As a signatory to Principles for Responsible Investment (PRI),¹ Glenmede was asked by PRI to provide a description of our approach to sustainable and impact (S&I) investing, summarize recent significant S&I-related achievements and outline our S&I-related initiatives over the next two years. The following is an adapted and updated version of what we submitted to PRI in April 2021.

Our approach

We engage in S&I investing because doing so aligns with our corporate values of excellence with integrity, agility and stewardship. Glenmede, which includes The Glenmede Trust Company, N.A. (GTC) and Glenmede Investment Management LP (GIM), is committed to being a reliable steward by providing innovative solutions and wealth and investment management services to meet clients’ financial and values-based goals. Responsible investment aligns directly with that mission. Our client base includes high-net-worth individuals, family offices, endowments, foundations and institutional investors, and our ability to serve as reliable stewards is strengthened by our Sustainable & Impact Investing practice.

We seek to utilize environmental, social and governance (ESG) data to help clients mitigate risk, position portfolios for growth and, in some cases, target specific environmental or social outcomes. For our GTC wealth management and endowment and foundation clients, our Sustainable & Impact Investing group and portfolio managers design sustainability-aligned portfolios, guided by clients’ financial and impact motivations. We offer our GIM clients a diversified strategy suite with options spanning Integrated, Mandated and Thematic approaches to pursue competitive risk-adjusted returns alongside sustainability and prosperity. These approaches help our clients pursue their financial goals while also aligning capital to address key issues, including climate change, wealth inequality, gender and racial inequity.

Our goal is to position S&I investing not as a specialty but rather as an ingrained part of our investment and wealth management process. When working with interested clients, we integrate related considerations into our traditional practices. Integrating ESG issues into investments is not a new approach; rather, it reflects the ability to incorporate increasingly available and relevant data to help investment professionals design more robust client portfolios. As such, while we have a team of dedicated S&I investing specialists to develop and enhance our capabilities, we have spent considerable resources developing a next generation of investors and relationship managers capable of integrating responsible investing techniques into their practice. Currently, more than 50 cross-functional investment professionals and investment analysts have undergone extensive training. Ultimately, we hope our entire investment and relationship management staff will be as facile and conversant with responsible investing as they are with efficient frontier asset allocation and stock market valuation techniques. This integrated approach extends to the corporate level. Our significant investment into our business’s environmental and social footprint locally reflects our commitment to S&I investing at all levels of our organization.

2020-2021 Progress in Sustainable and Impact Investing

At the corporate level, we sought to further ingrain sustainability within our firm’s culture. ESG integration was one of three featured firmwide initiatives to facilitate greater employee involvement in assessing the materiality of ESG criteria. Further, during the year we launched the Glenmede Recycling, Efficiency & Environmental Network, a coalition to minimize the firm’s environmental footprint; partnered with Girls Who Invest;² and increased engagement with our Women Investing Network at Glenmede community. Within GTC, our goals through 2020 and 2021 were to infuse structure and substance into our Sustainable & Impact Investing program, acknowledging that an increasingly complex platform deserves a deeper offering of frameworks, resources and tools.

• To expand portfolio capabilities, we conducted an extensive landscape analysis and developed a taxonomy defining four S&I investment approaches on our platform: Integrated, Mandated, Thematic and High Impact Concessionary. Any strategy employing one of these approaches is evaluated using our proprietary S&I evaluation matrix, which is weighted depending on the approach. In 2021, our focus has been to complement this larger platform with enhanced ESG and impact measurement capabilities, increasing our ability to design, and measure, double-bottom line portfolios for our client base.
• To expand thought leadership, we have actively shared our taxonomy and published research papers on: harnessing the power of public markets to combat climate change, the value of adopting a comprehensive approach to gender lens investing that considers factors like pay equity and culture and a framework for approaching racial equity investing based on its capacity to offer a potential for alpha but also transform socioeconomically marginalized communities. In 2021, we released our inaugural Sustainable and Impact Outlook with a subsequent multipart “Insights” series playing off key themes across climate change, the rise in importance of social factors and the importance and implications of increased regulation and scrutiny on fiduciary alignment. On fiduciary alignment, we released a framework and set of considerations for investors that was published in The Journal of Wealth Management’s Fall 2021 issue.
• To scale fluency, extensive S&I investing training is now available to all Glenmede client-facing staff and is part of our firm’s mandatory New Hire Training program. In parallel, we held intensive monthly expert training sessions throughout 2020 and 2021 for more focused programming, resulting in more than 50 relationship manager experts with advanced knowledge of S&I investing, spanning all divisions and regions. In 2021, we were rewarded for our efforts at Environmental Finance’s 2021 Impact Awards as “Wealth Manager of the Year.”

Within GIM, our boutique asset management entity that serves institutions, consultants and advisors, we created the role of director of ESG investing in January 2020. One of the director’s primary responsibilities is to develop a framework for the systematic approach to ESG integration across GIM’s fundamental investment strategies, which should be implemented by year-end 2021. The framework is the result of a year-long firmwide initiative in 2020. The director worked closely with GIM’s ESG Integration Steering Group, a crossdisciplinary team devoted to advancing GIM’s ESG efforts, and fundamental analysts to guide the creation of this framework and develop a robust documentation process. In parallel with GIM’s quantitative strategies, which are already considered ESG Integrated, 2020 initiatives focused on expanding participation in shareholder engagement opportunities as guided by GIM’s Investment Stewardship Committee and outlined in GIM’s Shareholder Engagement policy. GIM continues to look for ways to refine its ESG efforts and views these efforts as consistent with the goal of maximizing risk-adjusted returns. For example, in December 2020 GIM integrated gender-specialized data into its multifactor model for its Women in Leadership strategy to provide a more comprehensive lens of value creation, coinciding with the strategy’s five-year anniversary.

Efforts to Advance This Space

Two key challenges to achieving broader industry acceptance of S&I investing are lack of common terminology and lack of clarity among legal and investment professionals around how to appropriately implement responsible investing in different account ownership and trust structures. Glenmede has developed innovative, practical frameworks to handle both issues. To advance this discipline, we shared our frameworks through conferences and publications. The next two years offer a runway to deepen and integrate our investment capabilities across GTC and GIM; focus our research on timely, nuanced concepts; and strengthen our ESG and impact measurement reporting while scaling staff knowledge.