FinanceMap scores this financial institution in the following areas. Please navigate to the relevant tab for in-depth analysis
FinanceMap assesses these portfolios for this financial institution. Please navigate to the relevant tab for in-depth analysis.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portion of AUM Assessed: $41.7B
| Holding Name | Contribution to Sector Production |
|---|---|
| Entergy Corp | 18.8% |
| Evergy Inc | 16.7% |
| Duke Energy Corp | 16.0% |
| American Electric Power Company Inc | 11.2% |
| Southern Co | 6.9% |
| PPL Corp | 5.5% |
| NRG Energy Inc | 3.1% |
| WEC Energy Group Inc | 3.0% |
| Enel SpA | 2.5% |
| RWE AG | 2.1% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Suzuki Motor Corp | 32.2% |
| BYD Co Ltd | 27.0% |
| General Motors Co | 18.4% |
| Renault SA | 10.5% |
| Toyota Motor Corp | 4.9% |
| Bayerische Motoren Werke AG | 2.3% |
| Stellantis NV | 2.1% |
| Volkswagen AG | 1.3% |
| Tesla Inc | 1.0% |
| Ford Motor Co | 0.1% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Alpha Metallurgical Resources Inc | 70.3% |
| Glencore PLC | 29.7% |
| Holding Name | Contribution to Sector Production |
|---|---|
| TotalEnergies SE | 32.0% |
| Chevron Corp | 21.4% |
| Exxon Mobil Corp | 14.0% |
| Aker BP ASA | 5.9% |
| CNX Resources Corp | 3.9% |
| EOG Resources Inc | 3.6% |
| Shell PLC | 3.5% |
| SM Energy Co | 3.1% |
| Devon Energy Corp | 2.8% |
| Expand Energy Corp | 2.1% |
Federated Hermes, through its stewardship and engagement arm Hermes EOS (Hermes), appears to be a leading corporate engager on climate change. The asset manager has a robust climate engagement framework which assesses the extent to which companies’ climate ambitions are aligned to 1.5C. It has a high-level process to define engagement success, using a four-stage milestone system that allows to track company progress. Additionally, Hermes has a clearly defined escalation strategy and has provided numerous examples of escalation activities in its reporting, highlighting that it is prepared to escalate through voting against companies, asking questions to the board, filing shareholder resolutions, etc.
Hermes appears to be engaging companies to align their business models with the Paris Agreement. For example, it engaged with Siemens Energy to set science-based targets that cover Scope 3 emissions and with BASF on net zero targets. The asset manager actively engages companies on climate policy influence and its engagements with Duke Energy have resulted in the company publishing a trade association climate review report which outlines the company’s climate position, its views on effective climate policy and review of trade association memberships. Hermes is a highly active collaborative engager on climate and in 2021, led a delegation of eight institutional investors who spoke at LyondellBasell’s shareholder meeting in its role as CA100+ lead.
The asset manager has clearly described the processes in place to review the effectiveness of stewardship policies and activities. For example, Hermes’ Engagement Plan is updated on an annual basis using a structured horizon-scanning exercise. Additionally, it integrates client views and feeds this back into its stewardship approach through an annual client survey and bi-annual client meetings. It is fully transparent about engagements, disclosing numerous case studies in its quarterly engagement reports and annual reviews. Hermes discloses its voting records along with voting justifications in quarterly reports on its website, however, its documents do not detail the resolution name that it has voted for or against.
The asset manager has actively used its shareholder authority to engage companies to become Paris-Aligned, for example, in 2021, it co-filed a shareholder proposal at Berkshire Hathaway requesting the company’s board to publish an annual assessment on how it manages climate-related risks and opportunities.
Insightia data suggests that Hermes has become increasingly supportive in recent years of AGM resolutions InfluenceMap categorizes as in line with the Paris Agreement, supporting 47.3% in 2019, 74.2% in 2020, and 86.7% in 2022. InfluenceMap has not scored Federated Hermes' 2021 voting record as the voting sample size did not meet the threshold for the analysis.
FinanceMap's methodology to measure the engagement process on climate was developed in consultation with several of the world's leading asset managers and uses key aspects of the UK Financial Reporting Council's 2020 Stewardship Code . The Stewardship Code was chosen to benchmark engagement quality as it provides an ambitious framework and detailed definitions of what constitutes effective engagement. FinanceMap defines the term ‘engagement’ as referring to all investor actions undertaken to influence the management strategy of the companies they own including private communications with corporate management and appointed advisors; questions at AGMs/other company meetings; comments on the company in the media; escalation and the shareholder resolution process (filing, voting behavior). FinanceMap’s methodology breaks the engagement process down into a set of sub-activities and looks for evidence associated with these across publicly available data sources.
Climate-relevance categorization of shareholder resolutions is based on the IPCC’s Special Report on 1.5°C and its concluded need for “rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities.” FinanceMap scored voting on any resolution where the intent and likely outcome is consistent with this IPCC stated need. The voting data is drawn from asset managers' disclosures to the US Security Exchange Commission (SEC), asset manager websites (including third-party websites they link to), directly from the asset managers, and through specialist voting data provider Insightia. The full list of resolutions assessed is available here.
The following table outlines the key queries and data sources, which FinanceMap uses to assess asset managers' corporate engagement programs. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
