Neuberger Berman is a signatory of the Principles for Responsible Investment (PRI), in recognition of the impact that we believe environmental, social and governance (ESG) issues can have on long-term investment performance. As fundamental investors, our portfolio managers have long considered ESG factors as part of their investment processes. The PRI provide a framework through which to report and assess such factors, offering an additional tool as we seek to fulfill our mission of partnering with clients to achieve their unique investment objectives.
The PRI were developed by the investment community in 2005, under the auspices of the United Nations. In becoming a signatory on June 29, 2012, we agree to:
- Incorporate ESG issues into investment analysis and decision-making processes.
- Be active owners and incorporate ESG issues into ownership policies and practices.
- Seek appropriate disclosure on ESG issues by the entities in which we invest.
- Promote acceptance and implementation of the PRI within the investment industry.
- Work together to enhance our effectiveness in implementing the PRI.
- Report activities and progress toward implementing the PRI.
PRI Advisory Committee. The firm has an advisory committee charged with overseeing our PRI efforts. The committee includes senior level representation from portfolio management, legal and compliance, global equity and fixed income research, the firm’s Proxy Voting Committee, corporate social responsibility and our Socially Responsive Investment (SRI) Group.
Investment and Research. Our portfolio managers incorporate many ESG factors such as environmental and product liabilities, legal risk and corporate governance into their investment processes, which are also considered and analyzed by our centralized research teams. Our investment professionals can access an array of ESG-related analytical sources. As part of the PRI documentation process, we are seeking ways to formalize the availability of such insights across our firm, providing another lens through which to view the fundamental prospects of investment candidates.
Socially Responsive Investing. Neuberger Berman is a pioneer in socially responsive investing; we first began applying "avoidance screens" in 1942, and launched one of the first socially responsive investment teams in 1989. Stemming from the belief that responsibility is the hallmark of quality, the SRI Group integrates ESG criteria into its investment analysis, seeking opportunities in well-positioned businesses demonstrating leadership and progress in areas of social and environmental impact.
Engagement. The firm is actively engaged with its portfolio companies through direct meetings with company management and through the proxy voting process. Neuberger Berman hosts on-site meetings with top management of current and prospective holdings, engaging company officials on a wide range of topics related to their business. We maintain proxy voting policies that are designed to reasonably ensure that proxies are voted prudently and in the best interest of the advisory clients for whom we have voting authority. Our Proxy Voting Committee oversees the proxy process, which includes guidelines specifically for SRI clients. The firm is an advocate for greater disclosure of information to investors through our participation as a member of the Carbon Disclosure Project, the CDP Water Disclosure Project and the Forest Footprint Disclosure Project. In addition, we take part in a range of corporate outreach initiatives, in conjunction with nonprofit partners and our employees.
Reporting. As part of our commitment as a signatory, the firm reports on our ESG activities to the PRI on a comprehensive basis each year.
An Ongoing Commitment
We are committed to strengthening and refining our ESG approach—enhancing the dialogue with industry peers, augmenting our ESG-related reporting and research processes, and documenting existing activities. At the core, we believe that the PRI are consistent with our heritage as a fundamentals- and research-focused investment firm. We plan to work diligently for their acceptance and relevance, consistent with our focus on serving the interests of our clients.