Sustainability as a fundamental criterion for managing the investment strategy. Invesco has already integrated environmental, social and governance factors, known as “ESG criteria”, in 75% of its investments and by 2023 it aims to reach 100%. Speaking in figures, in 2020, Invesco's ESG assets under management amounted to 34,5 billions of dollars. In 2019, they amounted to $21 billion. In just one year, the increase was therefore equal to 64,3%. Globally, the asset management company manages 1,3 trillion assets on behalf of various clients (as of January 31, 2021) and a total of 40 ESG products available on the market.
This is the photograph that emerges from the "2020 Investment Stewardship Annual Report", in which Invesco illustrates the engagement activities, the approach to proxy voting and areas of action on climate change and social equity.
“Last year was a time of uncertainty, but our strong focus on corporate governance and stewardship has not wavered. We continue to engage significantly in client engagement activities to address short-term issues, long-term risks and new opportunities,” said Cathrine de Coninck-Lopez, ESG Global Head at Invesco, adding That. “ESG factors are built into everything we do and they underpin how we aim to deliver the value customers seek.”
THE ESG STRATEGY
There are three fundamental aspects on which Invesco has focused its sustainable philosophy. First of all, concreteness: when evaluating the ESG criteria implemented by companies, the risk and the economic context in which they develop must also be taken into account. The concept of "improvement" carried out by the company is also interesting. Not only are we investing in companies that have already 100% implemented their ESG strategy, but we also take into account the path that companies can take in terms of sustainable practices, because this can lead to "favorable long-term financial performance", he explains Invesco. The third fundamental criterion is "engagement", considered as an opportunity. For this reason, the Atlanta-based giant considers dialogue with the companies in its portfolio "an essential component of the investment process of the fundamental teams".
PROXY VOTING AND ENGAGEMENT
In the “2020 Investment Stewardship Annual Report”, Invesco explains how proxy voting is “an integral part of its investment management responsibilities”. For this reason, last year, the company voted in 10.399 meetings out of 247.465 resolutions in 74 markets, optimizing engagement and maintaining a constant dialogue with active investors. “Our passive strategies – adds Invesco – usually cast a vote in line with the majority holder of the active equity component held by Invesco. As a result, the impact of our vote is magnified by giving our active equity managers even greater authority over portfolio companies,” the report reads.
In parallel to proxy voting, another way to manage the value of investments is to stimulate engagement with company management, a practice which allows Invesco to actively intervene on the ESG aspects of a company that could have an impact on the value future. “For this reason, Invesco held more than 2.000 engagement meetings with companies during 2020,” specifies the company.
CLIMATE CHANGE AND SOCIAL EQUITY
When we talk about sustainability it is impossible not to refer to the problems triggered by climate change. Invesco is committed to complying with the recommendations of the Task Force on Climate-related Financial Disclosures and invests in companies that allocate capital to the transition. Last year, the US company supported 55% of shareholder proposals that asked companies for more information on the risks of climate change for corporate activities and greater transparency on supervision, control mechanisms, gas emission reduction targets greenhouse, including methane emissions.
Turning instead to social equity, several global initiatives have been undertaken, including the Women's Network, an LGBT Network and a Black Professionals' Network. The aim is to achieve at least 35% female representation among senior leaders by 2022, up from 33% today.
