HOW WE MANAGE OURSELVES
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HOW WE’RE GOVERNED
OUR CULTURE
OUR TEAM, RESOURCING AND INCENTIVES
OUR FOOTPRINT
Seventeen years since its inception, Redington is still part-owned by its founders Rob Gardner and Dawid Konotey-Ahulu. Dawid continues his involvement with Redington to this day by sitting on our Board as a non-executive director. A number of our senior staff are also shareholders in the business. Alongside them, as a majority shareholder, is Phoenix Equity Partners, a UK-based private equity firm, which invested in Redington in 2020.
At year-end, the Redington Board comprised an independent chair, Kathryn Purves, four executive directors – our CEO, Deputy CEO, COO and CFO – and three non-executive directors – Dawid alongside two Phoenix Investor Directors. Our search for a new CEO was concluded in early 2022 with the appointment of Sylvia Pozezanac, who took over from our acting Interim CEO, Zoe Taylor, who has since resumed her responsibilities as Deputy CEO. This continuity has ensured stability for our staff and clients throughout the process.
Our Board works with the executive team to set Redington’s strategic direction and ambitions. It continues to encourage the maintenance of our longstanding entrepreneurial culture and growth mindset, including the expansion of our sustainability and stewardship services. Given the strategic importance of sustainable investment and stewardship, these are areas on which the Board focuses a good deal of time and attention, with regular contact with the heads of our sustainability and stewardship business.
Our sustainability and stewardship activities are overseen by an executive Sustainable Investment Committee. Committee members include our Deputy CEO and our COO, alongside representatives from across the broader business. The Committee is chaired by our Head of Stewardship & Sustainable Investment Strategy. The Committee owns and reviews our Sustainable Investment Policy, monitors operational delivery and approves the positioning of our sustainability approach, including quality of communications (not least agreeing that this report itself is fair and balanced) and public policy consultation responses.
Where we’ve made public commitments with regards to sustainability, the Committee monitors progress, with specific members accountable for maintaining ongoing relationships. This includes our B Corp status as well as assessing progress against our net-zero commitment and to those commitments taken on as part of our memberships of the Investment Consultants Sustainability Working Group (ICSWG), the Net-Zero Investment Consultants Initiative (NZICI) and Pensions for Purpose.
Promoting and practising effective stewardship is a requirement from our Board and is reflected in the governance structure we’ve put in place, which is overseen by senior leadership and our Sustainable Investment Committee. We believe this has been effective to date. To reflect the changes in personnel and the type of clients we service, we’ll be undertaking a governance effectiveness review in 2023, which will include the membership and terms of reference of our Sustainable Investment Committee.
Where we’ve made public commitments with regards to sustainability, the Committee monitors progress, with specific members accountable for maintaining ongoing relationships.
We’re proud that our scoring on the Governance pillar of the B Impact Assessment recognises achievement above that of our peer group. We believe that this reflects the employee-owned heritage of our firm, our responsiveness to staff perspectives and views and how we ensure we remain accountable to our clients.
We’re proud of our senior commitment to hearing and responding to client feedback, and we continue to consider ways in which we can enhance our approach and accountability across all of our stakeholders.
At Redington, our culture, people and how we treat one another are paramount. Our culture has evolved organically over almost 17 years; we’ve had colleagues join us and leave us, and each has left a unique mark on who Redington is today. Yet, throughout, our culture has remained anchored by our values:
Redington was founded on the principle of challenging the pensions industry to improve outcomes for end members. This still very much runs through our organisation and the way in which we operate. We have a strong desire to learn and improve across all aspects of our business, whether that’s how we advise our clients, the systems we use or the opportunities offered to our employees to take on substantial responsibility early in their careers. We don’t fear change; we do what it takes to ensure that we maintain a culture of innovation and progress.
The B Corp certification process has been an important aspect of putting this into practice. When we set out to complete the B Impact Assessment, we were eager to discover the areas we needed to strengthen to obtain certified status. As we worked through the questionnaire and learnt that we might already meet the criteria for certification, our focus immediately switched to identifying areas in which we could improve. The framework has already been of significant benefit to us in developing our evolving and progressive culture.
We believe that to have an engaged, happy and productive workforce we must ensure that our colleagues feel empowered to speak up and have appropriate platforms and channels available to do so.
Our employee-led Inclusion & Diversity Committee works closely with our Leadership and People teams to ensure inclusivity is central to everything we do. Our People team provides channels for feedback to be heard and acted on through pulse surveys, focus groups and an anonymous suggestions box. We employ individuals from diverse backgrounds to ensure that we think and work differently. We’re confident that this plays a part in our ability to respond to client needs effectively.
Whether it’s being generous with our time, knowledge or pastries, generosity is something that makes Redington a special place to work. Walking through our offices, generosity is something that really stands out – you often see people huddled around a desk sharing their insights on what’s happening in the market, discussing client projects and actively collaborating.
Just as we’re constantly learning and seeking to improve, we’re also keen to share what we know, being transparent about what we think has worked for us and the things that haven’t. This operates outside the organisation too: in this vein, we’ve co-founded and continue to help steer industry groups such as the Investment Consultants Sustainability Working Group (ICSWG) and the Net Zero Investment Consultants Initiative (NZICI) and actively participate in organisations such as the Diversity Project and 10,000 Black Interns to ensure our learnings can benefit the wider industry.
We’re excited to become a B Corp, joining a community of like-minded businesses that are keen to learn and share, just as we are. We challenge ourselves and the wider investment industry to follow best practices concerning inclusion and diversity and we’re committed to supporting the initiatives set out later here.
We continue to publish our gender pay gap voluntarily as part of our efforts to promote honesty about this issue across the financial services industry and to challenge ourselves to continue to improve. We’ve been successful in driving greater gender diversity across our business, with women now making up 40% of all employees – up from less than 30% in 2018.
Our success in improving gender diversity at the junior level has been less positive for our gender pay gap numbers, which remain stubbornly higher than we would want. Our 2022 mean hourly pay gender pay gap was 18.3%, very marginally lower than in 2021; however, the median saw an increase to 31.1%. We see a wider gap in bonuses, with the mean very similar to 2021 at 37.3% and the median markedly down to 46.3% from 68.3% in the prior year.
These numbers are disappointingly large, and we continue to work to ensure that we treat all our staff fairly and that we practice equal opportunities. We take little comfort from knowing that these numbers are better than the financial services industry generally, so we will continue to work to address them.
We’re pleased that our scoring on the Community pillar of the B Impact Assessment is notably above that of our peer group. Redington has long recognised our interdependence with others in order to deliver our role effectively – and our ability to work with others to shape our profession and the investment industry as a whole. We continue to foster meaningful relationships with our peers and others, including regulators, to ensure we can support our clients in the way they require, and we seek to further advance our efforts in this area.
Redington is a purpose-driven organisation, and this is a value our entire team upholds. Considerations of sustainability are embedded into everyone’s role, regardless of which function they undertake. How this is embedded and how it manifests is different for each role and each individual member of our team. Specifically, our Manager Research colleagues and client-facing teams will embed material sustainability considerations into their work for our clients, while our Operations team will consider the environmental and social impacts of facilities management and procurement.
Training is available, and our size and autonomous culture mean that any individual can readily approach our sustainability specialists for advice and input. We encourage our employees to study for various qualifications, including the CFA UK’s Certificate in ESG Investing or Certificate in Climate Investing, of which one of our employees was a leading author. In 2022, c.10% of our employees were studying towards a professional qualification of their choice.
Our workforce reduced in size over 2022 to just over 200 employees, largely as a result of completing a major technology development process. Going forward, we expect to continue to grow as an organisation.
Specifically, regarding sustainability and stewardship, we continue to grow our team with both part-time and full-time SI specialists joining our Manager Research, Investment Consulting and Modelling teams to cater to the increased demand for sustainable investment and stewardship advice from our clients. At the end of 2022, we had six full-time and three part-time SI specialists: five specialists within our Investment Consulting function, three within our Manager Research and our Head of ESG Analytics sitting in our Modelling (Asset & Liability Management) team.
During the year, we also had an active recruitment process to hire another full-time SI consultant who joined us at the beginning of 2023. Collectively, these six full-time individuals have more than 50 years of professional experience in sustainable investment and stewardship and ensure that our clients benefit from a resource and skill-base that is unique among investment consultants.
However, it’s not only our SI specialists that work on sustainable investment, all our staff are expected to be able to support clients in their stewardship and sustainability decision-making. In fact, during 2022, we spent significant time and resources to further upskill our colleagues on material sustainability and stewardship matters. For example, all ESG reporting analytics are now fully integrated into our modelling capabilities and are delivered by our Modelling team, overseen by our Head of ESG Analytics. As an outcome of these efforts, our full-time sustainability professionals were able to focus on forward-looking research and advice to ensure our clients have access to the most up-to-date SI capabilities. This has also allowed us to develop our sustainable investing and stewardship propositions for both new and existing clients, led by our sustainability and stewardship heads and supported by the wider team. Given we’re a relatively small organisation, our sustainability and stewardship heads are closely involved with the delivery of much of our work and maintain oversight of the quality of our overall advice in these areas.
While all our SI specialists are specifically incentivised to deliver insights and advice to our clients that meet their sustainability and stewardship needs, such goals are also prevalent more broadly across the organisation
During the year, we bolstered this by adding additional objectives within our performance management system to highlight our aim of delivering sustainable investment advice effectively across our client base. Thus, among our firmwide performance objectives available for assessing the performance of all employees are: “embed responsible investment into research”, “embed responsible investment into advice” and “embed sustainability into operations”. Implementing these objectives means that our employees are fully incentivised to support clients with their sustainable investment and stewardship requirements, as delivery against them influences annual appraisals, bonuses and promotions.
We regularly host internal teach-ins and workshops on relevant sustainability topics either as separate targeted sessions or as part of quarterly town halls and other firmwide meetings. We also host external manager presentations, some of which directly relate to sustainability and stewardship.
In 2022, we hosted 13 manager presentations, to which all our staff were invited. Notably, one of our preferred managers gave a presentation on an impact private equity fund and another manager on a sustainable listed equity fund.
We use sustainability data on climate metrics and SDGs from market-leading data providers MSCI and Impact Cubed, enabling us to share considered insights with our clients. Recognising the pace of change in the market, at the beginning of the year, we conducted a review of ESG and specifically climate data and scenario analysis providers, which provided an opportunity to test the data market for new developments and to ensure we’re providing our clients with expert analytics. As a result of this exercise, we have switched from using the stress tests developed by the Prudential Regulation Authority to those under the banner of the Network of Central Banks and Supervisors for Greening the Financial Systems (NGFS), which will be updated regularly.
Over 2022, our Modelling team worked hard to ensure a smooth transition into this new climate modelling technology, and we’ll start to incorporate the new scenarios into our advice in 2023.
Our scoring on the Workers pillar of the B Impact Assessment is above that of our peer group. We know that as a people-oriented business, our colleagues are our key resource and are what enables us to deliver to and satisfy our clients.
To further enhance our approach in this area, we’re exploring ways in which our people policies, such as our approach to parental leave, can be enhanced.
By far the largest impact we can have in the world is by supporting our clients to be conscious of their impact on people and planet while delivering the investment returns they need to fulfil the expectations of their beneficiaries, and helping them to reduce those impacts over time.
However, we know that this doesn’t absolve us from responsibility for our own footprint. We chose our current offices for their low impact and their sustainability credentials – as well as our scope to influence further improvements. We buy recycled and recyclable supplies, have moved to vegetarian food as our default and are actively cutting our printing activities (as well as measuring our precise paper usage and financing tree planting to ensure reforestation to reflect this footprint – from the start of 2022). We benefit from greywater harvesting and electricity efficiency features – not least shifting part of our server activities during the year to the cloud rather than within our own offices, notably reducing our power usage. We’ve been consistently pressing for an increase in the proportion of our electricity that comes from renewable sources, and were pleased in late 2022 to reach an agreement with our London landlord that all of our future electricity will be from renewables.
We actively assess our carbon footprint across scopes 1, 2 and 3, including our employees’ commutes and business travel, and have committed to offset the carbon emissions that we cannot eliminate, but still strive to reduce. We continue to buy the highest quality of offsets and over-purchase to provide a further buffer of assurance.
We’re pleased to find that our score on the Environment pillar of the B Impact Assessment exceeds that of our peer group. We acknowledge the need of every business to work to address the climate crisis and to minimise its negative environmental footprint.
We’re seeking to further enhance our approach in this area, and our recent success in sourcing more electricity from renewable sources will improve our score. We’re also continuing to think about the suppliers we use and working with our building landlords to ensure we’re maximising opportunities for recycling.
