2023 Stewardship Report
Creating Value Through ESG Integration
Firm Overview
ClearBridge Investments is a leading global equity manager with $151 billion in assets under management with a 35-year legacy in ESG integration as of December 31, 2022.
$151 Billion
Assets Under Management
242 Companies
Where We Are a Top 20 Shareholder
5 Years
Average Period We Own a Company
11 Years
Explictly Incorporating ESG Analysis in Analyst Compensation
35 Years
Integrating ESG Analysis in Investment Process
11 Years
Winner of P&I Best Places To Work in Money Management
900+ Companies
With Proprietary ESG Ratings
100%
Proxy Voting Record
Annual Update
As a Portfolio Manager and Head of ESG, Mary Jane McQuillen has been central to ClearBridge’s Stewardship and ESG Integration efforts since 1996 and is uniquely positioned to offer a close-up view on the defining trends in sustainable investing as well as the pressing topics addressed in ClearBridge’s ongoing engagements with portfolio companies’ CEOs and CFOs.
2022 delivered a series of firsts that should help improve the integration of ESG factors into the investment process as well as broader conversations around sustainability.
Regulation will remain a key topic for sustainability-minded investors in 2023 as it begins to have a greater impact on how sustainable investing strategies are perceived, evaluated and trusted by investors.
Biodiversity and human and labor rights will continue to grow as a focus for investors and companies, particularly for companies with operations or suppliers in emerging economies.
ESG Milestones
ClearBridge opens first client account using socially responsible investment approach
Approach
The ClearBridge Model for ESG Integration
ClearBridge integrates ESG research by explicitly including it in company research performed by ClearBridge analysts and portfolio managers, who include proprietary ESG ratings and analysis in their investment decision making.
Model 1
Third-party ESG research firm
Model 2
Segregated internal ESG research team
ClearBridge Model
One team integrating ESG and fundamental research
ClearBridge ESG Materiality Framework™
ClearBridge uses a proprietary materiality framework that identifies the key ESG considerations for each sector and subsector under analyst coverage. The framework focuses on the ESG issues that truly matter for each company.
Explore Thought Leadership
Setting Net-Zero Targets
The focus of our approach to net zero is high-touch engagement with portfolio companies on their decarbonization strategies.
Decarbonizing Aviation
ClearBridge has been engaging companies throughout the aviation value chain on decarbonization.
Scaling Up Human Rights Efforts
Research has documented a correlation between managing human rights risks and strong corporate financial performance.
ESG in the Political Spotlight
By integrating ESG analysis into our fundamental research process, we are able to develop a more holistic view of risks and opportunities.
Impact
Engagements
ClearBridge engages companies on a wide range of topics as part of our fundamental research process.
Read MoreClarifying ESG Ratings
We engaged a California utility and an ESG ratings provider, clarifying and ultimately reversing an assessment that the utility was in violation of the UNGC principles.
Climate Change Risk Resilience
We engaged a U.K. water and waste services company to confirm its plans align with its regulator’s targets for environmental improvements in coastal and river waters.
Social Media Safety
We engaged a social media platform and digital advertiser to see measurable progress in addressing responsible online content issues and to assess its growing use of AI.
Protecting Mental Health
We engaged a France-based outsourced customer service company on the ethical treatment of its content moderation employees.
Shifting Strategic Priorities
An engagement with a Spanish wireless telecom company contributed to a shift in capital allocation and strategic priorities.
Board Oversight of ESG
ClearBridge’s voice as a top 20 owner of a managed care provider helped drive governance improvements such as establishing a corporate sustainability function.
Setting Science-Based Targets
As a top 10 owner, ClearBridge engaged a Tier 1 auto supplier on setting science-based emissions reduction targets.
Methane Intensity Reduction
We engaged a natural gas E&P company on its best-in-class methane intensity reduction efforts and its plans to invest in energy transition ventures.
Exploring Beneficial Reuse
Feedback from shareholders like ClearBridge has helped a commercial cleaning services company end outsourcing waste solvent disposal and allocate capital to beneficial reuse projects.
Building a Circular Economy
We engaged a footwear and apparel company on its development of regenerative systems that use waste as feedstock for new products, helping it reach carbon and waste goals.
Improving Disclosure
As a top 10 owner, we engaged a leading fragrance company on its disclosure and reduction of PFAS in its products.
Phasing Out PFAS
ClearBridge engaged a cosmetics and skin care company on how the EU’s expanded definition of PFAS might affect its commitment to phasing out PFAS in its products.
Furthering the U.N. Sustainable Development Goals
Active public equity ownership can further the 17 U.N. SDGs. Even considering how just one ClearBridge holding from each sector can meet the goals’ underlying targets suggests active ownership can have an impact.
Proxy Voting
Of the tools public equity investors may use to advocate for sustainable business practices, proxy voting is one of the more visible and powerful. ClearBridge’s commitment to this practice is evidenced by our 100% proxy voting record.
Governance
56%
Environmental
12%
ClearBridge 2022 Proxy Votes by Category
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