Schroders

In terms of its approach towards impact management, Schroders acknowledges that its financing activities have both positive and negative impacts. It links the remuneration of its executive team to sustainability performance criteria. Further, it publicly commits to gender equality and women’s empowerment and has a gender-balanced board of directors where 50% of the members are women. The financial institution has an engagement policy where it describes its approach on sustainability themes and impact topics with investees, including a clear framework with success criteria and escalation points in the event that engagement with investees is unsuccessful. Schroders also publishes a sustainable investment report that provides an overview of its engagement activities.

Schroders is a founding member of the Net Zero Asset Managers Initiative and has set a target of net-zero financed emissions by 2050. It discloses the key sectors and companies it has identified as priorities to engage with on climate change, including that it requires its investees to have a strategy aligned with the Paris Agreement. The asset manager is also a member of Climate Action 100+. Schroders discloses the aggregate amount of investments it devotes to climate solutions and specifies what these solutions are. It discloses absolute financed emissions and the underlying data quality and coverage. Additionally, Schroders discloses a target to minimise its negative impacts on nature and biodiversity such as eliminating agricultural deforestation risks by 2025. It also engages with investees on the topic of nature- and biodiversity-related impacts.

Schroders has a publicly available policy statement committing it to respect human rights and the ILO core labour rights. It provides case studies describing how it has acted on salient human rights risk issues and discloses categories of stakeholders whose human rights have been or may be affected by its activities. It also has a grievance mechanism accessible to all workers, external individuals and communities to raise human rights complaints or concerns. The asset manager discloses the proportion of women in its total direct operations workforce for each employee category. Schroders has a publicly available policy statement which shows it is committed to respecting the health and safety of workers and discloses a global tax strategy.

In terms of its approach to senior leadership accountability, Schroders could assign responsibility for sustainability to the group’s board and link the remuneration of its management team to sustainability performance criteria. The asset manager also has an opportunity to reach at least 40% female representation in senior leadership positions. While it discloses the median and mean gender pay gap in the UK and globally, Schroders has an opportunity to disclose the same numbers for each employee category. It could also publish case studies describing where it has engaged unsuccessfully with investees on sustainability themes and impact topics.

Schroders could disclose interim emissions reduction targets across its assets under management, such as a 45% reduction in financed emissions by 2030. It could align its climate solutions with internationally recognised frameworks and disclose time-bound targets explicitly for its climate solutions. No evidence was found regarding Schroders’ approach to fossil fuels that spans across the fossil fuel value chain and its AUM, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects.

Schroders has an opportunity to describe a comprehensive process for identifying its human rights risks and impacts across all its AUM. It could disclose the proportion of its total direct operations workforce for each employee category by age group. To provide transparency on financial inclusivity, Schroders has an opportunity to disclose the amount of investments directed towards low-income developing countries.