Climate change
Climate change is posing urgent and material challenges to companies around the world. At the same time, companies can benefit from the opportunities that arise from the anticipated shift to a low-carbon economy.
Investment stewardship
Responsible stewardship for better client outcomes
Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries. We believe robust investment stewardship practices are an important part of our fiduciary duty, producing better client outcomes and contributing to long-term value creation.
Engagement focused on key priorities
We have identified six main investment stewardship priorities that we believe are the environmental, social and governance (ESG) issues that pose the most significant long-term risks and opportunities to our investments. Together with related sub-themes, these priorities provide a structured and targeted framework for engagement with the companies in which we invest.
Natural capital and ecosystems
Many businesses depend on natural resources in their products or services. The depletion or loss of these ecosystem services through the degradation of nature poses significant financial risks for their long-term business resiliency.
Human capital management
Effective management of human capital is critical to an engaged and productive workforce. Failure to manage related risks and opportunities can affect workforce and stakeholder relationships, potentially impacting shareholder value.
Social stakeholder engagement
To be sustainable over the long term, a company’s leadership needs to take into account the broader network of relationships in which it operates. This includes shareholders, suppliers, customers, and surrounding communities.
Governance
We believe there is strong positive correlation between high governance standards and superior shareholder returns. Effective corporate governance features transparency, accountability, oversight and respect for shareholders.
Strategy alignment with the long term
Long-term thinking leads to enduring business models. We believe executive compensation plans should be structured to create long-term alignment between shareholders and the management of the companies in which we are invested.
Research-powered engagement
Our engagement is based on our in-depth company research, alongside our assessment of macroeconomic drivers, sector-specific factors and financially material ESG themes. Through our global scale and active insight, we seek to intervene proactively before risks are realised and opportunities missed.
Intentionality
We are determined to act in the best interests of our clients by encouraging investee companies to focus on prudent allocation of capital and long-term value creation.
Materiality
We strive to understand how factors impacting sustainability are financially significant to individual companies over time, understanding that the regions, cultures and organisations in which we invest differ greatly.
Additionality
We focus on strategic issues that are most urgently in need of our involvement in order to deliver better long-term return to our clients. We believe that, as large investors, we have the ability to put our resources to work towards achieving the outcomes we seek on behalf of our clients.
Transparency
We seek to be clear about the investment stewardship work we do and take steps to be transparent to our stakeholders, as we expect the same of investee companies.
Enhanced Engagement Program
Through the three pillars of our Enhanced Engagement Program, we aim to manage risk and promote long-term shareholder value at investee companies that most require our time and attention.
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Focus list: Companies in our equity and/or corporate credit portfolios to which we have meaningful investment exposure and where our research has identified financially material ESG risks and opportunities.
Thematic projects: Engagement initiatives on specific themes aligned with our six investment stewardship priorities, targeting a broader number of investee companies on the same set of issues.
Reactive engagements: Engagements in response to corporate actions, notable events, major developments, controversies, norms breaches and matters arising from the proxy voting process.
Engagement activity statistics for 2023
Proxy voting
We vote shares held in our clients’ portfolios based on our reasonable judgment of what will best serve the long-term interests of our clients, in accordance with the legal standards applicable to the particular client account.
We have comprehensive proxy voting policies and guidelines in each region, consistent with law and expectations of good governance practices in these different locations.
Policies and commitments
See our sustainable investing policies and commitments, including our latest sustainable investing statement and investment stewardship report.
Active insight in sustainable investing
At J.P. Morgan Asset Management, we apply deep insight and active ownership to create solutions that meet clients' financial goals and sustainable objectives.
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