Section Heading
Corporate Responsibility
Report
2009
i
Contents
Introduction 01
Overview of Schroders
02
Corporate Responsibility 04
Marketplace 06
Workplace
13
Environment 18
Community
22
Contact details
24
Introduction
Corporate responsibility is
not a peripheral activity for us
When we created our Corporate
Responsibility Committee three years
ago, we recognised that sustainability is
becoming increasingly important not only
to our clients, but also to our employees,
investors and the community at large.
With a heritage of over 200 years and
stable ownership throughout the period,
Schroders has always understood its nonfinancial obligations to society. Corporate
responsibility is not a peripheral activity
for us; we have put policies and activities
in place to ensure that the Group acts in a
socially responsible way in its day-to-day
operations and we encourage employees
to do the same.
As an asset manager, we seek to achieve
financial returns for our clients that meet
their investment objectives. Analysing
the social responsibility activities of those
companies in which we invest has a part to
play in achieving those returns. As a result,
we are not only concerned with our own
corporate responsibility activities, but we
also monitor the activities of the companies
in which we invest. Companies who
operate at an environmentally and socially
sustainable level are also more likely to
deliver long-term shareholder value.
We recognise fully the importance of
climate change and this year we are
pleased to report that our Global Climate
Change Fund was named ‘Best Climate
Change Investment fund’ at the 2009
Climate Change Investment Awards run
by Incisive Media in conjunction with
Holden & Partners. We were one of the
first asset mangers to launch such a
fund in 2007, and continue to believe that
climate change will be the main driver of
industrial change over the next 20 years.
We also apply these principles of
reviewing climate change and monitoring
our carbon footprint to our business.
After introducing a system for monitoring
CO2 emissions two years ago, we have
seen our CO2 output decrease by 10 per
cent. for our London offices in 2009. We
continue to research new ways to reduce
this further for the future.
Our London head office was awarded the
Gold Award in the City of London’s Clean
City Scheme, placing us in the top 100 out
of 1,400 buildings in the scheme which
promotes the principles of reduce, reuse
and recycle.
Alan Brown
Chief Investment Officer
Chairman of Corporate Responsibility Committee
Director Schroders plc
We are committed to continually
measuring our progress, both absolutely
and through benchmarking against
external performance, as well as engaging
with our stakeholders to ensure we meet
their expectations. Operating worldwide
from 32 offices in 25 countries provides us
with a significant challenge. We recognise
that the importance of sustainability can
vary between cultures and a key priority
will be to ensure that we continue to work
together, across all our global operations,
in creating a long-term sustainable future.
At Schroders, asset management is our
business and our goals are completely
aligned with those of our clients – the
creation of long-term value.
A diverse product range:
£167.9 billion funds under management
Multi-asset 16%
Private Banking 8%
We manage £167.9 billion on behalf
of institutional and retail investors,
financial institutions and high net
worth clients from around the world,
invested in a broad range of asset
classes across equities, fixed income
and alternatives.
We employ more than 2,600 talented
people worldwide, operating from 32
offices in 25 different countries across
Europe, the Americas, Asia and the
Middle East, close to the markets in
which we invest and close to our clients.
Equities 47%
Fixed income 16%
Alternatives 13%
Worldwide offices:
Schroders has developed under stable
ownership for over 200 years and longterm thinking governs our approach to
investing, building client relationships
and growing our business.
We adopt the same approach to
Corporate Responsibility.
As at 31 March 2010.
Bermuda
Cayman Islands
Mexico City
New York*
Philadelphia*
More information can be found online at www.schroders.com
2
* Investment centres
Overview of Schroders
Asset Management:
Private Banking:
Equities
£79.5bn (2008: £44.1bn)
Multi-asset
£26.8bn (2008: £18.6bn)
Fixed income
£26.9bn (2008: £14.3bn)
Alternatives
£21.0bn (2008: £14.7bn)
Asia Pacific
Emerging markets
Europe
Global
Quantitative equities
UK
US
Equities
Fixed income
Private equity
Property
Structured products
Aggregate and
multi-strategy
Government
Global
Investment grade credit
High yield
Tax-exempt
Cash/liquidity
Commodities
Currency
Emerging market debt
Funds of hedge funds
Private equity funds of
funds
Property
Amsterdam*
Copenhagen
Frankfurt
Geneva*
Gibraltar
Guernsey
Jersey
London*
Luxembourg
Madrid
Milan*
Paris
Rome
Stockholm
Zurich*
Dubai*
Beijing
Hong Kong*
Jakarta*
Seoul*
Shanghai*
Singapore*
£13.7bn (2008: £11.4bn)
Advisory and discretionary
asset management
on behalf of high net
worth individuals and
family offices
Cash management
Custody and execution
services
Deposit taking
Specialised lending
Sydney*
Taipei*
Tokyo*
3
Our core values
Schroders has a long-standing commitment to
sustainability, maintaining consistently high standards
in all areas of corporate responsibility.
We seek to:
–Attract and develop the best people;
–Reduce our environmental footprint;
–Support the communities in which we operate;
–Be transparent in our operations and reporting; and
–Encourage and support these principles in the
companies in which we invest.
Schroders is an index component of both the Dow
Jones Sustainability World Index and the Dow Jones
STOXX Sustainability Index. We are also included in
the FTSE4Good Index, which is designed to identify
companies that meet globally recognised corporate
responsibility standards. As a major investor, we
recognise that how we behave can influence other
companies.
k
wo
r
am
Pa
ss
Inno
vati
on
Te
io
n
y
grit
Inte
Our Values
Excellence
together
We work as a team to
create value for our clients.
4
Corporate Responsibility
Our stakeholders, with whom we maintain an
ongoing dialogue, include shareholders, clients,
employees, regulators, non-governmental
organisations, the wider community and companies
in which we invest. We endeavour to develop close
relationships with all stakeholders. Our behaviour is
influenced by our core values:
Integrity: We are honest, open and uncompromising
in our commitment to our standards. We welcome
the responsibility that comes with the trust our
stakeholders place in us.
development of Schroders’ policies on corporate
responsibility and their implementation throughout the
Group as we look to embed corporate responsibility
principles in all our activities and culture.
Our approach to corporate responsibility is built
around four main areas:
–Marketplace;
–Workplace;
–Environment; and
–Community.
Passion: We share a deep rooted belief in what we
do. We demonstrate this through the dedication,
enthusiasm and energy we bring to our work.
Innovation: We challenge the established way
of doing things and seek to anticipate future
developments.
Teamwork: We work as a team to create value for our
clients. We value the contribution of individuals and
encourage healthy debate.
Excellence: We strive to deliver the best and
continually look for ways to improve.
Governance structure
The Board is responsible for corporate governance
and corporate responsibility within the Group. Alan
Brown, Group Chief Investment Officer, chairs the
Corporate Responsibility Committee that oversees all
employee, environmental and community involvement
issues. This Committee is responsible for the
5
Marketplace
Responsible Investment
As a fund manager, the direct environmental and social
impacts that we have are relatively small in comparison to
other sectors. It is through our investment activities that
we have the greatest environmental and social impacts.
During the investment process, we have a responsibility
to take into account the environmental, social and
governance (ESG) performance of the assets we invest
in and we endeavour to be responsible investors when
exercising our duties to our clients.
Schroders has operated a responsible investment (RI)
policy for over a decade. We became a signatory to
the UN Principles of Responsible Investment (UNPRI)
in 2007 which we believe reflected the policies and
processes that we already had in place. In applying
these to our business, we aim to help clients align both
their responsible investment and financial objectives.
Equities
Schroders believes that an analysis of ESG issues and
their impacts on investments is a fundamental part
of the stock valuation and selection process. ESG
analysis provides a greater understanding of the quality
of the company and its management.
Specific ESG issues can also potentially impact a
company’s reputation and share price, for example,
labour standards in the supply chain. They can also
have a direct impact on operating costs, for example,
the impact of the EU Emissions Trading Scheme for
electric utilities.
Our analysis allows us to integrate ESG considerations
into the investment process and to inform our
engagement and voting activities.
Integration
Integration has always been an implicit part of our
investment process. However, in 2009 we have
developed processes for capturing these views
explicitly throughout our global equity range. This work
is undertaken by the company analyst and supported
by our ESG specialists. The company analyst has
discretion as to how ESG information is integrated into
financial fundamentals.
An example is provided by sector analyst James
Gautrey below:
...“I try to think whether any of these [ESG] factors
will actually impact the price investors will be willing
to pay for that stock i.e. its fair market value. If
necessary, I might then make a subtle adjustment
to the fair value to reflect this. So, for an emerging
market stock with poor governance and/or reporting
standards, the lack of transparency and proper
management practices should mean it trades at a
discount to identical peers which do not share the
same problems.”
Regional teams have developed different ways
of assessing the ESG performance of the stocks
in their coverage. Schroders has always had an
entrepreneurial approach to investment and we
encourage our managers to implement processes
and structures that are suitable to the markets in
which they operate. Some teams have developed a
simple rating process, whilst others have preferred
to adopt more qualitative processes, without ratings.
ESG information is captured on our proprietary internal
information systems, alongside all internal company
and sector research.
ESG coverage by desk
Region
Responsible
Investment
Process
Companies
with an ESG
investment view
No. of Companies in
investment universe
(with financial rating)
% of investment
universe with
ESG rating
Large Cap
6
UK
Integration / Engagement
50
214
23
Continental Europe
Integration / Engagement
34
159
21
North America (US)
Integration
65
270
24
Latin America
Integration
70
103
68
Pacific Ex Japan
Integration
8
75
11
Japan
Integration
185
221
84
Emerging Asia
Integration
252
328
77
Eastern Europe, Middle East
and Africa (EMEA)
Integration
151
163
93
Global
Integration
67
Undefined universe
N/A
Marketplace
Engagement
At Schroders, we use the term ‘engagement’ to refer
to those instances where we are engaging specifically
with companies on ESG issues to monitor the ongoing
corporate responsibility and corporate governance
(CG) performance of a company. This analysis helps
us to fill gaps in our analysis, as well as allowing us to
make suggestions for change if a company’s corporate
responsibility or corporate governance performance is
below acceptable standards.
We also monitor the reasons behind engagement,
whether they are investor or company led.
Investor-led engagement refers to instances where we
have initiated contact. This is as a result of our own
internal analysis or collaborative engagement projects.
Company-led engagement is where a company
has approached us, or is presenting its corporate
responsibility performance to the market.
We also monitor engagement related to voting on
a shareholder resolution at a company’s AGM that
relates to environmental or social issues.
The graph below provides a review of our engagement
activity on environmental and social issues. The
increase in engagement since 2004 reflects the
extension of our SRI engagement programme from a
UK focus to a Pan-European focus.
Voting
Schroders takes its responsibility as an institutional
shareholder seriously, and looks to make use of voting
rights in line with our fiduciary responsibilities, in the
interest of our clients.
We vote on any proxy requests relating to companies
listed in the UK or outside the UK and for non-UK clients
on proxy requests relating to the following securities:
–the largest 500 International (non-UK) holdings
by value;
–the largest 300 UK holdings by value;
–European smaller company and Japanese holdings
where Schroders holds above 5 per cent. of equity
market capital; and
–securities which local regulations require to be voted.
In 2009, Schroders voted for 46,410 resolutions at
5,022 Annual General Meetings/Extraordinary General
Meetings worldwide, 626 (12 per cent.) in the UK and
4396 (88 per cent.) overseas.
Schroders Global Voting Records 2009
UK
Total
Total resolutions
voted on:
For
Pan-European RI engagement activity
undertaken by ESG specialists since 2000
UK Overseas Overseas
% of
% of
Total
Total
Against
Total Resolutions
5,974
17
30,190
83
36,164
265
3
9,981
97
10,246
6,239
13
40,171
87
46,410
Number of engagement occurrences
00
8
5 3
01
23
02
12 2
29
03
33 1
16
04
33
30
05
06
09
41
30
07
08
24 1
48
60 2
32
11
46 2
51
28
59
■ Investor Led ■ Company Led ■ Voting
7
Environmental and social shareholder resolutions
Of these resolutions, less than one per cent. was
specifically on social, environmental and ethical issues.
As in previous years, most of these were tabled at the
AGM’s of US companies.
Voting decisions made by the RI team are decided
based on:
–whether the resolution will benefit shareholders;
–an analysis of the purpose and quality of the
resolution;
–the level of public disclosure or transparency of the
company; and
–whether there have been historical voting actions
on the same issue and how we voted in the past.
A breakdown of our voting record in this area is
provided below.
The number and subject of resolutions varies each
year due to changes in our investment strategies
altering the types of companies in which we invest.
In 2009, labour standards and equal opportunities
remained the greatest area of concern for
shareholders, with a high number of resolutions.
Resolutions on climate change and greenhouse gases
were also popular, reflecting ongoing shareholder
concerns about the risks and opportunities that
climate change presents to companies. There was
also a rise in health care resolutions due to the public
policy reform in the USA, and ongoing demands for
improved disclosure on CR issues. Finally, ethical
resolutions on animal welfare and testing are a
trend since 2005, and reflect the use of shareholder
resolutions by animal welfare campaign groups. A full
breakdown of the issues on which we have voted is
provided in the table opposite.
Schroders’ International voting record from
2000-2009 on SRI shareholder resolutions
(number of resolutions voted on)
Number of resolutions
00 9
28
01 9 2
02
62
15 1
03
37
27
04
05
8
55
35
17
7
8
06
70
38
07
08
09
85
8
49
77
9
28 3
64
61
41 2
56
■ For ■ Abstain ■ Against
We believe that climate change
will be the main driver of industrial
change over the next 20 years.
8
Marketplace
Breakdown of Social, Environment and Ethical (SEE) voting issues
Issues
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Animal Testing/Welfare
8
8
13
14
18
4
1
0
0
0
Genetically Modified Organisms
1
2
3
6
6
5
2
5
5
3
Weapons
5
2
5
5
6
9
4
0
3
2
Tobacco
5
2
3
8
5
8
7
2
4
0
Miscellaneous
0
0
0
0
0
0
4
0
1
1
Ethical
Environment
Toxic Chemicals
0
1
3
3
3
5
3
2
4
0
Greenhouse Gases & Climate Change
15
12
14
7
5
12
6
2
2
0
Renewable Energy & Energy Efficiency
0
1
1
5
0
5
5
3
4
1
Nuclear Power
3
8
10
7
4
12
12
3
4
1
Access to Protected Areas
0
1
1
3
2
2
0
3
2
2
Environmental Policy/Programme
0
1
0
3
1
1
2
5
3
2
Forestry
2
0
0
1
1
1
2
1
0
0
Miscellaneous
8
2
6
1
1
3
1
0
0
3
Equal Opportunities
16
12
13
12
7
10
9
6
9
5
Labour Standards
12
27
22
25
16
13
16
16
17
7
HIV/AIDS
0
0
0
1
4
8
2
0
0
0
Drug Pricing/Access
0
0
1
0
7
5
1
4
6
4
12
3
2
0
0
0
0
0
0
0
Health & Safety
3
3
3
3
1
3
1
0
1
0
Pay Disparity
1
0
3
1
1
3
2
0
0
0
Miscellaneous
2
2
5
9
2
7
4
0
2
1
Corporate Social Responsibility/Social
Environment Ethical/Sustainability Report
6
4
11
8
3
5
3
0
0
0
Link pay to ESG
0
0
2
1
1
2
1
0
1
0
Miscellaneous
0
1
1
0
1
4
2
1
5
5
99
92
122
123
95
127
90
53
73
37
Social
Health Care
Other
Total number of resolutions voted on
9
Thematic
Schroders Global Climate Change Fund
Schroders launched the Global Climate Change Fund
in June 2007. It has delivered outperformance against
the MSCI World Index, shown in the graph opposite,
since inception to 31 December 2009 and was named
‘Best Climate Change Investment fund’ at the 2009
Climate Change Investment Awards.
We believe that climate change will be the main
driver of industrial change over the next 20 years.
The investment strategy of the fund is to invest in
companies that stand to gain from efforts to abate
climate change emissions or to adapt to changing
climatic conditions. This view is supported by the
accelerating pace of national and international
policy action on climate change, which is creating
a favourable medium and long term outlook for
companies involved in efforts to mitigate or adapt to
climate change. The Stern Report (2006) states that to
avoid an average global warming of 2oC or more by the
end of the century, emissions per unit of GDP need to
be cut to 25 per cent. of 2006 levels by 2050.
Our internal research expertise identifies companies
that are benefiting from efforts to mitigate greenhouse
gas emissions or adapt to a changing climate.
Currently, about 80 per cent. of the fund is invested
in companies emphasising mitigation, and 20 per
cent. of the fund invested in companies emphasising
adaptation.
Mitigation investments, mainly driven by policy and
legislation, include companies involved in clean
energy, energy efficiency, low-carbon energy and
sustainable transport.
Adaptation investments include companies exposed
to investments in water management, agricultural
productivity and forestry. The impacts of adaptation
are deemed to be slightly longer term in nature,
although adaptation investment needs to be made
now to reduce costs in the long run.
Schroders Global Climate Change Fund
performance since inception** versus the
MSCI World Index
120
100
80
60
40
20
0
Jul
07
Dec
07
Jul
08
Dec
08
Jul
09
Dec
09
–– Global Climate Change Fund –– MSCI World Net Dividend Reinvested
Source: Schroders, Bloomberg. *ISF Schroder International Selection
Fund. Performance shown is the “I” share institutional share class net
of all management fees. NAV to NAV (Bid to Bid). The Index is the MSCI
World Net Dividends Reinvested. **Inception date 29th June 2007.
Ethical FUM
Schroders provide screening services for some of its
clients based on their specific investment criteria. This
could involve excluding stocks based on moral issues,
such as tobacco, alcohol or pornography, or on issues
such as labour rights breaches or environmental
contamination. The following table shows total ethical
funds under management (FUM) since 2005 and the
proportion that this represents of Group FUM.
Ethical FUM using December Year End data
Year
Ethical FUM (£bn)
Percentage of overall Group FUM
2009
3.8
2.6
2008
3.7
3.3
2007
6.0
4.4
2006
4.2
3.3
2005
4.5
3.6
Pooled funds
In addition to ethical FUM of £3.8bn which are actively
screened, in 2009 we also had another £4.8bn of FUM
which are ‘monitored’ for their exposure to companies
with investments in Sudan. Where it is not always
possible to exclude companies from funds, for legal
and financial reasons, clients have instead chosen to
be informed of their exposure on a regular basis.
In May 2009, Schroders launched its first religious
pooled Syariah fund in Indonesia. The investment
objective of the Schroder Syariah Balanced Fund is to
provide potential for capital growth through exposure to
a multi-asset portfolio comprised of Syariah-compliant
equities, Islamic bonds (Sukuk), and Syariah-based
money market instruments, in accordance to the Islamic
principals in the capital market.
10
Marketplace
Industry involvement
In addition to implementing responsible investment
practices, we also promote and support them actively
at industry level. We speak at, host or attend industry
events and, in 2009, events have covered a wide range
of subjects including, human capital management,
health and safety, sustainable consumption,
ecosystem services, water and climate change.
We are involved in the following initiatives:
Initiative
Description
UK Sustainable
Investment and
Finance Forum
European Social
Investment Forum
Corporate
Leaders Group on
Climate Change
– Copenhagen
Communiqué
Institutional Investors
Group on Climate
Change
UKSIF’s aim is to ensure that the UK finance sector is the world leader in
advancing sustainable development through financial services. (www.uksif.org)
2000
EUROSIF is a pan-European group whose mission is to Address
Sustainability through Financial Markets. (www.eurosif.org)
The Copenhagen Communiqué was a statement from the international
business community ahead of the UN Copenhagen climate change
conference in December 2009. It set out the business case for taking
progressive policy action on climate change and urged global politicians to
adopt these measures. (www.copenhagencommunique.com)
Schroders was a founding member of the IIGCC, which was established to raise
awareness amongst institutional investors about the risks and opportunities
presented by climate change, as well as encourage improved corporate
disclosure on the issue and to engage with policy makers (www.iigcc.org)
The CDP was established to encourage increased disclosure on corporate
climate change strategies. Schroders has been very actively involved in the
CDP, as a special adviser, signatory and participant. (www.cdproject.net)
Recognising the serious implications of water scarcity to economic growth
and sustainable business and the current lack of awareness and focus
on the issue the WDP was established to encourage increased disclosure
on this. Schroders has been actively researching the implications of water
scarcity since 2007 and became a signatory to this initiative in 2009, when
it was established. (www.cdproject.net)
The Forest Footprint Disclosure Project (FFD Project) is a new UK
government-supported initiative, created to help investors identify how an
organisation’s activities and supply chains contribute to deforestation, and
link this ‘forest footprint’ to their value. Schroders was an original backer of
this initiative. (http://forestdisclosure.com/)
The UNPRI are in essence a set of principles encouraging best practice in
responsible investment. Schroders became a signatory to the UNPRI in 2007
(www.unpri.org)
The Finance Lab is a collaborative initiative that aims to re-think the financial
system and take practical action to stimulate transformational change, so
that finance serves the interests of society and the environment. Schroders
has lent its support to this WWF initiative since its inception in 2009.
2005
Carbon Disclosure
Project
Water Disclosure
Project
Forest Footprint
Disclosure Project
UN Principles for
responsible
Investment
The Finance Lab
Year joined
2009
2003
2007
2007
2009
2007
2009
11
Marketplace
Property
Our Property investment process incorporates a review
of the environmental and social factors concerning
both the properties we own and manage directly, and
the properties we invest in indirectly through third party
funds. We believe that factoring corporate, social and
environmental responsibility considerations into the
design, construction and operation of buildings can
increase their long term market value and improve
investment performance whilst reducing our tenants’
operational costs. Through careful management of
these issues, Schroders can also reduce exposure to
the risks of adverse publicity, as well as staying ahead
of emerging legislation in real estate on properties that
we manage.
Energy Performance Certificates were introduced as
a first step in the UK government’s target of reducing
greenhouse gases by 80 per cent. by the year 2050.
The most immediate legislative requirement facing
property owners is the introduction of the Carbon
Reduction Commitment Energy Efficiency Scheme
(CRC), a new mandatory emissions trading scheme to
improve energy efficiency and reduce the amount of
carbon dioxide emitted.
CRC will affect large electricity and gas consumers
who will be required to participate in the scheme,
monitor their emissions and purchase allowances
sold by the Government, for each tonne of CO2 they
emit. This new legislation makes it clear that property
investors would be failing in their fiduciary responsibility
if the energy efficiency of property assets was not a
key consideration when making buy or sell decisions.
12
Direct Management
Most of Schroders’ property assets are directly owned
and our property team has focused on sustainability
issues for several years. These include reviewing
the impact on the environment from site pollution,
strategies to clean up and reposition Brownfield
sites and focusing on matters relating to climate
change. The team also works with the occupiers
of our buildings on waste recycling, lower energy
consumption and water conservation to reduce the
environmental footprint of our buildings.
We participate in an external benchmarking service
which measures sustainability factors in Schroders’
UK property funds against a universe of properties
owned by other institutional investors. Factors include
energy efficiency, water efficiency, recycling and
risk of flooding. The results were presented at our
Sustainability Awards ceremony, an annual all-day
event that brings together our fund management
teams, partners and service providers, to focus on
sustainability and climate change issues that could
impact investment performance across our portfolios.
Reporting
We have a separate Responsible Property Investment
(RPI) policy that outlines our role and responsibilities as
owners, managers and developers of property assets.
We are developing further our reporting systems to allow
formal monitoring of our performance on key RPI issues.
We continue to formalise our investment practice into
policy statements, but our approach remains focused
on delivering on-site solutions to achieve our clients’
objectives effectively. Through our membership of
industry bodies, we also continue to lobby for greater
reporting standardisation against a backdrop of
competing benchmarks, questionnaires and voluntary
codes that may often conflict with regulations.
Workplace
Workplace
Schroders has more than 2,600 employees across
32 offices in 25 countries. Our aim is to be an employer
of choice wherever we operate and one of our strategic
priorities is to develop, manage and retain our talented
people in order to deliver to our potential.
We work to ensure that our employee policies and
procedures reflect best practice within each of the
countries where we operate. For us, this means
having policies and practices that make Schroders
an attractive place to work and which encourage our
employees to act ethically and to be aware of and
participate in the wider community. It also means
ensuring that our employees understand the strategic
aims and objectives of the Group, are clear about their
role in achieving them, as well as being aware of and
participating in the wider community.
We seek to ensure that our workforce reflects, as far
as practicable, the diversity of the many communities
in which we are located. We also recognise the
diverse needs of our employees in managing the
responsibilities of their work and personal lives, and
believe that achieving an effective balance in these
areas is beneficial to both the Company and the
individual. Wherever possible, we will look to offer a
flexible approach to determine when, where and how
work can be done.
Gender Breakdown
Male 56%
Female 44%
Length of Service (years)
10+
399
5-10
481
3-5
492
1-3
<1
905
226
Age Profile (years)
50+
217
40-50
708
investing
together
35-40
566
30-35
25-30
593
350
<25 69
...in o
13
Communication
We communicate with all UK employees worldwide
through multiple channels, via email, the Group
intranet, a quarterly magazine, ‘Inside Schroders’,
and a monthly newsletter, ‘Success Inside Schroders’.
We also use all employee meetings, ‘Inside Schroders
Live’, to facilitate the exchange of views with senior
management and discuss the Group’s progress in
meeting its objectives.
Money
In the UK we have an Employee Consultation Forum
consisting of employees elected by their peers, who
meet regularly with management to discuss jointly
employee-related matters. This Forum also provides
feedback and recommendations to the senior
management team.
Give As You Earn (GAYE)
Remuneration
Our approach to remuneration is consistent with
our ambition to be an employer of choice. We have
developed flexibility to enable our employees to
personalise elements of their remuneration package to
suit their own needs and ambitions.
We recognise that individuals have different personal
requirements dependent on where they are in both
their life stage and career. We use a flexible benefits
scheme, ‘Flex’ in the UK, to complement our goals of
attracting, retaining and developing the best people,
which allows UK employees to personalise the
remuneration and benefits that they receive.
Defined Contribution Pension Scheme
Group Life Assurance
Personal Accident Insurance
Group Income Protection
Share Incentive Plan (SIP)
We offer a defined pension contribution rate for
UK employees at a core level of 14 per cent. of
pensionable salaries. If employees make a further 3
per cent. contribution then this will be matched by
a further 3 per cent. contribution from Schroders.
This allows employees to receive a 20 per cent.
pension contribution at a personal cost of only 3 per
cent. Pension arrangements in other locations are
dependent on local market practice.
Flex also offers the opportunity for employees to
invest up to £125 per month in Partnership shares
in Schroders plc, with a matching contribution from
Schroders of up to £50 per month. We also offer
UK employees the opportunity to make charitable
donations which are again matched up to a maximum
of £200 each month.
We recognise that individuals
have different personal
requirements dependent on
where they are in both their
life stage and career.
14
Workplace
Work
Ride2work scheme
The Ride2work scheme provides UK employees with
the opportunity to hire a bicycle and associated safety
equipment for 12 months, free of tax and National
Insurance, provided that all the equipment is used
mainly for journeys to work.
Life
Holiday
Medical care scheme
Dental insurance
Childcare vouchers
MyDiscounts
We recognise the importance of ensuring that the
work/life balance of our employees is appropriate.
Employees are given the opportunity to buy or sell a
maximum of five days holiday each year or to ‘roll-over’
five days holiday if they have been unable to utilise
them during the year.
Recruitment
We operate an Employee Referral Scheme that is
designed to attract the best candidates by providing
a financial reward to current permanent employees for
introducing new recruits to Schroders.
We believe that we provide one of the most
comprehensive training programmes in the fund
management industry, offering a range of opportunities
for graduates to join our Investment, Distribution and
Infrastructure divisions. Structured in-house training is
combined with a wide range of external courses and
study for professional qualifications. The result is a
well-rounded scheme that develops both professional
skills and personal effectiveness, equipping our
employees to play a key role in driving our future
business success.
After a successful graduate milkround at selected
UK universities, we received a record number of
applications for the 2010 graduate programme.
16 graduates have been hired to join the Company
in August 2010, 14 of these based in the UK and two
who will join the inaugural Asia graduate programme.
Schroders offers annual internships where students
work in the London office for eight weeks, undertaking
specific projects and learning about the asset
management business. Successful interns are then
considered for places on the graduate programme.
Medical care, dental care and childcare vouchers
options are also available to provide our UK employees
with the flexibility to match the composition of their
remuneration to their personal circumstances.
‘My Discounts’ is a scheme available to UK employees
which offers exclusive savings on national and local
clothing and accessory brands, as well as tickets.
15
In August 2009, we also held a work experience
day for 15 to 18 year olds, to provide an insight into
career opportunities within Financial Services. 50
students attended and enjoyed an interactive day of
presentations, business games and careers advice
delivered by Schroders employees.
Personal Development
Our performance management process consists
of an annual performance appraisal against agreed
objectives and our core values. The performance
process is used to inform decisions on remuneration,
career development and progression.
We have also partnered with the Financial Services
Skills Council (FSSC) to offer specialist advice
on how to increase awareness of roles within the
financial services sector. We have provided input into
‘Directions’, an online careers information portal where
young people can access information on the range of
careers available to them within Financial Services.
We use a global performance management system
designed to support all employees and managers
through the key stages of the performance
management cycle. The system provides a defined
structure to ensure that career development is
approached in a consistent and structured manner.
Over the course of the year, we encourage review and
tracking of progress against objectives.
Learning & Development
In creating a high performing organisation, we recognise
the importance of encouraging all of our employees to
learn, develop and fulfil their potential. We are dedicated
to providing our employees with the opportunities and
experiences they need to achieve their potential and
grow their knowledge, skills and capabilities. Our aim
is to provide products and services to support our
employees in identifying their development needs and
determining an action plan to meet them.
To assist in achieving this goal and promoting our core
values, we have a ‘stages of development’ framework.
This allows individuals to identify how they should be
demonstrating our core values within four key areas of
competence at each stage of their career. An internal
learning schedule is also available to all employees,
offering a wide range of opportunities to assist in
development needs and meeting goals.
Schroders has continued its partnership with
Inmarkets to deliver online training via the Fincarta
platform. This ‘e-Learning’ platform offers a
comprehensive library of online courses on finance,
regulation and IT topics. Access to the e-Learning
portal is given via the internet, allowing content to be
viewed globally, including via home computers.
Through our Educational Assistance Policy, we
encourage all of our people to complete professional
qualifications relevant to their role. In recognition of the
employee investment in achieving such qualifications,
we offer competitive educational assistance, which
includes provision of financial support and study leave.
We have introduced a sales development programme
that focuses on providing our client-facing employees
with a formalised framework for the development
of core skills. The programme will involve all clientfacing employees, of all levels of experience, globally,
incorporating sales, product and relationship
management roles.
Our key goal is to maintain market-leading standards
and to ensure that these are applied across our
global network consistently. This framework will also
provide the basis for our recruitment and induction of
new employees.
16
Progression and Recognition
Schroders is committed to internal progression to
ensure that we retain our most talented people.
We have a global role-based title structure to
provide career paths to help our people develop
and progress. In addition to strengthening the
performance culture of the Group, the structure
ensures greater flexibility for employees to move
into new roles, taking on more responsibility as
opportunities arise, reinforcing our meritocratic
approach. All role descriptions are accessible on
the intranet so that employees can gain access
to information regarding the skills and experience
required to undertake each role within the Company.
Diversity
We are committed to providing equal opportunities
and we seek to ensure that our workforce reflects
the diversity of the many communities in which we
operate. Our culture values diversity, harnessing
individual strengths and differences to surface the
best ideas and insights. We recognise that through the
attraction and retention of a diverse workforce we are
better able to understand the needs of all our clients.
A flexible working policy has been developed to
recognise the diverse needs of employees in managing
the responsibilities of their work and personal lives.
We believe that achieving an effective balance in these
areas is beneficial to both the Group and the individual.
Our flexible working policy is open to all permanent
employees with more than 26 weeks’ service.
Flexible working arrangements offer broader scope to
determine when, where and how work can be done.
We do not believe that hours of attendance constitute
the only measure of an employee’s contribution. We
know how important it is to measure outcomes and
results. Whilst flexible arrangements are not suitable
for all roles, rethinking the way work can be done
and allowing employees to balance their multiple
commitments can improve productivity, provide
extended hours of service and help recruit and retain
quality employees.
Workplace
It is the Group’s policy to give full and fair consideration
to applications for employment from disabled persons,
having regard to their particular aptitudes and abilities.
For the purposes of training, career development and
progression, we seek to ensure that disabled employees,
including those who became disabled during the course
of their employment, are treated on equal terms with
other employees. We have in place formal policies to
address harassment and bullying, and which document
our commitment to ensuring our employees are treated
with respect and dignity whilst at work.
A sabbatical policy has been implemented to enable
employees, with three or more years continuous
service, to take an unpaid leave of absence of up
to 12 months. Examples of where sabbaticals may
be granted include educational leave, to take up a
temporary post in public service (including a charity)
or extended travel for two months or more.
High ethical standards
We actively promote high ethical standards. Concerns
about behaviour or decisions that are perceived to
be unethical can be raised by employees through our
internal ‘whistleblowing’ process. Personal securities
trading by employees is also regulated. Employees
are not permitted to solicit or accept any inducements
which are likely to conflict with their duties. Training is
provided in relation to these issues and in relation to
money laundering, terrorist finance, data protection
and treating customers fairly.
Health and safety
The health and welfare of our people are very
important to us. We promote high standards of health
and safety at work and have a globally implemented
health and safety policy, which we expect all
employees to follow. This highlights our commitment
to ensuring employees are provided with a safe and
healthy working environment.
Gym facilities are also provided at our head office in
London to encourage employees to enjoy a healthier
lifestyle. Similar healthcare arrangements are also
offered in many of our overseas offices.
In our London offices, a Sports and Social Committee
organises monthly events, open to all employees. There
are a number of sports teams which play throughout
the year, including football, hockey and basketball as
well as social events, such as cookery lessons, theatre,
museum tours and team quiz events.
We recognise that workplace stress is a particularly
important health and safety issue. We are committed
to identifying and reducing workplace stress and offer
workplace counselling and occupational health doctors
to provide specialist advice on stress management.
We appreciate that individuals may, at different times
in their lives, have various sensitive issues that they
may need help with. In order to give support where
we can, Schroders offers a confidential counselling
helpline in the UK. This provides employees and their
dependants with access to a 24-hour, confidential
counselling helpline service in respect of a variety
of issues including stress, marital, legal or financerelated problems. This service is strictly private and
confidential and there is no individual case feedback
to Schroders.
Future plans
In 2010, our in-house focus will be to provide
employees with the opportunity to develop their
communications, sales and management skills. 18
employees took part in a pilot of the Fundamentals
of Management programme in the autumn of 2009.
The programme aims to develop skills and knowledge
to enable a confident transition from an operational
role to a role including management responsibilities,
and will be rolled out to the rest of the business
throughout 2010.
In the UK, we operate an integrated healthcare
approach whereby our private medical health provider
and occupational health clinics work together to
promote wellness amongst our employees.
We offer the following facilities, without charge:
–VDU eye screening;
–Flu and business travel vaccinations;
–Well Woman & Well Man screening; and
–Private GP services.
17
Environment
During 2009, we continued to make a number of key
improvements to help minimise our environmental
impact. We remain committed to continuous
improvement in this area and to the promotion of
positive environmental practices.
We measure our performance in terms of waste
management, energy usage and water usage. We are
members of Green500, an initiative from the London
Development Agency, which works with organisations
to achieve carbon reduction goals as well as providing,
in the future, independent verification of carbon savings.
Towards the end of 2009 we began the process of
seeking Carbon Trust Standard accreditation and
expect to receive this during early 2010.
Waste management
In 2009, we saw a 42 per cent. reduction in waste
generation in our main London offices, which are
occupied by 50 per cent. of our employees. This
followed the introduction of further recycling initiatives
and employee awareness campaigns during the year.
We aim to recycle or reuse over 90 per cent. of our
waste, and although this year’s performance falls just
short of this we have managed to significantly reduce
the absolute amount of waste we generate.
Waste recycled or used
(per cent)
Waste generated
(tonnes per employee)
2007
2008
2009
91
82
88
0.40
0.23
0.15
We also continue to work in conjunction with charities
and local schools, operating specific recycling
schemes for books, stationery, cooking oil, coffee
grounds, spectacles, mobile phones, batteries and
toner cartridges, all of which are reused or used in
manufacturing of alternative products. Proceeds
from our toner cartridge recycling activities are
used to support overseas development works to
provide clean water, healthcare, emergency relief and
educational supplies.
Schroders was awarded the Gold Award in the City
of London’s Clean City Scheme in 2009. A change
to the scheme rules has meant that, due to the size
of our company, Schroders no longer qualifies for the
Platinum award which we have won for four years
running. The Gold award places us in the top 100 out
of 1,400 buildings in the scheme, which recognises
good waste management and effective recycling.
18
Environment
Energy usage
Our energy usage is one of the most significant direct
impacts that our operations have on the environment.
During 2009, we developed and improved our carbon
management policy. Our ambition is to reduce the
carbon footprint of our London operations by 15 per
cent. by 2012, when measured against our baseline
figure for 2007. To date we have achieved a reduction
in our carbon footprint of 13 per cent.
From January to October 2009 our head office was
supplied with 100 per cent. ‘renewable’ electricity. In
November, we procured a contract for the supply of
electricity that is exempt from the climate change levy
that runs to 31 October 2011.
We have also introduced other initiatives, including
re-usable cups in place of paper vending cups, sharing
of desk top printers, making double-sided printing the
default setting, installing energy efficient lighting, new
technology and controls to reduce our usage of gas
and water and setting our PCs to automatically switch
off overnight. We continually review best practice and
new innovations to implement appropriate energy
efficient solutions and measure the impact of these
initiatives, wherever practical.
In total, energy consumption for 2009 across our
Gresham Street, Gutter Lane and Wood Street offices
has decreased by nine per cent. This reduction
primarily reflects the introduction of more energy
efficient systems and advanced controls, and the
consolidation of space and IT computer systems.
Energy consumption
We use the National Grid Rolling Average, as
recommended by the Department for Environment,
Food and Rural Affairs, to calculate CO2 equivalent
emissions relating to the electricity element of our total
energy consumption.
During 2009 we finalised our programme of space
consolidation and have reduced our space footprint in
the London offices by around 20 per cent. since 2007.
This has contributed significantly to our energy, waste
and water consumption metrics during this time.
Our IT data centres are high users of energy, directly
through the consumption of electricity and indirectly
as a result of the energy used to keep the rooms cool.
We continually assess ways of reducing the energy
loading of these areas and have made significant
progress through the work to consolidate and remove
redundant IT equipment and through increasing the
temperature within our IT rooms. During 2009, work
was undertaken to reduce the number of IT servers
through the use of virtualisation technologies, which
is a technology that allows multiple applications to
exist on a single piece of hardware (the server) without
contention. As a result, we have fewer servers in our
data centre and they are all working more efficiently
than they used to.
MWh
07
11,972
08
11,475
09
10,440
CO 2 tonnes (excluding travel)
07
5,842
08
5,659
09
5,098
19
Water usage (London only)
We are also committed to the efficient use of water
and encourage our employees to conserve water. Our
consumption of piped water in London has reduced
by 12 per cent. in 2009, primarily as a result of water
efficiency initiatives introduced during the year.
Information Technology (UK)
In 2009 we continued to work with our major computer
services provider to ensure a resilient IT environmental
policy. This included monitoring the waste outputs of
all IT processes and investigating techniques to reduce
waste streams whenever possible.
The manufacture of each desktop PC requires over
240 kilograms of fossil fuels, approximately 10 times
the weight of the computer itself. It is important that
whenever possible, all IT hardware is refurbished and
reused once its time at Schroders has ended. All
Schroders PCs in the UK which have been refreshed
have their disk drives wiped clean before being sent
for reuse. Once PC hardware has reached the end
of its life, it is processed for refurbishment or reuse
by a specialist IT equipment recycler. All network
equipment and other hardware is also disposed of in
an ecologically friendly way. Our third party supplier
selection procedure contains an environmental
awareness factor. Since the European Parliament
directive on Waste Electronic Equipment (WEE) was
incorporated into English law in 2005, the emphasis on
the disposal of IT and communications equipment in a
safe and efficient method has become a determining
factor within the tendering process.
Procurement (UK)
Procurement of environmentally friendly goods forms
an increasingly large element of our environment
management programme. When selecting suppliers,
their approach to corporate responsibility forms a key
part of the contract award process, and we continue
to adopt a policy of active engagement with our key
suppliers to minimise the environmental impact arising
from their operations, both on and off site.
Paper and printing (UK)
We work closely with our outsourced reprographics
provider, Williams Lea, to ensure high management
standards minimise the impact their services have on
the environment. During 2008, new presentation covers,
printed on Forest Stewardship Council (FSC) approved
paper were introduced and continue to be used.
In our general office printers and copiers we
use Elemental Chlorine Free paper that is Forest
Stewardship Council (FSC) certified and produced in
an ISO14001 accredited mill.
To aid the reduction in paper usage document
scanning has been enabled on the copiers and we
encourage employees to only print documents where
necessary. The default setting for all desktop printers
has been set to double sided, where possible. Our
consumption of paper used by networked printers
and multifunction photo copier/printers reduced by
27 per cent. in 2009.
In the London offices, the Night-watchman software
programme puts PCs into standby mode after 10pm
each evening, reducing power consumption and
consequently CO2 emissions. We estimate that the
reduction in power consumed is 400kWh for each PC.
Through the Night-watchman IT software programme,
savings in the region of £25,000 to £30,000 and 120
tonnes of CO2 continue to be made per annum.
Our consumption of piped
water in London has reduced
by 12 per cent. in 2009.
20
Environment
Travel
Employees in London travel to work almost entirely by
public transport. Cycle racks, showers and changing
facilities are provided to encourage employees to cycle
to work, as well as our Ride2work scheme (through
Flex), which has seen a 20 per cent. increase in the
number of employees participating in this scheme.
Our travel policy encourages our employees to use
video conferencing as an alternative to business travel
and to reduce our CO2 impact, with our collective
aim to keep our travel down to the minimum level
consistent with supporting and developing our
business. In London we have seen a 39 per cent.
reduction in distance travelled in 2009, compared
with 2008 and since 2007, a 45 per cent. increase in
video conferencing usage. Actions taken to align our
cost base to the more challenging market conditions
throughout 2009 will have contributed positively to this.
Where business travel cannot be avoided, alternative,
more environmentally friendly modes are used in place
of flying, wherever viable.
Communication and engagement
We promote environmental awareness and initiatives
via our Intranet and internal notice boards and seek
feedback from employees wherever possible. We
participate in external performance benchmarking with
organisations such as the Carbon Disclosure Project
and the FTSE Group responsible investment unit.
Our works with the Green500 and Carbon Trust
Standard have allowed us access to best practice
advice, information on furthering our environmental
performance and external verification of the steps we
have taken and benefits derived.
We review the environmental performance of key
service suppliers throughout the year and work closely
with them to minimise the effects our operations have
on the environment.
Events
In 2009, Schroders worked towards making its large
UK events as carbon neutral as possible and compliant
with BS8901 – a British Standard written to encourage
the production of sustainable events, which was
prompted by the forthcoming 2012 ‘first green’ Olympic
games. To be compliant, the event organiser must
engage all stakeholders, such as the venue, caterer
and technical crews, in the planning stages of an event.
They then work together to produce a management
policy, identify issues, create objectives and set key
performance indicators and targets which focus on the
sustainability of all of the event components.
Schroders are proud to be leading the way in corporate
event sustainability and successfully gained BS8901
compliance for six large conferences in 2009, and aim
to increase this for 2010.
21
Community
We encourage all employees to participate in the
community and in civic and charitable causes. We
believe that involvement is valuable to the individual’s
personal development, as well as the community.
Charitable giving
Our charitable giving is focused on employee choice,
with the Group ‘matching’ employee donations
and sponsorship. In 2009, donations totalled £0.6
million (2008: £1.1 million), reflecting the impact of
the challenging market conditions on our profitability.
In 2009, we have focused our efforts on employee
choice, through matched payroll giving and other
matched donation schemes.
22
A number of our offices operate payroll giving
schemes, of which the UK scheme remains the largest,
with 21 per cent. (2008: 19 per cent.) of employees
participating. Charitable donations of £202,000 were
made through this scheme and we again received the
Payroll Giving Quality Mark Gold Award in 2009, which
recognises that over 10 per cent. of employees donate
money to charity via our payroll.
Community
Volunteering
As well as making financial donations, employees are
encouraged to spend time working in the community.
Employees globally are able to take up to 15 hours
paid leave per year to provide volunteer services. A
wide variety of charities are supported this way, as
individuals give their ‘Schroders time’ to charities with
which they have a personal connection.
In London, Schroders is a corporate supporter of the
Hackney Schools’ Mentoring Programme (HSMP),
established in 1996 by the East London Business
Alliance and Hackney Learning Partnerships. Our
employees continue to mentor 14 and 15 year old
students in the London Borough of Hackney with
the aim of increasing students’ self confidence and
improving their academic performance. The intention is
to allow them to gain experience of the working world
and broaden their aspirations.
2009, 30 students from the Elizabeth Garrett School
in Hackney were invited to Schroders to find out more
about the skills necessary to succeed in the City and
to try their hand at an interactive trading game. We
plan to continue supporting the Brokerage in 2010 by
hosting a number of other events for local schools and
community colleges.
Employees have also worked with a homeless
charity in the UK and participated in other voluntary
schemes overseas.
Throughout 2009, we continued to support The
Brokerage, a City-based charity that runs programmes
to help young people living in London’s inner-city
boroughs to understand the opportunities available
to them in the City and Canary Wharf. In November
23
If you have any comments on what we have done so
far or on how we can improve further, then please
email us at cr@schroders.com
For further information, please contact:
Emma Tovey
Head of Corporate Communications
emma.tovey@schroders.com
Meriel Crawford
Communications Support
meriel.crawford@schroders.com
31 Gresham Street, London EC2V 7QA Telephone no: +44 (0) 207 658 6000
24
Photography by Michael Heffernan. w34663