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Henderson embraces SRI

June 2001

Asset management company Henderson Global Investors is expanding the corporate governance standards of its UK investment policy to include the environment, human rights, employee relations and community relations.

The expanded policy in due course will apply to the $157billion (£110bn) of assets it manages.

Henderson says it will continue to make investment decisions ‘on the basis of conventional business criteria’, but social and environmental issues will now be raised ‘as part of Henderson’s ongoing relationship with a company as a shareholder’.

It says the approach has been developed because some of its institutional clients are now taking greater account of environmental, social and ethical issues when developing their investment policies.

The policy will initially be applied to UK companies, starting with the FTSE 100, but will eventually cover all investments managed out of London.

Ian Buckley, chief investment officer at Henderson, said the stance would allow Henderson to engage with companies on social and environmental issues more regularly. Among other things, the policy says Henderson managers will call for a meeting with companies that do not report on the implementation of a human rights policy.

Henderson will urge businesses to appoint a director or senior executive responsible for human rights.

The policy says Henderson will engage with companies to persuade them to ‘adopt, disclose and report on policies for consulting with local communities’, and adds that they should have a policy ‘which acknowledges their social responsibility as an employer’ on issues such as training and equal opportunities.

If companies do not respond to its suggestions, Henderson says it may vote against, or abstain on, the adoption of their annual report and accounts at AGMs.

Henderson is the latest investment manager to extend the use of socially responsible investment techniques beyond its niche ethical funds.

Morley Fund Management recently adopted a voting policy requiring FTSE 100 companies to publish environmental reports (EP1, 2001). Seven of the 40 funds managed by Morley are niche SRI funds.

Last month Storebrand, which is Norway’s largest insurer and manages four SRI funds, also unveiled a socially responsible investment policy for its entire stock portfolio.

The Storebrand policy, which will be implemented over the next few months, is expected to lead to about 50 companies being dropped from the 600 in which Storebrand currently invests.

Shares in tobacco firms, some chemical businesses and companies judged by Storebrand to have a poor human rights record will no longer be held in the life insurance and pension funds it manages. Shares account for $2.8bn of the $12bn assets under Storebrand management.




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