Sustainability and engagement
The integration of environmental, social, and governance considerations into our quantitative and fundamental research is done solely in the pursuit of compelling risk-adjusted returns or to meet specific client objectives. We believe that by analyzing non-financial risk factors, we can achieve a more holistic view of a company’s potential.
Sustainability research
We conduct sustainability research on all long holdings across all strategies at Boston Partners, including new holdings and those due for an annual update. To do so, we rely on primary source documents from issuers, such as annual reports/10-Ks, proxy statements, sustainability reports, etc. The result is a robust internal rating system that rates securities on sustainability risk and directional change. We conducted more than 1,000 such reviews in 2024.
William G. Butterly, III
General Counsel and Director of Sustainability and Engagement
Molly Clements
Research analyst
Katie Zona
Research analyst
Jonathan Corning
Research analyst
Areas of focus and examples of best practices
Is there an independent Board Chair; a declassified Board; a majority of independent directors; sufficient shareholder rights; equal voting rights for multi class stock structure; a comprehensive code of conduct; disclosure of whistleblower line statistics; is executive compensation performance-based, and is it excessive compared to peers?
Does the issuer disclose climate change risks and opportunities in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) or the Carbon Disclosure Project (CDP); what are the environmental risks, and how are they managed; what steps has the issuer taken to reduce its carbon footprint; does the issuer have environmental goals with a specific roadmap for achieving them; is environmental data, including operational greenhouse gas emissions, energy use (including the proportion from renewables), and water and waste usage, disclosed; are statistics verified by a third party?
How expansive is the supply chain and where are suppliers located; does the issuer require suppliers to abide by a supplier code of conduct and what is the oversight process; is the issuer a member of the Responsible Business Alliance (RBA); does the issuer conduct supplier audits and disclose the number of suppliers audited annually, the results of those audits and any corrective actions taken; are there any concerns regarding forced or child labor?
Does the issuer produce a sustainability report in accordance with Global Reporting Initiative (GRI) and/or Sustainability Accounting Standards Board (SASB) standards; does the issuer align with the UN Sustainable Development Goals (SDGs); is the issuer a signatory of the UN Global Compact (UNGC); is there Board and management level oversight of ESG; are material sustainability targets incorporated in executive compensation; does the issuer provide beneficial products or services?
Is the workforce and management diverse; what are the safety processes and safety statistics; are collective bargaining rights recognized; what are the professional development programs and does the issuer provide usage data?
What litigation and regulatory actions has the issuer faced in the past five years, and what do those actions say about the issuer, its processes and compliance oversight?
Engagement
The team regularly addresses sustainability concerns with issuers as part of a regular shareholder outreach process. We inform each issuer of any sustainability deficiencies uncovered by our research and whether Boston Partners intends to vote against a management recommendation during proxy voting, which often leads to further discussion with company management.
Governance committee
Boston Partners’ Governance Committee is comprised of representatives from portfolio management, the fundamental analyst team, quantitative research, investor relations, sustainability and engagement, and investment operations. The committee is responsible for overseeing the proxy voting process, including establishing and updating proxy voting policies as necessary, as well as reaching consensus on specific proxy votes.
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