Kate’s 2021 appointment as global head of corporate responsibility reflects the growing importance of this issue to PineBridge and the seriousness of the firm’s commitment of resources to pursue corporate responsibility in its various forms.
Here she explains the firm’s objectives regarding corporate responsibility, how PineBridge approaches the issue with investee companies, and where ESG objectives fit in, along with a preview of what she sees coming over the next several years.
How would you describe your role, and the firm’s primary objectives, relating to corporate responsibility?
As global head of corporate responsibility, I partner with colleagues across the firm to set strategic corporate responsibility goals for PineBridge while also establishing best practices to measure advancement and uncover areas where we can make a positive impact to society on behalf of our clients and employees.
To do this, we have a robust framework set by our Corporate Responsibility Steering Committee, which includes senior representatives across functions and regions. Together, we strive for progress in four key areas: Diversity & Inclusion (D&I), Company Responsibility, ESG Investment, and Stewardship. Each area has its own subcommittee that meets regularly and engages every level, region, and business unit of the organization.
I view my appointment to this role as a commitment on behalf of the firm to focus dedicated resources on ensuring we live up to our potential as a global firm.
As an organization, one key focus area is environmental, social, and governance (ESG) investing, which has become increasingly relevant to the investment community. Its importance to our clients and our industry really cannot be overstated. Witness the evolving requirements from regulators and governing bodies to ensure that asset managers abide by ESG principles and reporting expectations.
Explain PineBridge’s approach to corporate responsibility. How does it differ from that of peers in the industry?
At PineBridge, our approach to corporate responsibility begins with striving to meet the expectations of our clients, employees, and communities. This can involve investigating and implementing policies that are thoughtful about our impact on society while meeting the regulatory requirements that apply to our business. Ultimately, we want to build on the confidence our clients have bestowed on us to make responsible investment decisions and nurture a corporate culture that makes those decisions possible.
Attention to these concerns is embedded in each of our functions, from the investment professionals who manage assets, to our client teams, to our IT and operations teams, to name a few. We believe this integration gives us an edge in that we can quickly make adjustments where they’re needed most, evolve, and implement whatever actions may be needed to deliver on our corporate responsibility.
What is PineBridge prioritizing with respect to corporate responsibility, and how did the onset of Covid-19 help or hurt those efforts?
Though our employees’ well-being and corporate culture have always been top of mind, the pandemic brought that to the forefront globally and expediently. Pandemic-related shutdowns and our firm’s shift to remote work pushed us to be more thoughtful about our employees’ needs beyond traditional requirements like office space or other corporate responsibility matters, such as our carbon footprint.
We understood that of utmost importance is how we support our staff. We engaged with all employees to learn about their challenges and areas of concern, including well-being, support, team engagement, and time management. The pandemic blurred the lines between work and home for many. Ensuring that our employees could express concerns and ideas was important to overcoming any obstacles that may arise. We reworked many corporate policies regarding vacation time, flex time, and support services. The pandemic taught us that asking the right questions is key and that listening is extremely valuable.
It was also important for us not to lose sight of other corporate responsibility goals, including initiatives related to D&I. We launched new initiatives that involved engaging in conversations that help reveal sentiment and will help advance our goals and approach to D&I.
How does PineBridge approach ESG investing across the firm? Is the approach standardized, or does it differ among the firm’s investment platforms?
At PineBridge our ESG investing capabilities date back more than a decade, with ESG issues serving as a framework for managing risk. Today’s investment landscape calls for much more than managing risk. It includes pushing for change and improving on all ESG issues as directed by our investors. This has opened the door to working with the companies we invest in and taking a “consultivist” approach that stresses cooperation, rather than an “activist” approach. We believe the consultivist approach is ultimately the most beneficial way to produce real change, be it on environmental impact, global and local social issues, or investigating a company’s governance practices.
As it pertains to the environment, this process involves engaging in a dialogue with companies to encourage them to adopt better practices related to climate change. That said, taking account of the risks attached to climate change requires extensive investment diligence, sustained engagement, escalation when engagement doesn’t appear to be working, voting against while always explaining why, and finally, if all else fails, divesting. This process is delegated across the firm’s investment teams, but our goals and policies are a consistent part of our corporate responsibility framework.
Consider the environmentally intensive beef industry in Brazil, which is the world's largest beef exporter. As investors in this sector, understanding the environmental risks has been crucial to our investment decisions and our interactions with management. The three largest issuers, which represent 70% of Brazilian beef production, committed in 2009 to a policy of preventing deforestation, thanks to pressure applied from both the investor community and international organizations such as Greenpeace. Since then, our engagement has focused on the steps each company has taken to manage the environmental risks along its supply chains and the transparency of supply-chain management. Progress along those fronts has enhanced our ability to analyze environmental risk, with an expansion of quantitative data regarding each company's breadth of supply-chain coverage. This, in turn, has had a major impact on which positions we have added, held, and sold out of in the relevant portfolios.
For more information on PineBridge’s efforts, visit pinebridge.com/corporate responsibility