ESG亮点：照亮可持续金融

1、J. R MorganAsia Pacific Equity Research 01 April 2019Australia ESGStephen Blagg AC(61-2) 9003-8637 Bloomberg JPMA BLAGG J.P. Morgan Securities Australia LimitedFinal RankTickerTotal Score1MQG348.432PDL348.253CGF342.304AMP333.265PPT317.416JHG308.107MFG282.538IFL270.219PTM214.92Table 1: ESG Disclosure

2、 Pentathlon Final RankingsSource: J.P. Morgan estimatesESG SpotlightShining a light on Sustainable Finance. Asset and Wealth ManagersIn this spotlight we appraise ESG reporting of the Asset and Wealth Managers. To cover all the issues in one report would be a herculean effort; as a result, we recali

3、brate the boundaries and take a pentathlon approach. Specifically, we score the Asset Managers on responsible investment, climate change, human capital management, other stakeholder management and corporate governance disclosure. On our appraisal, Macquarie Group (MQG) wins the pentathlon flanked by

4、 silver and bronze medalists PDL and CGF. IFL and PTM struggle to find consistency across all categories.The pentathlon approach. We examine each Asset Managers approach to Coiporate Responsibility and form our own appraisal of their ESG reporting. The key aspect of a pentathlon is the point system,

5、 whereby each competitor is awarded points based on their performance in each specific event, with the overall winner being the competitor with the most points at the end. We take this approach and score the banks based on the following criteria: 1) responsible investment, 2) climate change, 3) huma

6、n capital management, 4) other stakeholder management and 5) corporate governance. Our approach incorporates disclosure on policies, initiatives, metrics and targets.Macquarie wins by a whisker. On our appraisal, Macquarie wins the pentathlon, with the highest total point score. High ranking MQG, fl

7、anked by PDL and CGF, are followed by AMP, PPT, JHG, MFG, IFL and PTM. While our Asset Managers have made considerable inroads, there is still some ground to be made up.The Royal Commission has shone a spotlight on culture and conduct within the financial services industry and many of the companies

8、covered here were either directly or indirectly affected. AMP had issues around fees for no service, as well as questions around how it provided trustee services in superannuation. IFL it appears has had significant issues with regulators, particularly APRA with regards to its trustee arrangements.

9、MQG was shown to have issues but had taken steps to quickly fix them. The fund managers were not directly focused on, in large part arguably because of their smaller size and because a lot of their dealings with clients would be through intermediaries. The Royal Commission undoubtedly will have sign

10、ificant impact on the sector going forward.We note that some of these conclusions may be at odds with concerns some investors may have about ESG issues the companies face when viewed from a lens that deviates from our strictly numerical calculations. For example, AMP did not fare well with concerns

11、from the Royal Commission into Financial Services, and some have questioned the accounting approaches / assumptions used by CGF in their normalised assumption calculations. Nevertheless, we think that under the metrics we have shown here, the ranking of the stocks is a reasonable reflection of their

12、 standings in terms of the highlighted ESG metrics.See page 34 for analyst certification and important disclosures, including non-US analyst disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may

13、have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Fiqure 2: AMP Share Funds Carbon Footprint Table 6: Pentathlon Event 2 Ranking TableAmp Capital Australian Equity FundsEmiss

14、ions (Kgs Co2/ Thousand $ Invested)Event RankTickerEventScoreTotal ScoreActive Quant Share Fund881PDL72.73153.97AFS Australian Equity Enhanced Index1212AMP54.55142.05AFS Australian Equity Value Plus Fund692JHG54.55129.55AFS Extended Alpha Fund814MFG45.45126.70AMP Capital Spec Geared Aust Shares1115C

15、GF36.36130.11AMP Capital Australian Equity6MQG36.36111.36Concentrated Fund/ 7PPT27.27108.52AMP Capital Australian Equity Income1098IFL18.1880.68AMP Capital Australian EquityOpportunities Fund818PTM18.1868.18AMP Capital Blue Chip Fund86Source: Company reports and J.P. Morgan estimates.AMP Capital Equ

16、ity Fund89AMP Capital Sustainable Share Fund69S&P/ASX 200 Accumulation Index114Source: Company reports.Perennial Value Management, part owned by IOOF, disclose the carbon footprint of the Smaller CompaniesSustainable Future Trust, as shown in Figure 3Figure 3: Perennial Value Management Carbon Inten

17、sity ASX Sin all Or di nones Sustainable Future TrustINTENSITY OF MARKET CAP - SCOPE 1 ANO 2INTENSITY OF REVENUES - SCOPE 1 AND 2Source CAER (Part of Vigeo Eris Network). Factset and Perennial as at 31 December 2018. Whilst due care has been used in preparation of the above, calculations are based o

18、n the information provided.Source: Company reports, CAER.Pendal Group performed well in the second event of our ESG pentathlon and takes the lead from CGF on the pentathlon table.Table 7: Pentathlon Event 2 Scorecard - Climate ChangeSource: J.P. Morgan.AMPCGFIFLJHGMFGMQGPDLPPTPTMCommitmentsInvestor

19、Group on Climate Change (IGCC) member00因0s因000Carbon Disclosure Project00s000000Climate Action 100+ member00s0回s0回回Montreal Pledge0因s回0回00回UNEP Fl alignment0Ssss0因Disclosures relating to Fossil Fuel exposureStatement regarding fossil fuel investment00s000000Stated commitment to future disclosures in

20、 line with TCFD0000000回0TCFD Climate reporting - governance, strategy, risk因因因回回回0回回TCFD reporting - Metrics and targets因ss因s因S回因2 degrees or lower climate scenario analysis因回回因回回S回因Carbon Footprinting00000回0因03 years K to 5 years11%FY2017 9%5 years to 10 yearsOver 10years 48%FY2017 43%24%FY2017 30%

21、Human Capital ManagementPentathlon Event 3Human capital is a key driver for the Asset Managers. Recruiting and retaining the right employees impacts performance and generates revenue growth. Like most service-based companies, Asset Managers are at the forefront of social policy; for example, in effo

22、rts to staff a diverse workforce and offering workplace flexibility.We prefer that all Asset Managers set tangible objectives to ensure an inclusive and flexible workplace. Clear targets can boost performance, improve the brand, attract and retain the right employees and enhance organizational cultu

23、re.Employee engagementA third of the Asset Managers included in this research do not run regular employee engagement surveys. A concern considering that group turnover in the Asset and Wealth Manager sub sector has been rising steadily over the past 5 years. See Figure 4.Challenger (CGF) report the

24、highest levels of workforce engagement (88/100) and employee turnover of 15.8% in the 2018 sustainability report consistent with previous years. The company also links executive remuneration to diversity and engagement outcomes.Perpetual (PPT) also link the STI to employee engagement that increased

25、from 69 to 73 in 2018.At Macquarie Group (MQG), human capital management strategies and performance are afforded active board oversight and linked to executive at-risk remuneration. Reward structures support return generation and attraction and retention of staff.MQGs remuneration is framed to attra

26、ct, motivate and retain high-performing staff. Talent retention and metrics are positive: Deep expertise is evident: MQGs ExecutiveKMP has an average tenure of 25 years whilst 48% of Director-level staff had ten or more years, experience with MQG, and a further 24% had between five and ten years, ex

27、perience. There is success in retention with 6.9% director-level voluntary turnover rate in FY2018 broadly in line with the prior year and remaining below the voluntary turnover rate across MQG overall.Figure 5: Macquarie Group Director level staff tenure in 2018Below 3 years 17% FY2017 18%Source: C

28、ompany reports.Figure 6: Tenure of Executive KMP. Number of years at MQG,Magellan (MFG) do not provide an indication of employee satisfaction despite stating in the 2018 Annual report that people are integral to the success of the company，Pendal Group (PDL) conducts bi-annual surveys specifically mo

29、nitoring employees moving from actively disengaged to engaged (and vice versa). PDL do not disclose the data showcase claims of top quartile status and a 5 point increase in its 2018 score. However, we do note that PDLs turnover of 8.9% in FYI8 was very low compared to sector averages.Despite a dip

30、in the Janus Henderson (JHG) 2016 engagement score (86 vs 89 in 2015), the result demonstrated high employee satisfaction. Pre merger, turnover was low at 10% and nearly 24% of the Henderson workforce has worked there for 1() years or more. As yet we have no data for the combined entity.Diversity an

31、d inclusionGender equality is a key focus for the Asset Managers and many are making a further commitment to women in senior leadership roles. 45% of Australian fund managers surveyed by Frontier employ only men on their equity investment teams despite evidence that greater gender diversity leads to

32、 better risk-adjusted returns.Equity fund managers with greater gender diversity posted higher risk-adjusted returns over a five-year period, according to the research. Australian fund managers fared significantly worse than their global counterparts.Other studies have found a similar lack of gender

33、 diversity, including a recent survey by HESTA of its own fund managers.Our research found that the percentage of women in investment teams at the listed Asset Managers was just 15.6%. The range, as shown in Table 11 was a low of 6% at IFL and a high of 23.4% at AMP.However, there are high levels of

34、 female employee representation in financial services, averaging close to 50% across the companies covered in this report.Companies in the diversified financial sector have on average 42% female employees. Table 11 highlights that IFL and MFG have been the most successful in transitioning female emp

35、loyees into management roles.AMP does not provide any insights to workforce satisfaction. However, gender equality has been at the forefront of AMPs inclusion and diversity drive. In 2016, the company appointed four new women to AMPs management team, added a female director and appointed Catherine B

36、renner as the first female Chairman. The gender equation flipped in 2018 as female board representation hit zero. With over 50% femalerepresentation in the workforce, AMP remains committed to 2020 gender diversity targets:40% Female directors (10% as at March 2019)47% Senior executives (39% as at De

37、c 2018)50% Middle managers (41 % as at Dec 2018)PDL, PPT, MFG, and CGF set targets for 40% female representation at senior executive level in the business to be achieved by early 2020,s.JHGs diversity policy introduced flexible working and unconscious bias training with the following targets:40% fem

38、ale employees by 2021 (37% in 2016)25% female managers by 2021 (15% in 2016)20% female investment professionalsSource: Company reports.The majority of Asset and Wealth Managers report to the Workplace Gender Equality Agency (WGEA) and offer a comprehensive suite of policies that align with gender di

39、versity initiatives, as shown in Table 8.JHG and PTM currently do not publish WGEA workforce reports.Table 8: Workplace Gender Equality Agency: (WGEA) PoliciesAMPCGFIFLMQGPDLPPTRecruitment000000Retention000000Performance000000managementPromotions000000Talent identification000000Succession planning00

40、0000Training and development000000Resignations00000回Gender pay equity objectives000000Gender000000remuneration gapGap analysis - Action taken00000Parental leave - primary carers000000Parental - secondary carers0000E0Source: WGEAAll companies in the diversified financial sector address gender pay equ

41、ity and stand by Equal Opportunitypolicies. We believe these companies should report gender pay scales and explain particular movements - see Table 9.Table 9: Female to Male Salary Ratios2UTB2UT7ZQTB2015 2UTTCGFSenior management83.973.0Other management93.884.0Non-management85.589.0Remuneration posit

42、ioning for women compared to men against the marketmedianSalary package (%)0.0-1.0-1.0-2.0-3.0Total reward (%)-1.0-1.0-2.0-3.0-14.0JHGPay gap (Mean)na36.9Pay gap (Median)na32.7Bonus gap (Mean)na80.9Bonus gap (Median)na64.0AMP, IFL, MFG, MQG, PDL, PPT, PDLNot disclosedSource: Company reports and J.P.

43、 Morgan estimates.At JHG, of 88 fund manager roles in the UK just 11 are undertaken by women. On a global level just 17% of executives are female. In compliance with UK Government requirements, JHG published its first gender pay gap report for 2017. The report detailed the average difference in pay

44、and bonuses between female and male employees based in the UK.JHG signed the UK Women in Finance Charter in July 2017 and have committed to rectify the imbalance, however, in our opinion the 25% by 2022 gender target could be stretched.Challenger Groups human capital management disclosures set the b

45、enchmark for listed Asset and Wealth Managers. At the end of the third ESG DisclosurePentathlon event, CGF and PDL hold the top 2 spotsTable 10: Pentathlon Event 3 Ranking TableSource: J.P. Morgan estimateEvent RankTickerEventScoreTotal Score1CGF81.82211.932MQG68.18179.542JHG68.18197.734PDL59.09213.

46、065AMP54.55196.596PPT50.00158.527MFG45.45172.167IFL45.45126.149PTM36.36104.55AMP, IFL, MQG, PDL, PPT and PTM all undertake gender pay gap analysis but choose not to report results. In our opinion, disclosing the results might generate some momentum towards meeting the quotas.Table 11: Pentathlon Eve

47、nt 3 Scorecard - Human Capital ManagementSource: J.P. Morgan.AMPCGFIFLJHGMFGMQGPDLPPTPTMHuman capital strategies and performance linked to executive remunerationNoRem linked to diversity and engagementRem linked to Employee Engagement and NPSNoNoRem linked to staff retentionNoRem linked to engagemen

48、tNoWomen in Investment teams (%)23.414.85.912.518.812.817.419.415.6Women in Leadership (reported) chg (%)39.0-3%38.2030%40.0026%17.0013%40.0021%23.5027%32.0010%36.77-7%29.0016%Gender target50% by 202038% by 2020N25% by 202240%Increase females at all levels40% by 202340% by 2020NWomen in workforce (r

49、eported) chg (%)52.000%43.805%49.00-2%36.00-3%40.005%38.803%37.000%48.97-4%30.00-4%Gender targetN45% by 2020N40% by 202140%Increase females at all levelsNNNGender Pay AnalysisNYYYNYYYYDetailed data on gender pay trendsNYNYNNNNNTalent pipeline (gender representation for external candidate shortlists)

50、YYYYYYYYYAge diversity / Workplace tenure addressedNYNNNYNNYAustralian Workplace Equality IndexNNNNNYNNNWGEA reportYYYNNYYYNFuture IM/Pact Sponsor / Investment 20/20 schemeNNNYYNYNNOther data on workforce compositionNYNYNNNNNEm ployee Engagement prev scoreY888865Y 86NYY7369NWorkplace FlexibilityNNNY

51、YNNNYParental leave utilised9.8%1.2%1.5%nana9.5%0.1%0.8%naParental leave return ratesna95%nanana98%100%91%naCarers leaveYYYNNYYYNDomestic violence policiesNNNYNNNYNWellbeing / Mental Health AddressedYYYYNYYYNHealth and Safety (reported)YYNNNYNNNEm ployee Training (reported)NNNNNNNNNStaff retention i

52、e: Turnover (%)13.2915.78-8.85-Culture (Code of conduct)Yes.Refreshed code of conduct Aug- 2018Yes. Clear disclosure on policy and processYes, Refreshed October 2018Yes. Clear disclosure on policy and processYes. Clear disclosure on policy and processYes.Business Conduct a key focus in STIYes.Embedd

53、ed into Materiality framew orkYes. Clear disclosure on policy and processYes. Plus training to ensure compliance.Em ployee Share Plan programYYYYYYYYYTable 12: Pentathlon Event 3 Scorecard - Human Capital ManagementSource: J.P. Morgan.AMPCGFIFLJHGMFGMQGPDLPPTPTMWorkforce RatiosHuman capital strategi

54、es and performance linked to executive remuneration000000000Women in Leadership (reported)000000000Gender target0000000SWomen in workforce (reported)000000000Gender targets0000S0SGender Pay Analysiss000E0000Detailed data on gender pay trendss0因0S回SSSWGEA report000回回000SOther data on workforce compos

55、ition回0因0E回回0回Future IM/Pact Sponsor / Investment 20/20 scheme回s回0000回Talent pipeline (gender representation for external candidate shortlists)000000000Age diversity / Workplace tenure addressed回0回00回回0Australian Workplace Equality Index因回因回0回Workforce EngagementEqual Opportunity Employer000000000Em

56、ployee Engagement Survey0000回00SWorkplace Flexibility000000000Wellbeing / Mental Health Addressed0000S000SHealth and Safety (reported)000回S0回0SEmployee Training (reported)S0因因冈回因因sStaff retention i.e.: Turnover (%)00因回S回0因sCulture (Code of conduct)000000000Employee Share Plan program000000000Whistle

57、blower Policy00000000sOther Stakeholder ManagementPentathlon Event 4ClientsAs evidence of strategies deeply aligned with customer outcomes we look for recognition from the clients in the format of disclosed Net Promoter Scores (NPS) and results from advisor surveys. We also consider recent awards fr

58、om independent organisations.Culture and ConductCulture is a key issue for Asset Managers enabling them to attract and retain the right employees. Litigation could lead to financial penalties and reputational damage affecting future volumes.All Asset Managers, 2018 sustainability reports reference a

59、 Code of Conduct recognising the importance of a strong corporate culture based on ethics, values and fairness. Codes were refreshed at AMP and IFL post the Royal Commission.All Asset Managers have established whistleblower policies allowing employees the opportunity to speak up.Aligning with the co

60、mmunity is a common occurrence amongst the investment manages although not all balance community investment with the provision of education and attempts to address financial inclusion.Modern slavery and human traffickingJanus Henderson supports all efforts to eradicate forced labour and other abuses