James Hamilton and Sheena VanLeuven are Directors at PJT Camberview. This post is based on a PJT Camberview memorandum that features an interview with Jonathan Bailey, Head of ESG Investing, and Caitlin McSherry, Director of Investment Stewardship, of Neuberger Berman. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here); The Agency Problems of Institutional Investors by Lucian Bebchuk, Alma Cohen, and Scott Hirst (discussed on the Forum here).
Key Takeaways
- Neuberger Berman takes a Portfolio Manager-driven approach to voting, engagement and ESG integration across asset classes
- NB Votes, Neuberger Berman’s proxy voting disclosure initiative, will expand this year with the goal of improving transparency and communication on voting decisions
- Key focus areas for the 2021 proxy season include diversity disclosure such as EEO-1 reporting, political spending disclosure and pandemic-related executive compensation decisions
- Neuberger Berman’s climate risk analysis is centered on SASB and TCFD-aligned reporting and focused on company actions to reduce emissions and mitigate physical risk from climate change
Approach to Stewardship and Engagement
James Hamilton: What are the core pillars of Neuberger Berman’s approach to stewardship and how has that evolved in recent years?
Caitlin McSherry: At Neuberger Berman, stewardship is not a separate function but an integral part of the investment process. Rather than having a distinct team dedicated to stewardship efforts such as proxy voting and engagement, we have embedded those responsibilities within our investment teams as it provides the most direct mechanism to integrate ESG into our investment processes. We have a robust approach to stewardship and individuals who are competent and able to engage on these matters across all asset classes.