Hermes Equity Ownership Services (EOS)

Climate Impact & Sustainability Data (Q2 2024)

Supported companies in setting science-based targets for greenhouse gas emissions reduction, including Scope 3 emissions.
Engaged with companies to improve their circular economy practices, leading to increased recycling rates for end-of-life vehicles and improved material recyclability in products.
Promoted the adoption of sustainable materials in the tire industry, resulting in the development of a 90% sustainable-material content demonstration tire.

Engaged with companies to improve diversity and inclusion, leading to increased representation of women and ethnically/racially diverse employees in their workforce.
Supported shareholder proposals aimed at improving animal welfare in supply chains, including phasing out gestation stalls for pigs and improving transparency on feather down sourcing.
Advocated for stronger policies to address antimicrobial resistance (AMR) in animal agriculture.

Reluctance of some companies to disclose the extent of their involvement with animal testing.
Complexity of assessing companies’ climate transition plans.
Lack of global harmonisation in regulations for pharmaceutical animal testing.
High costs and uncertainty around the economic feasibility of large-scale carbon capture, utilisation and storage (CCUS) deployment.
Resistance from some companies to increase climate-related disclosures in their financial statements.
Anti-ESG shareholder proposals targeting diversity, equity, and inclusion strategies.

Developed a framework to help investors appraise transition plans efficiently and effectively.
Engaged with pharmaceutical companies on their involvement in animal testing, focusing on the three Rs (replacement, reduction, and refinement).
Used supply-side insights from fossil fuel company engagements to strengthen engagements on demand-side climate solutions.
Encouraged companies to conduct thorough analyses to evaluate the economic feasibility of CCUS and to quantify the risks and uncertainties.
Engaged with companies to explain the importance of increased climate-related disclosures in financial statements.
Recommended opposing anti-ESG shareholder proposals that seek to undermine efforts to eliminate discrimination.

Engaged with companies to improve their sustainable sourcing practices, including for natural rubber and other materials.

Frameworks Used: TCFD