Hermes Investment Management
We are an asset manager with a difference. We believe that, while our primary purpose is helping beneficiaries retire better by providing world class active investment management and stewardship services, our role goes further. We believe we have a duty to deliver holistic returns – outcomes for our clients that go far beyond the financial and consider the impact our decisions have on society, the environment and the wider world. Our goal is to help people invest better, retire better and create a better society for all.
At Hermes, we are cognisant of our commitment to clients to deliver superior risk-adjusted investment returns within the terms of our mandate. We also understand, however, that the way we achieve our investment objectives will have an impact that is more than purely financial and will have wider societal impacts. As such, we seek to provide both for a better financial future for our ultimate stakeholders, as well as for a better, more sustainable, society.
We achieve this through a holistic approach to investing that incorporates environmental, social and governance (ESG) considerations as well as stewardship information into all of our investment products. Our ability to mitigate ESG risks and capture investment opportunities arising from these considerations is essential to achieving consistent investment outperformance for our clients. It is no longer a case of why managers should include ESG considerations into their approach, but why they do not.
We developed our in-house, proprietary ESG tools: the ESG Dashboard and ESG Portfolio Monitor. In addition to the analysis produced by Hermes EOS, the Hermes ESG Dashboard summarises data produced from dedicated ESG providers such as Trucost, MSCI, and Sustainalytics.
Our proprietary ESG Dashboard was originally developed in 2010 to provide Hermes’ investment teams with a quantitative measure of ESG risk. The ESG Dashboard quantifies a company’s ESG profile across a broad range of metrics, producing an overall ranking: the QESG Score. This score is used to systematically direct the capability towards companies with an attractive ESG profile. Indeed, the QESG Score, and the Dashboard as a whole, was developed to reflect our ESG assessment philosophy. The proprietary score also acts as an early indicator of changing ESG risks, thereby alerting analysts and portfolio managers to potential issues and opportunities.
As ESG integration continues to evolve as an investment concept, so too must our thinking. Inherently, the Dashboard is a tool subject to ongoing improvements – never complete, as we always seek to improve it.
Our approach to holistic returns means we are committed to delivering excellent long-term investment performance and stewardship, while improving the lives of many.