Asset management policies

Asset management

Barclays Global Investors (BGI) is one of the world’s largest asset managers and a leading global provider of investment management products and services. BGI transformed the investment industry by creating the first index strategy in 1971 and the first quantitative active strategy in 1979. We believe environmental, social, and governance (ESG) issues are often relevant to the performance and sustainability of companies.

We continue to research these issues and as we find investment opportunities and insights related to these matters, we include them in our investment process. We recognise that markets and economies are dynamic and diverse, and therefore, we have developed innovative products and research and expanded global client services to meet the changing needs of our investors.

BGI offers clients a variety of products with different investment strategies, including Active, Index, and 'Model Driven' strategies.

Active funds

In our Active investment strategies, BGI evaluates ESG issues in the same context as any other investment idea or insight. As scientific investors, our insights are based on rigorous research and analysis. New ideas or emerging indicators, such as ESG issues, are assessed from within the firm and from external sources, including academic literature and industry information.

These ideas are ultimately employed if their use is in the best economic interests of  fund performance, which is consistent with our overall investment strategy.

Index funds

Index and Model Driven strategies are generally based on matching or exceeding the performance of indices prepared by third-party data providers that may include certain ESG screens. By definition, index fund providers do not research individual publicly-traded companies and then decide whether to invest in their shares. Instead, they typically select a well known index from a third party provider such as the Standard & Poor's 500 and then invest in this index, which automatically includes the stocks within it.

We have and will continue to offer clients products with Index strategies that may include ESG screens developed by independent third party data providers. In 2008, we launched several new index funds based on environmental or social indices for both institutional and retail investors. For example, the iShares S&P Global Clean Energy ETF is based on an index developed by Standard & Poors to track 30 global companies in clean energy production and clean energy technology and equipment.

Voting policy

Our role as a fiduciary is to act in the best economic interests of our clients. These responsibilities focus mainly on the protection of the fund's assets, as elaborated by legislation and market best practice. Our fiduciary responsibilities shape our actions when voting proxies and, where appropriate and to the extent permitted under the laws of the relevant jurisdiction, engaging with companies. We tailor our voting and engagement approaches to follow local market best practices.

Our voting policies are based on relevant country-level legislation (for example Sarbanes- Oxley in the US), domestic and international corporate governance codes (such as the UK Combined Code, or OECD principles on corporate governance) and market best practice (such as UK Institutional Shareholder Committee principles and Association of British Insurers guidelines). We strive to vote all our holdings (where it is in the best economic interests of our clients). Voting decisions are made in a careful and considered manner after taking into account internal and external research and, where appropriate, communicating directly with senior management and/or dissident shareholders of the relevant company. We report all our voting activity to our clients. We also report our voting on behalf of mutual funds and exchange traded funds publicly via our website.

Engagement on ESG issues

Examples of BGI's recent ESG-focused activities include:

• Attending the UN Investor Summit on Climate Change, to engage with other institutions on the effects of climate change on portfolio companies and the markets generally
• As a member of the Aspen Institute’s Corporate Values Strategy Group, focusing on ways to combat short-termism in the capital markets.

BGI continues to engage with various organisations and stakeholders on investment trends around ESG issues. These stakeholders include clients, non-governmental organisations, data providers, rating agencies, and peer forums.

As at 1 December 2009 Barclays Global Investors (BGI) is no longer part of the Barclays Group.