Federated Hermes – Improving ESG through active engagement with portfolio companies

Publication Type

Case

Publication Date

8-2021

Abstract

This case study is set in May 2021. It describes how Sarah Lee, Director of Engagement at Federated Hermes (FH) has been engaging with Ruby Goods (Ruby), a consumer goods company that operates in Asia, Europe, Latin America and the United States, to reduce greenhouse gas (GHG) emissions in its dairy operations. The case illustrates how an external stakeholder, an investment management company with minimal formal organisational authority, can influence and drive ESG (environmental, social and governance) performance improvements.

While Lee was successful in getting Ruby to streamline its ESG approach and establish the Ruby Corporate Responsibility Council to drive company-wide ESG initiatives, she encountered resistance from Ruby’s senior management and the board to commit to the more ambitious science-based targets critical for achieving carbon neutrality by 2050. What should she do to pressure Ruby’s senior management into commitment and action while preserving FH’s carefully cultivated relationships with Ruby’s senior management?

Students will learn to 1) Adopt an active engagement framework to drive ESG performance, 2) Tap into the different sources of power to increase influence as an external third-party stakeholder, and 3) Build coalitions to effect change as an external stakeholder.

Keyword(s)

sustainable business practices, social investments, green business, power and influence, change agents, investment funds

Discipline

Management Sciences and Quantitative Methods | Strategic Management Policy

Research Areas

Strategy and Organisation

Data Source

Field Research

Industry

Investment management services

Geographic Coverage

Europe

Temporal Coverage

2021

Education Level

Executive Education; Postgraduate; Undergraduate

Publisher

Singapore Management University

Case ID

SMU-21-0015

Comments

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Additional URL

https://cmp.smu.edu.sg/case/4996

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