File/CGOG%20-%20General%20-%20FINAL%204889.pdf In addition, we have eleven additional, region-specific corporate governance voting policies, which are sent to all companies in our portfolios ahead of voting season. These guidelines are proprietary to F&C.
35. Do you ensure that voting is done in accordance with your (proxy) voting policy?Yes for all
36. What percentage of total votes cast were against management? (in %)8
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental37
Social29
Governance37
38. Do you conduct (proxy) voting on behalf of your clients?Yes - According to our own policy or client-specific policies
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer2
As co-filer4
Planning to be lead filer in 20082
Planning to be co-filer in 20084
40. How were portfolio companies engaged with in 2007? Please check all that apply.Internal staff engaged portfolio companies directly,Internal staff engaged portfolio companies collaboratively
41. Do you systematically bring RI/ESG issue-related engagement opportunities to your clients?To a large extent
43. How many portfolio companies did you engage directly/were engaged on your behalf on ESG issues in 2007?
 
Extensive engagement
Moderate engagement
Basic engagement
Environmental72922003279
Social48222003279
Governance55822003279
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Activities in conflict zones,Benefits and compensation,Bribery/corruption,Climate change,Distribution of fair trade products,Environment,Governance,HIV/AIDS,Health,Health and safety,Human rights,Labour issues,Nanotechnology / novel technology,Other (please specify): 'Biodiversity~Disclosure & Reporting~Access, Security and Privacy in Telecom, Media and Technology sector~Biofuels~ESG risks in joint-ventures in the mining sector~Access to Medicines~Nutrition & Wellness'
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Client directive,Sector exposure,Risk profile,Focus issue,Ad hoc/reactive,NGO or union campaign,Other (please specify): 'F&C's internal proprietary prioritisation process'
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?To a large extent
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.Governance practices changed,(Written) commitment to improve a particular ESG issue,Improved disclosure,Collaborative work with a company on a specific ESG issue,Other evidence of improvement in investee company RI/ESG performance due to our activities,Shareholder resolutions withdrawn after successful negotiations with portfolio companies,Impact on share price,Other (please specify): 'Internal quarterly progress measurement system ('Milestones')'
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?Our most significant achievement in 2007 was the comprehensiveness and quality of our active ownership approach. In 2007, we exercised voting rights across 100% of our global holdings, representing a total of 34,889 proposals, comprising 34,238 management proposals and 651 shareholder proposals, at 3279 companies in 52 countries. In addition, we wrote over 2,200 letters, explaining our vote wherever we abstained or voted against management. Our one-to-one contact with companies is the core of our engagement work, and in 2007 we raised ESG issues at 762 companies in 37 countries, often at senior management level. For our most engaged companies, the number of contacts was as high as forty times during the year. This engagement resulted in us identifying 224 'milestones'. (instances in which a company improves its policies, procedures or practices following engagement by F&C)
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?One of the biggest challenges to successful active ownership is the time and resources needed to develop and implement effective and credible engagement strategies.
50. Please add any overall comments and clarifications related to Principle 2 here.F&C is strongly committed to measuring engagement success. We measure, and report to clients on, outcomes in three ways: - Voting: we measure the outcome of the voting process as the number of votes submitted and the percentage of Votes Against Management. - Engagement: we record both the number of companies that have been engaged, and the number of times an individual company has been engaged. - Milestones: F&C’s engagement programmes are actively designed to achieve improvements in ESG risk management in the companies engaged. F&C tracks and records each occasion on which a company has changed its policy, performance or practices after engagement by F&C. Each milestone is rated on a scale of A1 to C3, in a process requiring sign-off from F&C’s Head of Investments. The A1 to C3 rating reflects both the Influence of F&C (A-C) and the potential impact on shareholder value (1-3).
Principle 3
51. Have you asked that investee companies (or other investment entities) produce standardized reporting on their RI/ESG issue policies, practices or performance (within annual financial reports or other formats)?To a large extent
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?Integrated with regular financial reports,Standalone corporate social responsibility or sustainability reporting,Global Reporting Initiative (GRI),Carbon Disclosure Project (CDP),Other (please specify): 'See response to Question 58'
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a large extent
54. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues?
AdoptionTo a large extent
AdherenceTo a large extent
55. Which norms, standards, codes of conduct or international initiatives related to RI/ESG issues have you sought information about from companies, with regard to their adoption of/adherence to?UN Global Compact,Ceres Principles,Equator Principles,International Labour Organization standards,OECD guidelines for multinational enterprises,World Economic Forum Principles for Countering Bribery,Universal Declaration of Human Rights,Other (please specify): 'Too numerous to detail in full in the space available for this response'
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?One of our most significant achievements in 2007 from our Disclosure and Reporting engagement programme, related to disclosure on labour standards. After identifying companies facing high labour standards risks, we wrote to them to encourage them to report publicly on their labour standards management systems and performance, including the results of factory audits. Our engagement was based on frameworks such as the UN International Labour Organisation (ILO) core conventions, the GRI and the UN Global Compact. In total, we achieved six 'milestones' in 2007 with a group of Western European, North American and Japanese companies.
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?One of the biggest challenges in 2007 was geographic variance in disclosure frameworks. Engagement in certain parts of the world is made harder by limited voluntary and/or mandatory standards relating to ESG.
58. Please add any overall comments and clarifications related to Principle 3 here.F&C expects high standards of transparency and disclosure from investee companies, including a narrative account within the annual report about the trends and factors affecting the performance and future development of the business. This includes areas that have not been traditionally covered in annual reports, such as material ESG issues. While we recognise that ESG reporting will vary by geography and sector, we have identified and informed companies about 13 steps to best practice ESG reporting. F&C gives regular, detailed feedback to investee companies on their sustainability reporting throughout the year. Our engagement, detailed under our "Disclosure & Reporting" programme also references specific guidance, for example from the Global Reporting Initiative (GRI) and the ABI (Guidelines on Responsible Investment).
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
Investment consultantNot applicable
Proxy votingYes
Engagement overlayNot applicable
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)Yes
Other (Please specify): Media relations - to develop a broader market for RI/ESGYes
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)Yes
Incentive structure (external investments)Not applicable
Contractual relationships with external investment managersNot applicable
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?Yes
62. To what extent do you encourage your service providers to become PRI signatories?To a large extent
63. To what extent do you encourage your clients to become PRI signatories?To a large extent
64. To what extent do you encourage peer organisations to become PRI signatories?To a large extent
65. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers?No Answer
66. Does your broker evaluation process include an ESG component or do you have a budget to pay cash for ESG broker research?Yes
67. Have you revisited any relationships with service providers in light of RI/ESG issue-related capabilities?Yes
68. Have you engaged in dialogue, lobbying or initiatives pertaining to government policy and/or industry regulations (for example, stock exchanges, accounting standards) related to RI/ESG issues in 2007?To a large extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?One of our most significant achievements in 2007 was the lobbying on government policy and industry regulations relating to climate change, led by our CEO Alain Grisay. This included: - Mr. Grisay's membership of the UK and EU Corporate Leaders Groups on Climate Change; his activities this year included a testimony to a Congressional Committee in Washington DC - Membership of Steering Committee of the Institutional Investors Group on Climate Change (IIGCC) - Founder signatory to the ClimateWise Principles, a best-practice standard for the insurance industry response to climate change - Signatory to the Carbon Disclosure Project - Active membership of Investor Network on Climate Risk in US - Encouraging action by governments, though letters and submissions to consultations – for instance a petition to the SEC to require companies to disclose material climate risks - Regularly speaking at conferences and seminars.
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?One of the biggest challenges in 2007 related to how the investment industry chooses to interpret and implement the Principles.
71. Please add any overall comments and clarifications related to Principle 4 here.F&C is a member of a number of groups dedicated to promoting best practice in all areas of governance and sustainable investment, and has contributed to most major reports and codes in this field. As stipulated by our policy, we are committed to publishing details of all groups in which we are involved and that may lobby on behalf of the industry to which we belong. This information can be found at: http://www.fandc.com/new/aboutus/Default.aspx?id=75582
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?Both used and posted to it
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?Yes
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:We find the PRI Engagement Clearinghouse to be a useful tool for collaborative engagement initiatives, and recognise the significant progress it has made over the past year.
75. To what extent do you participate in the following RI/ESG issue-related collaborative engagement initiatives and/or industry associations? For those not listed, please use the "other" field:Carbon Disclosure Project,Council of Institutional Investors (CII),Extractive Industries Transparency Initiative (EITI),Institutional Investors Group on Climate Change (IIGCC),International Corporate Governance Network (ICGN),Investor Network on Climate Risk (INCR),Regional social investment organisation (for example SIF or UKSIF),Social Investment Research Analyst (SIRAN),United Nations Environmental Program Finance Initiative (UNEP FI),Other (please specify): 'Please refer to response to Question 79 for a full list of initiatives that F&C participates in.'
76. Please indicate the three RI/ESG issue-related collaborative engagement initiatives and/or industry associations that you participated in most extensively and indicate how you did so:
Extractive Industries Transparency Initiative (EITI)Role for Investors: investors are signatories to the ‘Investors’ Statement on Transparency in the Extractives Sector’ and have a seat allocated as a key stakeholder on the EITI board. F&C role: F&C drafted the original investor statement, and has played an active role in hosting the statement and adding signatories – now 85 institutions representing $12.3 trillion. F&C also sits on the EITI’s Board as the Investor Representative, and hosts investor meetings to inform the statement’s signatories of progress and allow broader investor views to feed into the EITI process. F&C's Outputs & Achievements: Investor Statement representing $12.3 trillion; establishing the role of investors as a key stakeholder in multi-stakeholder forums; helping secure support of 37 extractive companies for the EITI; overall, contributing to EITI implementation in 15 countries.
Other (please specify)
ClimateWise consists of a group of leading companies and organisations in the insurance industry committed to taking action on climate change and to reporting publicly on their own performance. Role for Investors: investors are able to sign up to the ClimateWise Principles and to engage insurance companies in which they invest to become signatories. F&C role: F&C played a significant role in drafting the Principles, and was one of the original signatories; F&C also wrote the ‘investment case’ for insurance companies’ participation – ‘In the front line: the insurance industry’s response to climate change’; following the launch, F&C has actively engaged insurance companies to sign up to the ClimateWise principles. F&C's Outputs & Achievements: launch conference with 16 ClimateWise signatories; 22 subsequent signatories; publication by F&C of ‘In the front line: the insurance industry’s response to climate change’’; publication of ClimteWise Principles; monitoring process established.
Regional social investment organisation (for example SIF or UKSIF)Role for investors: institutional investors are able to become members of UKSIF and participate in work programmes and other initiatives. F&C role: an F&C Associate Director sits on the UKSIF board; F&C actively participates in all UKSIF work programmes – for example, F&C has hosted two UKSIF events in the past twelve months: a workshop on Labour Standards at Tesco and a workshop on Access to Medicines. F&C also originated and is leading the UKSIF working group on Labour Standards, and as a founding member of UKSIF played a lead role in its 15th Anniversary publication. F&C's Outputs & Achievements: outputs related to direct F&C involvement include two workshops; 15th Anniversary publication; creation of Labour Standards working group.
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?Our most significant achievement in 2007 was the creation of the Pharmaceutical Shareowners Forum (PSF). The objective of the Pharmaceutical Shareowners’ Forum (PSF) is to provide a forum for institutional investors and asset owners to exchange information and ideas on ESG developments in the Pharmaceutical and Healthcare sectors that are relevant to financial performance. Role for Investors: the PSF provides a forum for institutional investors to exchange ideas and develop collaborative initiatives. F&C role: F&C originated the idea of forming the PSF; hosts the website; coordinates the meetings; and acts as one of three Convenors. Outputs & Achievements: creation of the PSF, of which 10 pan-European investors are members; creation of website and programme of meetings; greater awareness among pharmaceutical and healthcare companies that investors are interested in ESG issues and prepared to work collaboratively in engagement.
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?One of the biggest challenges in 2007 was the different levels of investor understanding of ESG issues. In addition, while the PRI Secretariat has helped to alleviate much of the burden associated with collaborative engagement, it remains time- and resource-intensive.
79. Please add any overall comments and clarifications related to Principle 5 here.For a full list of F&C's involvement in collaborative engagement initiatives and industry associations, please see: http://www.fandc.com/new/aboutus/Default.aspx?id=75582
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries and the public
81. Please indicated how this disclosure of how RI/ESG issues are integrated into your investment processes can be obtained (a URL would be sufficient):Our Responsible Ownership - Policies & Principles for Corporate Governance is updated annually and can be found at: http://www.fundnets.net/Fundnets_uploadfiles/co_gsri_responsible_ownership.pdf
82. To what extent do you disclose your annual (proxy) voting record?Disclose votes and guidance explaining votes
83. Please indicated how your (proxy) voting record can be obtained (a URL would be sufficient):F&C publishes monthly voting reports, giving a full record of our votes on individual companies, including comments, on the Publications page of our website at: http://www.fandc.com/new/aboutus/Default.aspx?id=75986 F&C also produces a detailed annual analysis and overview of our voting activity in our Responsible Investment Report, available at: http://www.fandc.com/FN_FileLibrary/file/co_gsi_Responsible_Investment_Report_2007.pdf
84. Do you systematically report (privately and/or publicly) on your RI/ESG issue-related engagement activities, results and progress?To a large extent
85. Please indicate how your reporting on RI/ESG issue-related engagement activities, results and progress can be obtained (if it is publicly available, a URL would be sufficient):F&C produces its “Governance and Sustainable Investment Bulletin” emails for clients and IFAs around 10 times a year, highlighting key developments in its engagement work. F&C produces quarterly Public reports on its engagement programme, reo®, which include focused research pieces on a range of engagement areas. These can be found at: http://www.fandc.com/new/aboutus/Default.aspx?id=63889 F&C also produces a more detailed Confidential version of the public engagement report, again on a quarterly basis, for its clients, giving more information on engagement with individual companies. Finally, F&C produces an annual Responsible Investment Report, which can be found at: http://www.fandc.com/FN_FileLibrary/file/co_gsi_Responsible_Investment_Report_2007.pdf
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?To a large extent
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.No Answer
90. Have you sought to determine what impact your overall RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behavior or performance?To a large extent
91. Have you sought to determine what impact your RI/ESG issue-related approach has had on the performance of your portfolio?To a large extent
92. Have you sought to determine what impact your RI/ESG issue-related efforts, requests and guidance have had on the consideration of RI/ESG issues by your external service providers excluding external investment managers (for example: research providers, consultants, etc.)?To a large extent
93. Do you report on progress and/or achievements relating to the PRI or RI, and how would you like to publish your response to this assessment?Please automatically publish our responses to the reporting and assessment tool in full on the PRI website,We publicly reported on our PRI or RI achievements in 2007 (outside of publishing part or all of this assessment)
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?Our most significant achievement in 2007 was the publication of our Responsible Investment Report. The in-depth, 43-page report provides a comprehensive overview of our approach to active ownership. It reveals both our voting record at shareholder meetings during 2007, and provides a detailed review of flashpoints during the year, developments in local governance codes, and an assessment of the key debates likely to flare up during 2008. It also is one of the ways in which we report on our compliance with the PRI.
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?One of the biggest challenges in 2007 was the increasing blurring between ESG information and commercially-sensitive data, both from companies and also from asset managers.
96. Please add any overall comments and clarifications related to Principle 6 here.Further information on our reporting can be found at: http://www.fandc.com/new/aboutus/Default.aspx?id=75575
Emerging Markets
97. To what extent have you actively thought about how to integrate RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments?To a large extent
98. Please describe your activities with regards to integrating RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments.F&C undertakes the following activities to integrate ESG issues into investment decision making: - joint company meetings with Fund Managers; - consultation on market developments including sustainability themes, such as the impact of climate change; - voting of all global holdings; - eleven country-specific corporate governance guidelines, informing our voting policies across emerging markets; - highlighting material ESG risks and opportunities on specific stocks.
99. To what extent do you believe the integration of ESG issues in emerging markets is as relevant as the integration of ESG issues in other markets?To the same extent
100. To what extent did you employ the following approaches in your 2007 active ownership strategy in emerging markets?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a small extent
Collaborative engagementTo a moderate extent
Filing shareholder resolutionsNot at all
Co-filing shareholder resolutionsNot at all
Other (Please specify): Public policy To a large extent
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?To a large extent
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.Corporate governance, including board composition and structure, capital policy and remuneration.
2.Anti-bribery and corruption measures, including internal complaints mechanisms (whistleblowing), code of ethics, political donations and lobbying.
3.Disclosure & reporting on ESG issues and the links to company strategy and performance.
103. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues in emerging markets?
AdoptionTo a large extent
AdherenceTo a large extent
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?Not at all
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?Not at all
106. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers investing in emerging markets?Not at all
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?To a moderate extent
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?To a large extent
109. Have you sought to determine what impact your RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behaviour or performance in emerging markets?To a large extent
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.F&C's responsible investment approach is global, and therefore includes coverage of the emerging markets. In 2007, we achieved the following: - 667 companies engaged on country-specific ESG issues; - 489 emerging markets companies engaged via a customised letter to explain our voting decisions and raise additional ESG issues; - 72 emerging market companies engaged in detail on specific ESG risks.
111. What is your top PRI-related goal/priority for emerging markets in 2008?Our top PRI-related goal for emerging markets for 2008 is the active engagement of key companies to promote best practice where this will improve company performance and increase the number of 'milestones' that we are able to achieve. We aim to do this through: - F&C engagement programmes; - F&C bespoke engagement programmes for clients; - collaborative engagement initiatives, such as the Investor Statement on Sustainability Reporting in Emerging Markets.
Closing Comments
112. Why did your organisation join the PRI?F&C’s motivation for joining the PRI is best summarized by our Head of Investments, Fernando de Figueiredo Ribeiro, who led our decision to endorse: "We welcome the UN's initiative to engage the global financial services industry and believe that the Principles bring into focus what it really means to be a shareowner. We, as fund managers, are agents for our clients and have long promoted a responsible approach to investment. We are convinced that with more widespread acceptance of these Principles, the investment industry is poised for significant transformation going forward."
113. Please describe the benefits you have enjoyed as a result of signing the PRI:We have welcomed the ways in which the PRI has helped to promote awareness of the importance of ESG issues across the global investment industry. We have benefited from PRI Secretariat's role in facilitating collaborative engagement initiatives.
114. To what extent do you believe the PRI has succeeded in changing investor behaviour and/or raising awareness or capacity on RI/ESG issues? Do you have any examples you could share?Two years after the launch of the PRI, we believe that the PRI continues to raise awareness of RI/ESG issues. However, we continue to believe that the aspirations of the Principles need to be backed up by real, practical action in order for them to be effective. To date, some of the clearest indications of changing behaviour relate to: - Greater interest from asset owners as to how investment managers are implementing the PRI (e.g. through specific references in product/service RFPs) - More comprehensive coverage of ESG issues by the sell-side broker community.
115. What are the top three activities the PRI Secretariat could undertake to enhance and encourage further implementation of the PRI by current and prospective signatories?
1.Continuing its efforts to involve the global investment industry so that the PRI has widespread international support and becomes a de facto standard.
2.Developing training for fund trustees about the Principles and ESG analysis.
3.Encouraging regulators to include a reference to PRI implementation in pension fund disclosure requirements.
116. What are your top three PRI-related goals/priorities for 2008?
1.Continuing to strengthen our PRI implementation across all asset classes.
2.Sharing PRI implementation best practice across the global investment industry.
3.Participating in collaborative engagement initiatives to promote ESG/RI issues in emerging markets.
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 1
2Principle 2
3Principle 6
4Principle 3
5Principle 5
Least difficult
6
Principle 4