2022 Communication on Progress

Downing LLP

Published date

July 29, 2022

No. of questions

53

Supplemental files

CEO Statement

Signed

  • Governance

    Policies and Responsibilities

    1. Does the Board / highest governance body or most senior executive of the company:

    Optional comment
    The Highest Governance body is our Executive Committee. Our Corporate Governance policy describes the membership and responsibilities of this committee. The CEO's statement of continued support for the UN Global Compact describes the relevance of sustainable development to the company and Downing's Annual Report includes statements describing our impact on both people and the environment. Downing's statement of zero tolerance for corruption can be found within both our Professional Conduct Policy and our Staff Handbook. Downing's Chief Operating Officer is personally responsible for sustainability targets and Environmental, Social and Governance reporting and is accountable to the Executive Committee for delivery. In accordance with Downing's Corporate Governance Policy, risks related to the business model are regularly reviewed by the Executive Committee and managed through Downing's Enterprise Risk Management framework.

    2. Does the company have a publicly stated commitment regarding the following sustainability topics?

    No, this is not a current priority

    No, but we plan to have a commitment within 2 years

    Yes, and the commitment is focused on our own operations

    Yes, and the commitment includes our own operations and the value chain

    Yes, and the commitment includes our own operations and the value chain along with communities and society

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    Downing's public Modern Slavery statement refers to human rights, labour rights and decent work.

    3. Does the company have in place a code of conduct regarding each of the following sustainability topics?

    No, this is not a current priority

    No, but we plan to have a code of conduct within two years

    Yes, focused on employee conduct

    Yes, focused on employees and suppliers

    Yes, focused on employees, suppliers, and other business relationships

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    4. Has the company appointed an individual or group responsible for each of the following sustainability topics?

    No one is specifically responsible for this topic

    Yes, with limited influence on outcomes (e.g., limited access to internal information, limited decision-making authority)

    Yes, with moderate influence on outcomes (e.g., has access to relevant information, reports to senior manager)

    Yes, with direct influence of some outcomes (e.g., has access to relevant information, includes one or more senior manager with decision making rights

    Yes, with direct influence at the highest levels of the organization (e.g., has access to relevant information, includes most senior members of organization)

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    Head of ESG is responsible for sustainability in investment and client activity, as well as Downing's own as a corporate.

    5. Does the company have a formal structure(s) (such as a cross-functional committee) to address each of the following sustainability topics?

    No formal structure

    Yes, and with limited influence on outcomes (e.g., limited access to internal information necessary to understand risks, poor representation from relevant departments or functions)

    Yes, with moderate influence on outcomes (e.g., it includes representatives of some functions, departments, or business units most relevant for addressing the risks concerned, has access to relevant information, reports to senior manager)

    Yes, with direct influence on some outcomes (e.g., it includes representatives of functions, departments, or business units most relevant for addressing the risks concerned, has access to relevant information, it involves one or more members of senior management)

    Yes, and with direct influence at the highest level of the organization (e.g., full access to relevant information, it involves members at highest level of organization)

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    ESG Committee is being introduced in Q4 2022. This will discuss all sustainability topics including the above, and seek to formalise in an ESG Policy.

    Prevention

    6. Does the company have a process or processes to assess risk?

    No, this is not a current priority

    No, but we are planning to develop one in the next two years

    Yes, related to our own operations

    Yes, related to our own operations and entire value chain and other business relationships

    Human rights risks

    Labour rights risks

    Environmental risks

    Corruption risks

    Optional comment
    For listed equity investments, we use data from Sustainalytics to screen for Global Standards and behavioural norms (including the UN Global Compact, the OECD Guidelines for Multinational Enterprises, the UN Universal Declaration on Human Rights etc.). For private market investments (debt and infrastructure), we integrate ESG risks, including the above, into pre-investment analysis, investment committee discussions and ongoing asset management activities.

    7. Does the company have a due diligence process through which it identifies, prevents, mitigates, and accounts for actual and potential negative impacts on sustainability topics?

    No, this is not a current priority

    No, but we are planning to develop one in the next two years

    Yes, related to our own operations

    Yes, related to our own operations and entire value chain and other business relationships

    Human rights risks

    Labour rights risks

    Environmental risks

    Corruption risks

    Concerns and grievance mechanisms

    8. Are there any processes through which members of the company’s workforce can raise concerns about the company’s conduct related to human rights, labour rights, environment, or anti-corruption?

    Optional comment
    Head of ESG is available for any of these concerns to be raised to, after which appropriate action (e.g. escalation or discussion at the ESG Committee) will be determined.

    8.1. Please provide additional detail regarding the process(es) the company has through which members of the company’s workforce can raise concerns about the company’s conduct.

    No

    Yes

    Is the process communicated to all employees/workers in local languages?

    Is the process available to non-employees (e.g., contractors, vendors, suppliers)?

    Is the process confidential (e.g., whistleblowing process)?

    Are there processes in place to avoid retaliation?

    Can concerns be raised about suppliers or other business relationships (e.g., clients, partners, etc.)

    Other (Please provide additional information)

    Optional comment
    In addition to the informal process described here, we have a formal Whistleblowing Policy.

    9. Does the company provide or enable access to effective remedy to right holders / stakeholders where it has caused or contributed to the adverse impact?

    No process to enable remedy to stakeholders

    Remedy available to some stakeholders (i.e., some geographies, employees only)

    Remedy is available to all affected stakeholders

    Remedy is available to all stakeholders, and suppliers are expected to have similar policies

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Lessons

    10. How does the company capture lessons regarding each of the following sustainability topics?

    No lessons are regularly captured

    Conducts root cause analyses/investigation of major incidents

    Conducts root cause analyses/investigation and changes organizational policies, processes, and practices accordingly

    Systematically conducts root cause analyses/investigation and leverages learnings to influence both internal and external affairs

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Executive Pay

    11. Is executive pay linked to performance on one or more of the following sustainability topics?

    No, and we have no intention to change

    No, but we plan to within two years

    Yes

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    ESG is included in the objectives & appraisals for all staff.

    Board Composition

    12. Percentage of individuals within the company’s Board / highest governance body by:

    Number/Percentage

    Not applicable (Please provide additional information)

    Total number of board members (#)

    7

    Male (%)

    57

    Female (%)

    43

    Non-binary (%)

    0

    Under 30 years old (%)

    0

    30-50 years old (%)

    70

    Above 50 years old (%)

    30

    From minority or vulnerable groups (%)

    15

    Executive (%)

    100

    Independent (%)

    13. Do you produce sustainability reporting according to:

    UNPRI
    Optional comment
    We advocate the following, and use for investment purposes: CSRD, GRI, SASB. We also plan to report greenhouse gas emissions, and voluntarily follow the UK regulation for large corporate to report carbon (SECR).

    Data Assurance

    14. Is the information disclosed in this questionnaire assured by a third-party?

    Optional comment
    GHG emissions for 2021-22 will be verified by an external party.

  • Human Rights

    Materiality / Saliency

    1. Which of the following has the company identified as material human rights issues connected with its operations and/or value chain, whether based on their salience (i.e., the most severe potential negative impacts on people) or another basis?

    As equity investors in companies globally, exposure to companies with human rights controversies in their own operations or value chains could occur.

    Response

    8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the human rights principles, including any challenges faced and actions taken towards prevention and/or remediation.

    Listed equity investments are screened by an ESG data provider (Sustainalytics) for compliance with the UN Global Compact and other conventions on human rights (e.g. the UN Universal Declaration on Human Rights, 1948, or the OECD Guidelines for Multinational Enterprises). Any holdings that are non-compliant or watchlist status are identified for risk management, engagement, monitoring and potential divestment. We are committed to preventing acts of modern slavery and the occurrence of human trafficking in our business and supply chain. We expect our suppliers to uphold human rights. We have a Modern Slavery Statement, which is available on our website.

  • Labour

    Commitment

    1. Does the company have a policy commitment in relation to the following labour rights principles?

    No, and we have no plans to develop a policy

    No, but we plan to in the next two years

    Yes, included within a broader policy

    Yes, articulated as a stand-alone policy

    Not applicable (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    Downing adheres to UK employment law as well as monitoring best practice when determining policies and practices that are relevant to its Partners and employees. Collective bargaining is not relevant, however when appropriate consultation is undertaken.

    Forced labour

    2021

    Child labour

    Downing does not hire anybody under the age of 18. This is not within a policy, but contained in guidance for managers.

    Non-discrimination in respect of employment and occupation

    2021

    Occupational safety and health

    2021

    Working conditions (wages, working hours)

    1.1. For each labour rights policy, is it:

    Aligned with international labour standards?

    Publicly available?

    Approved at most senior level of the company?

    Applied to the company’s own operations?

    Applied to the company’s supply chain and/or other business relationships?

    Developed involving labour rights expertise from inside and outside the company?

    Other (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    Forced labour

    Child labour

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    Our modern slavery statement is also relevant here: https://assets-us-01.kc-usercontent.com/8c961317-6aee-00a7-e4b6-ae38cd847d2d/1750543f-9de5-470a-b0f1-ded7469cc13c/Downing%20LLP_Modern%20Slavery%20Statement_2021.pdf

    Prevention

    2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following labour rights issues?

    No engagement on this topic

    To better understand the risks/ impacts in question

    To discuss potential ways to prevent or mitigate the risks/ impacts in question

    To agree on a way to prevent/ mitigate the risks/ impacts in question

    To assess progress in preventing/ mitigating the risks /impacts in question

    To collaborate in the prevention/ mitigation of the risks/ impacts in question

    Other (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    No collective bargaining, but we do consult on an individual basis.

    Forced labour

    Not applicable

    Child labour

    Not applicable

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this labour rights issue?

    Provided internal training/ capacity building for the direct workforce

    Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)

    Conducting an audit process and/or corrective action plan

    Collective Action with peers or other stakeholders, in particular workers' organizations, to address the issue

    Collaboration with governmental or regulatory bodies

    Other (Please provide additional information)

    No action within reporting period

    Freedom of association and the effective recognition of the right to collective bargaining

    Forced labour

    Child labour

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    Training on professional conduct - will be developed further, as our values evolve following workshops in H1 2022

    4. Who receives training for the following labour rights issues?

    No training provided

    Select employees

    All employees

    Contractors

    Direct suppliers of the organization

    Indirect suppliers of the organization

    Other – such as partners, clients, etc.

    Freedom of association and the effective recognition of the right to collective bargaining

    Forced labour

    Child labour

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    HR and certain executive committee members or certified senior manager staff.

    5. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following labour rights issues?

    No monitoring of progress

    Review issues on ad-hoc basis

    Set annual targets/ goals, track progress over time (internal programs only)

    Set annual targets/ goals, track progress over time (internal and external programs)

    Other (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    Risk is not applicable.

    Forced labour

    Risk is not applicable.

    Child labour

    Risk is not applicable.

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Risk is not applicable.

    Working conditions (wages, working hours)

    Optional comment
    We do not consider our size big enough to set targets (~200 staff).

    Performance

    6. What is the percentage of employees covered under collective bargaining agreements?

    Percent of employees (%)

    Unknown

    Employees covered under collective bargaining (%)

    0

    7. What is the percentage of employees in a trade union or other workers' organization?

    Percent of employees (%)

    Unknown

    Not applicable (Please provide additional information)

    Employees in a trade union or on a worker committee (%)

    0

    8. In the course of the reporting period, what was the percentage of women in:

    Percent of women (%)

    Unknown

    Senior leadership level position

    31

    Non-executive board

    Optional comment
    Defined as dept heads and above: 7 female out of 23 total senior = 31% There is no Non-Executive Board, only advisors.

    9. What was the average ratio of the basic salary and remuneration of women to men (comparing jobs of equal value) during the reporting period?

    Salary ratio (%)

    Unknown

    Choose to not disclose

    Women / Men (%)

    10. In the course of the reporting period, how frequently were workers injured (injuries per hour worked)?

    Frequency of injury

    Unknown

    Choose to not disclose

    Frequency of injury

    0

    11. In the course of the reporting period, what was the company’s incident rate?

    Incident rate

    Unknown

    Choose to not disclose

    Incident rate

    0

    Response and Reporting

    12. In the course of the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to the adverse impact associated with the following labour rights issues?

    Yes

    No

    Choose to not disclose

    Not applicable (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    Issue doesn't apply to our business.

    Forced labour

    Issue doesn't apply to our business.

    Child labour

    Issue doesn't apply to our business.

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Issue doesn't apply to our business.

    Working conditions (wages, working hours)

    13. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the labour rights principles, including any challenges faced and actions taken towards prevention and/or remediation.

    Tone from the top determines the culture of the organisation and there is zero tolerance for any kind of discriminatory behaviour. Whilst we have policies in place, prompt actions from senior leaders to address discriminatory behaviour has evidenced this.

  • Environment

    Commitment

    1. Does the company have a formal policy on the following environmental topics?

    No, and we have no plans to develop a policy

    No, but we plan to in the next two years

    Yes, included within a broader policy

    Yes, articulated as a stand-alone policy

    Not applicable (Please provide additional information)

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Optional comment
    Where we do not have plans to develop, this is because the topics are not directly applicable to an office-based organisation on their own, and likely covered elsewhere (e.g. investment activity or ESG policies).

    Prevention

    2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following environmental issues?

    No engagement on this topic

    To better understand the risks/ impacts in question

    To discuss potential ways to prevent or mitigate the risks/ impacts in question

    To agree on a way to prevent/ mitigate the risks/ impacts in question

    To assess progress in preventing/ mitigating the risks/ impacts in question

    To collaborate in the prevention/ mitigation of the risks/ impacts in question

    Other (Please provide additional information)

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Optional comment
    Climate Action 100+ collaborative engagement with other investors in order to decarbonise some of the world's highest emitting companies.

    3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with these environmental topics?

    Provided internal training/ capacity building for the direct workforce

    Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)

    Conducting an audit process and/or corrective action plan

    Collective Action with peers or other stakeholders to address the issue

    Collaboration with governmental or regulatory bodies

    Other (Please provide additional information)

    No action within reporting period

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Optional comment
    Integration of climate and energy factors into investment and engagement activities. Also investment in renewable power infrastructure in UK & Europe.

    4. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following environmental topics?

    No monitoring of progress

    Review issues on ad-hoc basis

    Set annual targets/ goals, track progress over time (internal programs only)

    Set annual targets/ goals, track progress over time (internal and external programs)

    Other (Please provide additional information)

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Optional comment
    Any of these issues could arise to an investment that we hold. Risks will be identified and discussed (in pre-investment analysis or ongoing monitoring) in order to manage.

    5. In the course of the reporting period, has the company been involved in providing or enabling remedy for any actual impacts associated with the following environmental issue(s)?

    Yes

    No

    Choose to not disclose

    Not applicable (Please provide additional information)

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Climate Action

    6. What were the company’s gross global greenhouse gas emissions for the reporting period?

    Scope 1 Emissions

    Planned for 2021-22 financial year (ending May 2022 and reporting due in Sept 2022, including our Scope 1 and 2 emissions). This will be reported in the sustainability content of our annual report, and can be included in future UN Global Compact Communications on Progress.

    Emissions (tCO2e)

    Scope 2 Emissions

    Planned for 2021-22 financial year (ending May 2022 and reporting due in Sept 2022, including our Scope 1 and 2 emissions). This will be reported in the sustainability content of our annual report, and can be included in future UN Global Compact Communications on Progress.

    Emissions (tCO2e)

    Scope 3 Emissions

    Emissions (tCO2e)

    Optional comment
    Partial Scope 3 (employee commuting, working from home and business travel) is planned for our annual reporting, alongside the Scope 1 and 2 mentioned above. It is expected that Scope 3 / category 15 (investments) will be phased in over time as data, methodologies and regulatory requirements evolve.

    6.1. Which Scope 3 categories are included in the organization’s scope 3 emissions calculation?

    Optional comment
    Other - working from home emissions.

    7. What percentage of the company's revenue was invested in R&D of low-carbon products/services during this reporting period?

    Percent of revenue (%)

    21
    Optional comment
    Fees and revenue for two dedicated funds that invest in renewable power, as a percentage of total firm revenue.

    8. Has the organization acted to support climate change adaptation and resilience?

    Optional comment
    Investment in renewable infrastructure (wind, solar, hydro, battery storage etc.) - noted that this is more mitigation and reducing / avoiding emissions than adaptation.

    Energy / Resource Use

    9. Please report the company's renewable energy consumption as a percentage of total energy consumption in the reporting period.

    % of total energy consumption

    Optional comment
    Will become known as we report our Scope 2 emissions.

    Technology

    10. What percent of the company's revenue came from environmentally friendly products / services during this reporting period?

    Percent of total revenue (%)

    21
    Fees and revenue for two dedicated funds that invest in renewable power, as a percentage of total firm revenue.

    Sector-specific Questions

    11. Which sector(s) does the company operate in? If diversified, choose top 3 by revenue.

    Optional comment
    Asset management

    Overall Environment

    21. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the environment principles, including any challenges faced and actions taken towards prevention and/or remediation.

    For now, it is mainly integrating on environmental factors into investment activity: emissions (embodied & operational carbon), water, pollution, biodiversity etc. This will evolve and more detail will be reported in future.

  • Anti-corruption

    Commitment

    1. Does the company have an anti-corruption compliance programme?

    Anti-Bribery & Corruption policy is in place.

    2. Does your company have policies and recommendations for employees on how to act in case of doubt and/or in situations that may represent a conflict of interest, e.g. with regard to gifts and hospitality, donations, sponsorship, or interactions with public officials?

    Optional comment
    Conflicts of Interest Policy. Gifts & Benefits Policy. Personal Dealing Policy.

    Prevention

    3. Who receives training on anti-corruption and integrity?

    Optional comment
    Online courses for all staff annually, and for new staff during induction process.

    3.1. How often is such training provided?

    One time only

    Every year

    Every two or more years

    We do not collect this data

    All employees

    Select employees

    Contractors

    Direct suppliers of the organization

    Other – such as partners, clients, etc.

    Indirect suppliers of the organization

    4. Does the company monitor its anti-corruption compliance programme?

    Optional comment
    Risk monitoring system runs daily checks for every investee company, and raises alerts if any issues or controversies (including corruption) arise.

    Response and Reporting

    5. Please report the company's total number and nature of incidents of corruption during the reporting year.

    Number of incident(s)

    Unknown

    Choose to not disclose

    Confirmed during the current year, but related to previous years

    0
    None for May 21-May 22.

    Confirmed during the current year, and related to this year

    0
    None for May 21-May 22.

    6. Within the reporting period, what measures has the company taken to address suspected incidents of corruption independently or in response to a dispute or investigation by a government regulator?

    Optional comment
    No internal cases, or cases with investee companies.

    7. Does your company engage in Collective Action against corruption?

    Optional comment
    If there are investor engagement collaborations (as with climate, human rights etc.) for directly held companies, then we will consider joining.

    8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the anti-corruption principle, including any challenges faced and actions taken towards prevention and/or remediation.

    Enhancements to corruption training and raising awareness of the risk of corruption in our sector. This includes face-to-face scenarios, and maintaining / presenting key management information to ensure the promotion of ethical behaviour to protect employees and investors. We plan to engage further with the business in the upcoming reporting period regarding the importance of whistle-blowing, again protecting employees from non-retaliation.