Neuberger Berman Announces Firm-wide Climate-related Corporate Strategy and Risk Analysis Capability
Neuberger Berman, Alexander Samuelson, (212) 476-5392, Alexander.Samuelson@NB.com
New York, March 18, 2019—Neuberger Berman, a private, independent, employee-owned investment manager, announced today that it had completed the implementation of the main recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD). In particular, the firm has implemented a new resource to analyze potential climate-related risk and has finished quantifying the potential value-at-risk from climate change to all the public equity and corporate-issuer fixed income holdings in the firm’s U.S. mutual funds and international UCITS range, and will expand that analysis to holdings in other client portfolios in the future. Using scenarios developed to align with the commitments of the Paris Agreement on climate change, Neuberger Berman’s portfolio managers have analyzed and reviewed which securities are likely to financially benefit or suffer from changes in weather patterns, regulation or technology shifts. The firm’s Board of Directors has been charged with oversight of climate risk and changes have been made to the way the firm manages climate risk in its own operations.
By systematically analyzing the potential investment implications of climate change across portfolios, the firm has another resource to target long-term value creation for clients. The firm is running a range of scenarios, including those aligned with a 2° Celsius and a 1.5° Celsius transition. The results will allow analysts to focus on engaging with companies and management teams who appear to be particularly at risk. This engagement will continue to provide bottom-up insights to further enhance our understanding of climate risk.
“As the world transitions to a lower carbon economy, it is important for us to understand how best to position our portfolios to serve our clients’ objectives,” said Jonathan Bailey, Head of ESG Investing at Neuberger Berman. “No scenario will be perfectly accurate, but by systematically modelling climate-related risk and opportunity, our portfolio managers are better informed about how their portfolios are positioned. They can then choose how best to apply all the tools of active management, whether that is to engage or ultimately to sell a security when it no longer offers an attractive risk-adjusted potential return.”
Chairman and Chief Executive Officer (CEO), George Walker stated “Climate change is real and will impact risk and return across industries and asset classes. As an asset manager with a long-term perspective, we believe that it is important to our clients to assess the potential implications of climate change for the companies in which we invest. We will continue to engage with management teams and clients on this important topic.”
In-line with the best-in-class governance recommendations of the TCFD, Neuberger Berman’s Board has taken overall responsibility for managing climate risk for the firm as part of its broader oversight of enterprise risk. Chief Officers for Investment (CIOs), Risk (CRO), and Operations (COO) will oversee the climate-related corporate strategy as part of the entire firm’s overall management working alongside the firm’s ESG Investing team and portfolio managers. The firm’s climate-related corporate strategy provides further details on the approach.
Neuberger Berman is a signatory to the UN-supported Principles for Responsible Investment (PRI), the Global Investor Statement to Governments on Climate Change, and a lead investor in the Climate Action 100+.
Neuberger Berman ESG Investing policies, white papers and more located here.
About Neuberger Berman
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 22 countries, Neuberger Berman’s team is more than 2,000 professionals. For five consecutive years, the company has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). Tenured, stable and long-term in focus, the firm fosters an investment culture of fundamental research and independent thinking. It manages $304 billion in client assets as of December 31, 2018. For more information, please visit our website at www.nb.com.