“Waste and Workers”
ISIS - Responsible Investment
UK Top 10 Investment Manager [£63.3 billion of FuM; June 2004]
2nd July F&C and ISIS Boards agreed to merge
Merger expected to be completed in October 2004 under name of F&C [£120 billion FuM, as at 2
Effective management of social & environmental issues essential to long-term performance and business success
Responsible Engagement Overlay (reo®): uses shareholder influence to encourage higher standards where there is a business case to do so
reo® applied to all ISIS equity assets since 2000
Focus on issues affecting shareholder value e.g. climate change, human rights, bribery and corruption, labour standards
Why “Waste and Workers”?
Benchmarking the Giants
11 International companies
- 4 European, 3 Japanese, 4 US
- Board accountability
- Capacity building & training
- Follow-up & continuous improvement
- Life-cycle approach to product development
- Take-back and recycling, including electronic waste.
“On the Starting Grid”
“The Chasing Pack”
Lagging on Labour Standards
Management of labour issues lags significantly behind management of environmental issues across all dimensions
Most companies have policies with allocated responsibility…..
but systems have yet to be implemented for monitoring/audit etc
Generally weak, companies moderately happy to talk about environmental risks in supply chain…. but not ready to discuss risks arising from labour issues
Ups and Downs
Knowledge of supply chain
Security of supply
Staff retention & morale
The missing link - how to tie performance to remuneration? Relevant KPIs?
Locating risk - how to identify ‘risky’ suppliers? Who else needs to be monitored?
Boundaries of engagement - 2nd tier suppliers and beyond - whose responsibility?
Change and control - Integrated or parallel monitoring processes?
Learning effects - In-house or external auditors?
End of life management - Residual value of electronic waste? Contractor standards?
Whistleblowing - Through which channels? In-house or outsourcing?
Disclosure - Relevant and credible in a global risk context? 3rd party verification?
The ISIS Study and beyond
ISIS/ DRKW seminar May 2004
Individual feedback to participating companies during 2004
some companies have shown improvements already
Engagement with other companies in the sector
Engagement with the sector on broader CSR Issues
Encouraging industry initiatives