Industry Voice: Schroders Sustainability Scorecard

At Schroders, we are committed to providing financial advisors with ongoing sustainability support and training to help you in your conversations with clients. Our ‘Sustainability Scorecard’ is the latest addition to our sustainability consulting toolkit.

In its simplest form, the Sustainability Scorecard includes 20 quick multiple-choice questions about a consulting company’s sustainability credentials. The questions cover all three factors – environmental, social and governance (E, S and G). The dashboard can encourage review in certain areas of the business where advisors can implement changes that can often be quite simple.

Take the Sustainability Dashboard Survey

Why launch the dashboard?

There were three main reasons we thought this might be a useful tool:

Education: Schroders already offers “face-to-face” training for advisors through our local business development team. Following a successful pilot project, we are also about to offer an online training module. However, we thought there might be an opportunity to offer a form of differentiated education, which encouraged discussion and potentially added value to a consulting business.

The dashboard is a simplified illustration of some of the ways we think about environmental, social and governance factors related to the companies in which we invest. At Schroders, we use a range of proprietary tools to understand the sustainability characteristics of our investments. This includes SustainEx which helps quantify the positive and negative externalities a company or country creates for society and the risks and opportunities they may face as a result. Our tools are built around a partnership approach: we believe that companies that take into account the needs of all their stakeholders will do better in the long term. Advisors who think through the sustainability risks and opportunities they face are arguably more likely to succeed in the long term.

Make real: At Schroders, we have incorporated ESG into our investment decisions for many years. This dashboard “brings to life” how these considerations might be applied to a consulting business, but in a simplified way.

Commitment: We’ve used the dashboard at live events where delegates could see how they stack up against other companies. The dashboard can also be used in “one on one” sessions with business owners or in team meetings, encouraging discussion and maybe change!

What areas does the dashboard focus on?

The scorecard includes questions on environmental, social and governance policies. For example, environmental issues focus on the use of renewable energy providers, recycling and carbon offsets. Social issues address areas such as flexible working, the gender pay gap, and diversity and inclusion policies.

Finally, governance-related areas look at advisory processes and customer preferences for sustainability, sustainability training, and adoption of online customer communication.

What are the benefits for advisors of using the dashboard?

The counselors found it a really interesting exercise to do. Some have already made simple changes such as reducing plastic further, considering installing charging stations in their car park and how to offset their carbon emissions.

However, many have also discussed with us how a business based on sustainable principles can help:

Attracting and retaining talent: According to a recent survey, the largest group of job seekers who take a sustainability stance are between the ages of 23 and 38. 50% would consider quitting their job to work for a greener organization[1]. Many organizations surveyed also indicated that focusing on a greener future can attract top talent. Additionally, the pandemic has also changed the priorities of job seekers seeking flexible work opportunities and a healthy work-life balance.

Improve brand awareness: An article from the Guardian[2] took recruiting a step further by stating that “More people than ever want to work for, invest in and buy from companies with strong green credentials”.

From words to deeds: If advisors are discussing sustainable investments with their clients, it is important to have high sustainability benchmarks in place. As one advisor put it, “I can’t talk about sustainability with plastic water bottles in meeting rooms.”

Review business practices: Sustainability isn’t just about the environment, so the scorecard addresses some operational areas such as online adoption for customer communication. Operational efficiency through the use of technology has been accelerated in many ways by the pandemic, but it also greatly improves business sustainability.

Increase revenue and business valuation: According to HSBC, a third of companies surveyed said that “a sense of social responsibility will be one of the defining characteristics of successful companies in the future… 86% said improving their sustainability objective would increase probably their income over the next year”.[3] For many advisors looking for a succession plan and potential exit strategy, revenue and assets under management are important to valuations, but we believe good sustainability criteria can also help.

How else can the dashboard help?

Education: If delivered by the Schroders team, the dashboard is part of a larger session where we can educate on areas such as carbon offsets, renewable energy and the path to net zero.

Comparative analysis : Dashboard responses are aggregated anonymously, allowing for benchmarking so advisors can compare themselves to others and identify where they are on their sustainability journey. Advisors responding to the survey can contact us for the latest benchmarking data.

Additional Advisor Support: The dashboard has also helped us identify where we can provide additional support. For example, 17% of advisors needed help asking clients about their sustainability preferences. We now look at how Schroders can help advisors in these areas highlighted by the survey.

Support the Felix project

The more data we collect from advisors, the stronger the benchmarking exercise will be. Plus, for every completed dashboard, we’ll donate to The Felix Project, one of our charity partners. The Felix project uses surplus food from supermarkets and restaurants to help feed vulnerable people in their local communities.

Click on here To take part.

If you have any questions or want to learn more about our sustainable toolkit, please email [email protected]contact your usual Schroders representative or call our Business Development Desk at 0207 658 3894.

This position is funded by Schroders

Important Information

Marketing materials for professional customers only, not for further distribution. This information constitutes a marketing communication. The material is not intended to provide, and should not be used for, accounting, legal or tax advice, or investment recommendations. No reliance should be placed on the opinions or information contained in the material when making individual investment and/or strategic decisions. Past performance is not indicative of future performance and may not be repeated. The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested. Changes in exchange rates may cause the value of investments to fall as well as rise. Schroders uses SustainEx™ to estimate the net impact of an investment portfolio by considering certain sustainability metrics against a product’s benchmark, where applicable. To do this, it uses third-party data as well as Schroders’ own estimates and assumptions and the result may differ from other sustainability tools and measures. Schroders has expressed his own views and opinions in this document and these are subject to change. The information contained herein is believed to be reliable, but Schroders does not warrant its completeness or accuracy. To the extent that liability under applicable law cannot be excluded, no Schroders entity accepts any liability for any errors or omissions in this document or for any loss or damage resulting therefrom (whether direct, indirect, consequential Or other). Schroders will be responsible for processing your personal data. For more information on how Schroders may process your personal data, please see our privacy policy available at or upon request if you do not have access to this webpage . For your security, communications may be recorded or monitored. Issued September 2022 by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registration number 1893220 England. Authorized and regulated by the Financial Conduct Authority. UK004928.

[1] “Sustainability: The Winning Factor in Recruitment”, Andrew Richardson

[2] Recruiters.the “Going Green: Why Every Recruiter Should Read This Article”

[3] Recruiters.the “Going Green: Why Every Recruiter Should Read This Article”

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