Organising a Responsible Active Investment Manager

Current Head of Investment at Hermes Investment Management

Why is this interview interesting?

How Hermes Investment Manaegement is structured to engage corporates on ESG matters effectively

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Executive Bio

Eoin Murray

Current Head of Investment at Hermes Investment Management

Eoin is Head of Investment and a member of Hermes’ Executive Committee. Eoin also leads the Investment Office, which is responsible to clients for the investment teams’ consistent delivery of responsible, risk-adjusted performance and adherence to the ESG processes at Hermes. Eoin joined Hermes in January 2015 with over 20 years’ investment experience. Eoin joined from GSA Capital Partners, where he was a fund manager. Before this, he was Chief Investment Officer at Old Mutual from 2004 to 2008 and also held senior positions at Callanish Capital Partners LLP and Northern Trust Global Investments. He began his career as a graduate trainee at Manufacturers Hanover Trust (now JPMorgan Chase) and subsequently performed senior portfolio manager roles at Wells Fargo Nikko Investment Advisors (now BlackRock), PanAgora Asset Management and First Quadrant.Read more

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Interview Transcript

How have you structured Hermes to engage companies on ESG effectively?

We’ve done two things that I think I would reference. The first is, we have a separate team of engagers. That is, people that are dedicated to talking to companies, in the right way and we have quite a bit of academic evidence as to what makes for a successful engagement and those practices are followed by our engagement team.

The other key piece is that the engagers have to work alongside portfolio managers. Those portfolio managers are responsible for integrating ESG information, in a way that makes sense to them. To me, this is an absolutely key piece. With a portfolio manager, if they have a particular philosophy and an investment process in mind, the best thing that I can do, as a Chief Investment Officer, is to offer them the opportunity to exercise that philosophy and process, with the least number of constraints. A feeling of ownership comes from their belief and that, ultimately, drives accountability and then the results that you’re after.

The same is true of how they go about incorporating ESG information. It’s essential that you let portfolio managers drive that process, in a way that makes sense for them. If you try to impose it from the outside, with a separate team of ESG analysts, my suspicion is that you’ll get a suboptimal result. You won’t get portfolio managers that are enthused about how they are incorporating that ESG information.

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Organising a Responsible Active Investment Manager(November 29, 2019)

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