Commercial, GHG Emissions, Finance - May 12, 2020
T. Rowe Price finds climate change top issue among customers
Rowe Price announced May 11 that they found climate change and other environmental, social and governance (ESG) issues to be the most pressing among those companies in which they engage in portfolio management.
The global asset management company, who manages $1.01 trillion in their portfolio, released their second annual ESG report and reported that ESG is being incorporated into how they manage the thousands of companies in their portfolios and how they cast their proxy votes.
The report found that at the top of their five top-ranked company engagement topics, environmental issues were at the top, further broken down into environmental disclosure, product sustainability, greenhouse gas emissions, responsible investing and environmental management.
“Our clients are increasingly concerned with understanding environmental-related risks within their portfolios,” Maria Elena Drew, director of research and responsible investing, said in a statement. “For us, environmental data is a key component within our responsible investing indicator model, which integrates into our broader investment process. As part of our commitment, we’ve been active in using our scale and influence to drive positive change. In fact, ESG disclosure was our #1 engagement topic of 2019, with environmental disclosure a feature of 38% of our ESG engagements.”
Rowe Price also implemented a Responsible Investing Indicator Model (RIIM) that assesses how responsible an investment would be based on 20 indicators. The model has been used to assess the profiles of more than 14,000 corporate and sovereign entities around the world. The central goal of these different assessments and research is to identify how an investee company is building environmental sustainability into their long-term strategic planning and to guide them toward best industry practices. The environmental factors assessed with the RIIM include:
- Supply chain
- Raw materials
- Energy and emissions
- Land use
- Water use
- General operations
- Product sustainability
- Products and services environmental incidents