Blogs

Key takeaways include: 

• ESG: As previously reported, T. Rowe bifurcates the "E&S" and the "G" investment decision-making responsibilities, with Donna leading the Governance voting and engagement, and Director of Research - Responsible Investing Maria Elena Drew focusing on the Environmental & Social issues, based on what the firm believes to be inherent differentiators that warrant this approach.
  
  In addition to the company, T. Rowe looks primarily to Sustainalytics, Bloomberg direct data, and analyst insights and other internal sources for company-specific E&S data. The firm astutely observes that companies are being penalized by E&S raters in making their E&S disclosure more reader-friendly via the use of graphics and otherwise because these more reader-friendly formats aren't "readable" by the types of tech tools the raters rely on for scoring purposes. 

• Engagement: Also noted in our previous report, Donna is concerned that calls for engagement are being driven largely by expectations that companies affirm they have engaged with their investors, rather than for the purpose of addressing particular engagement-worthy issues. She doesn't think the current aimless engagement approach - i.e., engagement simply for engagement's sake - is sustainable long-term.
  
  Companies should be familiar with T. Rowe's voting policies. T. Rowe generally won't seek to engage on issues where the firm has a definitive position. However, on more nuanced issues, it will seek to better understand the company's view and specific circumstances. 

• Activism: Donna noted that the firm's published "Investment Philosophy on Shareholder Activism" (previously reported on here) was very well-received by companies, advisors, and other investors and activists, but that it merely memorialized the firm's pre-existing approach, and its expectations of companies and activists, in the context of an activism campaign.