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Separate Account Managers in Sustainable and Responsible Investing

Strategy Profile:
Rockefeller Global Sustainability and Impact Equity Strategy Download as PDF for Printing PDF Download

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About This Strategy - [Return to Top]

Assets Under Management (AUM): $933M (in US$ millions)

Required Minimum: Lower retail minimums available through the sub-advised Touchstone Sustainability & Impact Equity Fund (TROCX). $25 million minimum for separately managed account.

Benchmark used: MSCI All Country World

Strategy type: International/Global

Strategy description: The Global S&I Equity Strategy seeks to provide strong global equity returns as measured against the MSCI ACWI benchmark and to have an impact on and support sustainable companies. We seek companies that are becoming part of the solution rather than the problem, but we do not seek perfection; rather, we look for and encourage progress. We believe that many of the social, environmental and governance issues are now business issues for companies, and therefore, good citizenship is good business. To that end, we follow closely the big issues that affect the intersection of business and society to understand the context in which companies operate. Our company specific analysis focuses on the potential social, environmental and governance impact or risk of a company and its leadership. We examine how well a company manages these impacts and positions itself to mitigate them and to take a leadership position in solving those issues. As long-term investors, we seek to capitalize on inefficiencies that result from distortions in valuations across sectors or regions. Often these distortions occur because investors are too short-term focused or because of geographic biases. We are committed to thinking long-term and not trading around quarterly results. This has served us well historically and we believe will continue to do so in the future. We believe our competitive advantage and edge is derived from Rockefeller Asset Management (RAM)’s independence and longer term ownership structure that supports a culture of intense collaboration and long-term investment horizon. This enables our analysts to promote non consensus ideas that we expect to perform over a 3-5 year horizon. To minimize geographic biases, we emphasize collaboration and do not work in silos. Global research is in our roots and is reflected in the multi-national background of the analyst team, with more than 13 major languages spoken. What sets RAM’s environmental, social and corporate governance (“ESG”) approach apart from many others is that we focus our assessment on the materiality of the sustainability issues associated with an individual company’s business model and the intrinsic risks that may arise from that business model. Research is conducted in-house using our information resources as well as those of external providers. Because we use a quantitative rating system, we assemble a database of best practices in all areas of our six assessment criteria. Our approach recognizes that best practices are always evolving and vary by industry and other factors.

Strategy web link: External Link

 

About The Company - [Return to Top]

Institution Name:
Rockefeller & Co. Inc.

Approach to Sustainable & Responsible Investment: Rockefeller & Co. is a global asset management and investment advisory firm that provides investment management services and wealth advice to institutions, foundations and endowments, non-profits, ultra-high net worth individuals, trusts and families. Rockefeller Asset Management (“RAM”), a division of Rockefeller & Co. and the “Firm” for purposes of the Global Investment Performance Standards (“GIPS®”), offers internally-managed U.S., global, non-U.S., sector specific and sustainability and impact investment equity strategies; as well as multi-asset class strategies. Rockefeller & Co.’s history dates back to 1882, when John D. Rockefeller established a New York office to manage the Rockefeller family’s personal and philanthropic interests. Rockefeller & Co. was incorporated in 1979 as part of its evolution from a single-family office to a fully integrated asset management firm and in 1980 registered with the SEC as an investment adviser under the Advisers Act. The Global S&I Equity Strategy seeks to provide strong global equity returns as measured against the MSCI ACWI benchmark and to have an impact on and support sustainable companies. We seek companies that are becoming part of the solution rather than the problem, but we do not seek perfection; rather, we look for and encourage progress. We believe that many of the social, environmental and governance issues are now business issues for companies, and therefore, good citizenship is good business. To that end, we follow closely the big issues that affect the intersection of business and society to understand the context in which companies operate. Our company specific analysis focuses on the potential social, environmental and governance impact or risk of a company and its leadership. We examine how well a company manages these impacts and positions itself to mitigate them and to take a leadership position in solving those issues. As long-term investors, we seek to capitalize on inefficiencies that result from distortions in valuations across sectors or regions. Often these distortions occur because investors are too short-term focused or because of geographic biases. We are committed to thinking long-term and not trading around quarterly results.

Total AUM in SRI: $955,971,921M (in US$ millions)

Research conducted: Internally

Researcher name: Sustainability & Impact Team

Contact info:
10 Rockefeller Plaza, 3rd Floor
New York, NY 10020
USA
Phone: 212-549-5314
Email: ncraig@rockco.com
Web: http://www.rockco.com/ (Opens in a new window)

 

Specific Screening Information by Category - [Return to Top]

Environment

  • Other Environmental: Combination of Positive and Restricted/Exclusionary Strategies - We avoid investing in the most energy intensive emitters - the coal and oil sands companies and most of the large integrated companies - as well as energy companies and utilities with poor environmental performance records that have not been amenable to constructive dialogue. We use our investor voice with selective fossil fuel companies to encourage industry leadership and improved practices in critical areas, recognizing that, until viable alternatives are created, oil and natural gas will continue to be used. In addition to excluding the most emissions-intensive fossil fuel companies and those that are resistant to constructive dialogue, we encourage aggressive carbon management and other solutions for addressing climate change from non-fossil-fuel companies. This particularly entails technology companies because their inventiveness has resulted in an increased demand for energy among society, primarily through their data centers and through widespread penetration of wireless mobile devices requiring electricity to recharge. These companies have a role to play, not only in reducing their own carbon footprint and that of their customers, but also by increasing pressure on their suppliers to provide smarter, more energy efficient, renewable solutions.

Social

  • Human Rights: Combination of Positive and Restricted/Exclusionary Strategies - Under our Human Rights pillar, we focus on the implementation of the new United Nations’ Framework on Business and Human Rights as well as the United Nations Declaration on the Rights of Indigenous Peoples.
  • Labor Relations: Combination of Positive and Restricted/Exclusionary Strategies - Under our Workplace pillar, we assess companies’ diversity practices and gender parity, health and safety management, employee wellness, benefits and incentives, education, training and advancement, women’s leadership development, supply chain management, and workforce engagement.
  • Sudan: Restricted/Exclusionary Investment - We make no investments in companies with business in the Republic of Sudan.

Governance

  • Board Issues: Combination of Positive and Restricted/Exclusionary Strategies - Under our Governance pillar, we focus on topics such as board composition and diversity, quality of management, responsibility and accountability, executive compensation linked to performance, and board and management communication with shareholders/stakeholder engagement.
  • Executive Pay: Combination of Positive and Restricted/Exclusionary Strategies

Products

  • Alcohol: Restricted/Exclusionary Investment - We have an informed exclusion on alcohol. For example, we will analyze how a company protects from marketing alcohol to vulnerable populations.
  • Animal Welfare: Combination of Positive and Restricted/Exclusionary Strategies - We have an informed exclusion on animal rights. We will analyze a company's practices and ensure that animal testing is done only when absolutely necessary (legally required) and then only under the most human circumstances.
  • Defense/Weapons: Restricted/Exclusionary Investment - We exclude companies that derive more than 2% of their revenue from weapons.
  • Gambling: Restricted/Exclusionary Investment - We exclude companies that derive more than 2% of their revenue from gambling.
  • Tobacco: Restricted/Exclusionary Investment - We exclude companies that derive more than 2% of their revenue from tobacco.

Other

  • Other/Qualitative: We are a believer in engaging for change; therefore we generally seek to engage companies held in our S&I strategies. We seek to identify objectives for all of our engagements, even if the objective is to support the company in its current path. However, most of our engagements have at least one issue where we seek improvement by the company. Given the nature of the dialogues, we tend to focus on process. We see our engagements as a series of feedback loops and consider success when we have helped to establish a system which allows for further accountability from the company. We are realistic in our short term goals and set up different levels of measurements, where establishing an effective dialogue is the first set of measures and a functioning feedback loop with accountability over time is a second level. The most difficult engagements (achieving significant changes) typically take years to be successful, so we generally measure success by progress and continuity of dialogue. Companies where we believe significant changes are needed and where we see little chance of meaningful dialogue are usually not included in our S&I strategies. It is important to emphasize that direct dialogue with companies is not our only engagement tool for seeking transformative change. We are big believers in “system change” and to that end, we participate in a number of initiatives which we believe can facilitate change across companies and industries. We seek to identify engagements based on the relevance and materiality of the ESG issues to companies and sectors, and whether they align with our investment philosophy and values. We undertake engagements with the intention of generating positive ESG impact on investee companies. We have a policy that guides our engagement strategy. We have adopted an action plan that directs our engagement process, goals and targets, and allows us to track progress over time.
  • Shareholder Engagement - Shareholder Resolutions: Filed or co-filed with companies on environmental, social or governance issues
  • Shareholder Engagement - Private Dialogue: Conducted with companies on environmental, social or governance issues
  • Proxy Voting: Actively voted by my institution for this investment strategy in support of environmental, social or governance issues in accordance with formal guidelines

 

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