Pendal launches inaugural Responsible Investment and Stewardship report
Pendal has today launched our first Responsible Investment and Stewardship Annual Report for Australia. Here Pendal Australia’s chief executive Richard Brandweiner (pictured) explains what it means
I AM pleased to introduce our inaugural Responsible Investment and Stewardship Annual Report for 2020.
This is a new initiative to summarise the responsible investment practices — including environmental, social and governance (ESG) integration and stewardship activities — we undertake on behalf of our clients.
As an active investment manager, we are truly stewards of our clients’ capital. We believe we have a role and responsibility to deliver sustainable returns for them, as well as influence sustainability practices more broadly.
We do this as part of our fiduciary duty to clients, but also in recognition of our position as one of the largest allocators of capital in the Australian ecosystem.
This means we need to influence positive change by taking a constructive and forward-looking approach to supporting companies improve their ESG credentials.
Long-term value creation
As society evolves and consumers and regulators increasingly look towards organisations to be mindful of their social licence to operate, we believe attention to ESG factors leads to better informed investment decisions and can improve the quality and consistency of long-term value creation.
We are proud to work with many clients who have additional ethical and sustainability-related objectives, in addition to generating returns. For these reasons, we integrate financially material ESG factors across all Pendal funds, as well as offer dedicated investment solutions to meet our clients’ additional priorities.
At Pendal we have a multi-boutique structure, with four distinct investment teams: Australian Equities, Global Equities, Multi-Asset Strategies and Bond, Income & Defensive Strategies.
Each boutique integrates ESG and undertakes stewardship in a way that makes sense for their respective strategies and asset classes.
In other words, we don’t have a single way of investing responsibly at Pendal, although our dedicated Responsible Investments team does bring a common thread across the firm by supporting all boutiques and helping to define quality.
Regnan: Sustainable and impact investing
As many of you will be aware, in early 2019 we assumed full ownership of Regnan, bringing the team in-house to be Pendal Group’s specialist sustainable and impact investing business unit.
Regnan’s experienced team of experts have been a great addition, supporting our engagement and research activities and the continued development of our investment products.
Excitingly, 2020 saw Regnan’s capabilities expand to investment management.
Pendal Group secured a specialist global impact investment team to join the Regnan ecosystem and we launched two products under the Regnan brand.
We look forward to the expansion of the Regnan business, further enabling the purposeful allocation of capital.
Learning and growth
While 2020 in many ways went down as a year most would rather forget, for Pendal it was also a year of learning and growth.
It was a year of paradoxes: a reminder that not every situation is an “either/or”, and not every decision can be bound by the immediate environment or issues at hand.
The year saw, for example, corporate management held to account for more than just the maximisation of short-term shareholder profit in ways we have not seen before.
As we turn our attention to the future and “building back better”, we expect the topics of climate change and inequality will gain importance in the year ahead — and beyond.
The COVID-19 pandemic laid bare many underlying inequalities in societies around the world. Women, elderly and vulnerable communities were disproportionately represented in the hardest hit sectors of the economy.
Encouragingly we are seeing investor action already and we share in this report some of the ways we are working with our clients and investee companies to address this rising inequality.
Tranformation through collective action
The pandemic has also shown us that collective action can drive transformative policies and deliver break-through technologies that seemed unthinkable before the crisis.
Through our engagements and advocacy efforts we will seek to ensure the advances witnessed in 2020 continue.
How else can we ensure that our health, political and economic systems can be resilient in the face of a pandemic, or other form of crisis in the future?
We are thrilled with some of the things we achieved in responsible investment and stewardship in 2020.
We look forward to reporting annually on the ways in which we continue to enhance our approach, responding not only to the ever-changing investment environment but to the evolving needs of our clients.
— Richard Brandweiner
Pendal Chief Executive Officer, Australia