- About Us
- My Account
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
The challenges of the past year have highlighted the potential for environmental, social, and governance (ESG) factors to become even more relevant to the investments we make on our clients’ behalf and have underscored the increasing importance of stewardship by fiduciaries and active investors. In 2020, an unprecedented number of our corporate engagements included ESG topics, a trend we think will continue in 2021 and beyond. In particular, we expect many conversations to address executive compensation and climate change, along with diversity, equity, and inclusion (DEI).
Ahead of proxy voting season, we are paying particularly close attention to executive compensation plans. Following corporate layoffs and furloughs during the COVID-19 pandemic, outsized executive pay plans have come under greater scrutiny. We prefer executive pay to be more closely aligned with company performance. Generous executive compensation packages that set low bars for performance may be inconsistent with the experience of company shareholders and other stakeholders.
Another focus is climate change, which we believe poses material long-term financial risks for economies, companies, society, and (therefore) client investment portfolios. Companies will need to prepare for both the physical and transition risks associated with climate change. We expect to engage more deeply with companies to help them assess and improve their climate preparedness and disclosures. In December 2020, Wellington became a founding member of the Net Zero Asset Managers initiative. This opportunity enables us to demonstrate continued leadership on climate issues, strengthen engagements with portfolio companies, and enhance consultative client relationships.
We continue to improve our understanding of portfolio companies’ response to and action on racial inequity. While we believe DEI practices can impact long-term performance, we can only adequately assess these practices when robust disclosure is in place. We encourage companies to disclose the racial and ethnic composition of their boards and (starting in 2021) plan to vote against the reelection of US nominating or governance committee chairs that fail to disclose this information. We also expect companies to communicate goals and strategies for fostering a diverse workplace and disclose workforce diversity data. We plan to encourage transparency and improvement in these areas through engagement and proxy voting.
All figures are for the Wellington Management Group of companies as at 30th June 2022.
Past performance is no guarantee of future performance and can be misleading. Funds returns are shown net of fees.
Source: Wellington Management
Investment in the funds described on this website carries a substantial degree of risk and places an investor’s capital at risk. The price and value of investments is not guaranteed and can go down as well as up. An investor may not get back the original amount invested and an investor may lose all of their investment. Investment in the funds described on this website is not suitable for all investors. If an investor is in any doubt as to the suitability of an investment in a fund, an investor should consult an independent financial advisor. The information on this website does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell or otherwise transact in any security including, but not limited to, shares in the funds. An investor should only invest in a fund once that investor has carefully read and understood the offering documents for the relevant fund, which are the relevant prospectus, and Key Investor Information which contain further information on the risks and features of the fund, and the latest financial reports and any other offering documents for the fund which are available on this Website. Unless stated otherwise data is as at previous month end.