ESG Investment Policy

Protecting our clients,
associates, and stockholders.

As a global investment management firm, we recognize the influence we have on social and environmental issues through our investment portfolios.

The central mission of our company is to help our clients reach their long-term financial goals through a thoughtful, disciplined approach to managing investments. Consistent with that mission, we have an obligation to understand the long-term sustainability of a company’s business model and the factors that could cause it to change. We do this by incorporating environmental, social, and governance (ESG) considerations into our investment process.

PRI

Principles for Responsible Investment
(PRI) signatory since 2010.1

Integrating ESG considerations into our fundamental research has helped the firm identify well-managed companies that are leaders in their industries, more forward-thinking, better at anticipating and mitigating risk, and focused on the long term.”
- Bill Stromberg, President and CEO, T. Rowe Price

Our Environmental, Social, and Governance Strategy

ESG factors comprise a broad spectrum of considerations—positive and negative—that our investment analysts consider in the context of any company, industry, or region of the world. This approach is driven by the following principles:

Collaboration

Companies, investors, and governments all have a role to play in improving corporate disclosures and strengthening the sustainability of business practices over time.

Accountability

Our investment analysts are responsible for assessing the full range of factors likely to have a meaningful impact on the company’s performance, and they receive specialized resources and training to enable them to make these assessments.

Fundamental Research

ESG analysis and engagement are most effective when led by experienced investors who know the company well and are best positioned to evaluate these considerations in the appropriate context.

Stewardship

Our responsibilities as diligent investors do not cease with the decision to purchase a security. We maintain regular dialogue with the managements of our portfolio companies.

Materiality

We focus on the ESG factors we consider most likely to have a material impact on the performance of the companies in our clients' portfolios over our investment time horizon.

Engaging with portfolio companies in a variety of ways.

When engaging with companies, we consider and analyze proxies and voting positions. Assessing a broad range of investment concerns (including environmental and social issues) is integral to our investment process.

Based on this view, our interactions are driven by portfolio management and supported by the expertise of our industry-focused analysts and our in-house specialists in corporate governance and sustainability. Our priorities in these efforts are tightly connected to our investment views on a company, so we conduct our company-level engagement activities privately. In contrast, we tend to collaborate with other shareholders on policy-level concerns, such as advocating with regulators for better disclosure or stronger shareholder rights.

In our view, the following questions are investment issues:
  • Who represents shareholders on a company’s Board?
  • What drives the executive incentive program?
  • How robust are shareholders’ rights at the company?
  • How is the company managing its environmental risks,human resources, facilities, stakeholder relations, and long-term access to critical resources?

Two Primary Levels of Engagement

After many years of dialogue with management and Board members of the companies in our clients’
portfolios, T. Rowe Price’s practice has focused primarily on two distinct levels of interplay.

Light Engagement

High number of brief interactions.

Fewer resources devoted to each encounter.

Heavy Engagement

Low number of intensive, often multiyear activities.

More resources devoted to each action.

Our approach to proxy voting

Proxy voting is a critical component of our approach to corporate
governance. We offer our clients a high degree of transparency
related to the votes we cast on their behalf.

View our proxy voting records.

View our 2017 proxy voting summary -- Coming Soon

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LEADERSHIP

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Investment Capabilities

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CORPORATE RESPONSIBILITY

Learn how we're investing in our communities.

1Launched in 2006, the UN Principles for Responsible Investment (UN PRI) are a set of voluntary best practice standards that asset owners and asset managers pledge to uphold in order to incorporate environmental, social, and governance (ESG) issues into their investment processes. We are also members of the Carbon Disclosure Project and compliant with the UK Financial Reporting Council’s Stewardship Code.