At J.P. Morgan Asset Management, we take a forward-looking investment approach to deliver long-term sustainable financial return in a fast-changing world.
Stewardship is in our heritage
As stewards of our clients’ assets, we believe that the companies in which we invest should be focused on responsible allocation of capital and long-term value creation.
We recognise our responsibility to engage with the companies in which we invest, to ensure our clients' interests are represented and protected. Regular contact with the companies in which we invest has been vital to our active heritage, and is at the heart of our investment processes today.
"For us, engagement and proxy voting is not an afterthought, but an integral part of alpha generation."
Jennifer Wu
Global Head of Sustainable Investing
Our long-term stewardship priorities are those we consider most material to the financial returns we deliver and consistent with our commitment on sustainable investing.
Governance
Companies that get their governance right tend to get other sustainability issues right.
We want to invest in companies where the entire board is fully engaged in the affairs of the company; companies that are open and honest in their communications with all shareholders, and which acknowledge and learn from their mistakes. We believe directors should represent all shareholders equally, and minority shareholders should be protected from abusive actions by controlling shareholders.
Strategy alignment with the long term
We believe long-term thinking leads to sustainable business models.
As long-term investors, we expect companies and boards to articulate their vision for the company, and to take steps, including through their compensation arrangements, to align themselves with long-term outcomes.
Human capital management
Effective management of human capital is critical to an engaged and productive workforce.
Effective management of human capital, including workplace standards, education and training, and diversity and gender equality, is critical to maintaining an engaged and productive workforce. Companies should ensure that they have appropriate policies and procedures in place to protect the rights of their employees.
Stakeholder engagement
Generating long-term sustainable returns requires managing the interests of stakeholders.
We believe that a sustainable company should act in the interests of all of its stakeholders – not just a narrow group of providers of capital – in order to create value. Companies should strive to promote positive relationships with employees, supply chains and customers, as well as to understand their broader impacts on the communities in which they operate.
Climate risk
Climate change is a global challenge that investors cannot afford to ignore.
We believe that the risks and opportunities related to climate change can have a material impact on profitability, balance sheet, and can directly impact the ability of companies to create long-term shareholder value. By embedding climate risk considerations into corporate strategy, companies can manage risk and exploit opportunities to create sustainable value for shareholders in the long term.
Voting responsibly and engaging for change
Our stewardship activities are based on proprietary environmental, social and governance (ESG) research by our investment desks and Sustainable Investing Team.
Our investment stewardship specialists play a key role in ensuring consistent, high quality dialogue with the companies in which we invest and guide our voting decisions, in collaboration with our portfolio managers and sector or credit analysts.
J.P. Morgan Asset Management as of 31 December 2019
~700 dedicated ESG engagement meetings
each year
Voted at ~8,000 AGMs in 80 markets globally
in 2019
Our team and approach
Stewardship is underpinned by the research of our deeply resourced network of investment professionals. Regional heads of stewardship work collaboratively with local investment teams and report to the Global Head of Sustainable Investing, Jennifer Wu, who is accountable to the operating committee.
Risk summary
Investing on the basis of sustainability/ESG criteria involves qualitative and subjective analysis. There is no guarantee that the determinations made by the adviser will align with the beliefs or values of a particular investor. Companies identified by an ESG policy may not operate as expected, and adhering to an ESG policy may result in missed opportunities.
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