BOSTON and LONDON, April 28,
2022 /PRNewswire/ - Manulife Investment Management
recently announced the release of its second annual
stewardship report. The report details the firm's continued
commitment to effective stewardship practices and provides enhanced
disclosure regarding those activities, including its collaboration
and application of stewardship across public and private markets.
In addition, the report discusses three key aspects of the firm's
approach to asset ownership and management to achieve more
sustainable outcomes for clients and stakeholders.
The three aspects of its stewardship practices that the firm
sees as prerequisite to sustainable investment outcomes are as
follows:
Asset stewardship and the evolving role of global
capital—There's a fundamental shift in expectations of both
investors and corporations from being passive participants in the
global economy to being active players expected to play a material
role in change for the benefit of the wider society. With this
shift comes responsibility for asset managers who are assessing
and, at times, directly influencing the design and execution of
corporate and sovereign plans for mitigating environmental, social,
and governance (ESG) risks and capturing potential
opportunities.
The power of international collective action—Identifying
the financial impact of ESG issues is crucial to drawing a
collective consensus toward action. Manulife Investment Management
has seen firsthand through work with groups such as Climate Action
100+ that collective action is helping investors become more
effective and sophisticated in what they require of investee
companies.
Regional differences matter for stewardship —Truly
effective systemic risk mitigation requires a multipronged approach
across asset classes, as well as sensitivity to regional political
and cultural differences. One way Manulife Investment Management
seeks to address systemic risks is by working with systemically
important companies. For example, recognizing that more than half
of the world's greenhouse gas (GHG) emissions come from
Asia, the firm endeavors to engage
with the region's energy and heavy industry companies. Even without
holdings, if engaging with these influential companies can help
move the dial on reducing systemic climate risks, then all of the
firm's client portfolios may stand to benefit globally.
"Active ownership is a central component of our investment and
ESG integration processes. And through our stewardship activities,
we practice sustainable asset management to preserve and unlock
value within our portfolios," said Paul Lorentz, president and
CEO, Manulife Investment Management. "As an active investment
manager, we see facilitating the aggregate corporate shift from
stating the material facts to performing the material actions of
sustainability as one of the more critical tasks of stewardship in
the present decade and imperative to the pursuit of sustainable
investment value."
Collaboration is
essential
Collaborative initiatives, in which the firm partners with
others to magnify its ability to influence outcomes, is a valuable
aspect of Manulife Investment Management's stewardship activities.
Notable collaborative activities in 2021 included:
- Participation in the working group that became the Taskforce on
Nature-related Financial Disclosures
- Serving as a founding member of Climate Engagement Canada as a
result of the success of Climate Action 100+, which Manulife
Investment Management co-founded in 2017
- Becoming a signatory to the Finance for Biodiversity Pledge, in
alignment with the viewpoint that the degradation of biodiversity
is a significant risk
- Continued collaboration through Phase II of the United Nations
Environment Program Finance Initiative, aimed at developing new
climate risk assessment methodologies and researching
sector-specific climate risks and opportunities
Peter Mennie, global head of ESG
research and integration, public markets, Manulife Investment
Management, said, "As sustainable investors, we're at a unique
nexus within the financial system, allowing us the opportunity to
engage with corporations as well as regulators and society at
large, to encourage and promote action to address the crucial
issues that face us all."
Stewardship application across
asset classes
Alongside its collaborative activity, Manulife Investment
Management engaged with more than 1,300 parties in 2021, including
over 800 issuers and 126 influencers, regulators, nongovernmental
organizations, governments, and vendors. Importantly, Manulife
Investment Management shifted focus from the number of
conversations to an emphasis on measuring the impact of efforts to
mitigate material sustainability risks. There was a strong
focus on environmental factors in the firm's 2021 public
markets engagements, with GHG emissions discussed in 20% of
meetings and energy management on the agenda in 16% of
meetings.
In 2021, these engagement efforts resulted in progress toward,
among other matters, more net-zero commitments from issuers; better
diversity, equity, and inclusion reporting; and collaboration with
industry peers on advancing gender diversity issues.
Within private markets, Manulife Investment Management directly
operates timberland, real estate, and agricultural assets where
sustainability is woven into operational strategies and execution
to raise the bar of sustainable investing. Within private equity,
credit, and infrastructure, deep relationships enhance the firm's
influence over key assets and portfolio companies.
In 2021, notable actions across private markets included:
- The launch of the inaugural climate disclosure report on
timberland and agriculture, detailing the approach to
climate-related governance, strategy, risk management, and metrics
and targets
- An assessment across the global real estate portfolio that
resulted in the implementation of a new building standard
requirement to address climate risk and resilience
- Adoptions of sustainable investing frameworks to support the
firm's approach to sustainable investing for both its
infrastructure and private equity and credit businesses
Brian J. Kernohan, chief
sustainability officer, private markets, Manulife Investment
Management, stated, "In our private markets portfolios, we invest
in timberland, real estate, and agricultural assets that we
simultaneously operate, which uniquely positions us to influence
sustainable business practices. Within private equity, private
credit, and infrastructure, deep relationships enhance our
influence over key assets and portfolio companies enabling us to
continuously engage with co-investors, investee companies, and
business partners to encourage sustainable investing best practices
while monitoring the ESG-related data available to help ensure the
efficacy of this approach."
"Looking ahead, our focus will continue to be on outcomes-based
engagements and setting ambitious goals to ensure our approach to
stewardship is built on the tangible progress we've made to date,"
Mr. Lorentz concluded. "We recognize we can often magnify our voice
by partnering with others and bringing our global
perspective to help maximize impact."
About Manulife Investment Management
Manulife Investment Management is the global brand for the global
wealth and asset management segment of Manulife Financial
Corporation. We draw on more than a century of financial
stewardship and the full resources of our parent company to serve
individuals, institutions, and retirement plan members worldwide.
Headquartered in Toronto, our
leading capabilities in public and private markets are strengthened
by an investment footprint that spans 19 geographies. We complement
these capabilities by providing access to a network of unaffiliated
asset managers from around the world. We're committed to investing
responsibly across our businesses. We develop innovative global
frameworks for sustainable investing, collaboratively engage with
companies in our securities portfolios, and maintain a high
standard of stewardship where we own and operate assets, and we
believe in supporting financial well-being through our workplace
retirement plans. Today, plan sponsors around the world rely on our
retirement plan administration and investment expertise to help
their employees plan for, save for, and live a better retirement.
Not all offerings are available in all jurisdictions. For
additional information, please visit manulifeim.com.
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SOURCE Manulife Investment Management