Schroders

Schroders appears to be actively engaging on sustainable finance policy, generally cautioning against stringent regulatory intervention and arguing for regulation to focus on transparency.

Schroders has stated support for the Paris Agreement and, the 2050 net-zero goal. Schroders has also stated support for reform to address short-termism in markets. Schroders does not appear to be fully supportive of the EU's approach to sustainable finance regulation, cautioning in a 2021 whitepaper that regulatory standards being too prescriptive are a risk for regulation to be effective.

Schroders has been particularly engaged and generally very supportive of improving regulated corporate ESG disclosure. It has supported the mandatory implementation of the TCFD's recommendations in its 2019-2021 CDP responses and in a joint investor statement to governments in 2021. It has further offered support for corporate ESG disclosure across regions in its 2022 CDP response, including in the EU, UK, US, as well as global disclosure through the Financial Stability Board’s (FSB) TCFD guidance on climate-related metrics, targets, and transition plans. During 2019-21, Schroders appeared to have mixed positions on corporate disclosure. In the EU, Schroders cautioned against more rigorous disclosures in feedback to the European Commission's Technical Expert Group (TEG) in 2019 and against prescriptive disclosure requirements in feedback to the European Commission in 2020. However, it did produce a joint statement in 2020 calling for an ambitious review of the NFRD. It also advocated for increased ambition of regulated corporate disclosure in response to consultations from the UK’s FCA in 2020 and 2021 and the US’ SEC in 2021. Schroders did argue for delayed mandatory TCFD disclosures for asset managers until corporate disclosures became “sufficiently widespread” in response to the FCA in 2021. Schroders has also appeared to support the objective of the International Sustainability Standards Board (ISSB) to set up a global reporting standard in a 2022 website article. Schroders has also called for disclosure of nature-related impacts and dependencies by 2030 as part of a joint statement in 2022.

In response to the UK’s FCA in 2019, Schroders argued for a less stringent system for classifying sustainable investments leaving room for innovation and avoiding the exclusion of fossil fuel producers. In response to the European Commission in 2020, it opposed the development of a taxonomy of environmentally harmful activities. Similarly, in multiple website articles in 2021 it argued that the taxonomy could be overly technical and cautioned against the risks of “blacklisting”. In its 2022 CDP response, it did support the extended (transitional) taxonomy.

In its 2019 Sustainable Investment Annual Report, published in 2020, Schroders stated support for a stringent EU Green Bond Standard. In feedback to the TEG, Schroders also appeared to support stringent green criteria but argued against the need for a legislated accreditation scheme and cautioned against overlapping disclosure requirements. In response to the Commission in 2020, it supported the verification for the EU Green Bond Standard, however, it appeared to oppose all new ESG labels and standards suggested by the Commission (e.g. investment funds, ESG benchmark, sustainability-linked bonds). In response to the UK FCA in 2021, Schroders supported a market-based over a legislative approach to green bond standards. It also opposed the inclusion of a “responsible” label in response to the Sustainability Disclosure Requirements (SDR) consultation in the UK, although it supported the labelling of “transitioning” products.

Schroders has supported policies to integrate ESG factors into investor duties, although with some exceptions. In 2019, Schroders opposed the integration of the impacts financial firms have on sustainability in Solvency II and IDD in feedback to EIOPA. In its response to the Commission in 2020,however, it suggested that the inclusion of ESG preferences in investment advice to retail investors should only be as guidance, and it has not supported sustainable products as a default investment option nor incorporating adverse ESG impacts into fiduciary duty. Similarly, in response to the ESA’s Sustainable Finance Disclosure Regulation (SFDR) consultation on investor ESG disclosure in 2020, Schroders argued for a less prescriptive approach and suggested asset managers should lead in considering material issues. In response to the UK’s FCA in 2022, it suggested a delay to the implementation of the Sustainability Disclosure Requirements (SDR) in order to allow other policies to progress (e.g. UK Taxonomy, mandatory TCFD reporting).

In its 2019-2021 Sustainable Investment Annual Reports, Schroders disclosed details on its policy positions and engagement activities. It has also listed its trade association memberships on its website, and has disclosed some details of indirect engagement in its 2019 Sustainable Investment Report, but not in the 2020 and 2021 versions.