Federated Hermes Case Case Study Analysis
Background
Federated Hermes was established in the year 1995 and headquartered in the United States. The company measures the progress of engagement by using a stage milestone strategy. Federated Hermes is an investment management company that focuses on creating sustainable wealth. To maintain the sustainability in the portfolio of companies the FH uses the active engagement approach (Kenneth Goh, 2021). The FH engaged with its portfolio companies through Environmental, Social, and Corporate governance (ESG) goals.
The major portfolio company of FH is Ruby Goods Consumer Company. The company has been operating for 50 years. The headquarters of the company are located in Paris. The company mostly offers dairy products on 4 continents covering 30 countries. In Europe, the Ruby Company constantly maintains sustainability and public assurance. In the past years, Ruby adopted many ESG initiatives although the director felt more initiatives could be done to increase the wealth of the company in the future by decreasing the Greenhouse Gas (GHG) emissions in the operations of dairy products farming.
Key Issues
After analyzing and understanding the case study we find some issues and case questions which are described below with multiple alternatives.
Engagement with the CEO to transfer the significance of the inaction
When engaging with the CEO of FH to convey the seriousness of inaction regarding sustainability
Initiatives, you should approach the conversation with professionalism and strategic thinking. Here's how you can effectively communicate the importance of the situation
Prepare Thoroughly
Gather relevant data, case studies, and statistics about the environmental impact of inaction. Be well-informed about the specific challenges faced by FH and the potential consequences of not addressing sustainability issues.
Link to Business Strategy
Clearly articulate how addressing sustainability aligns with FH's business strategy. Emphasize the potential financial benefits, such as cost savings, improved efficiency, and increased competitiveness in the market.
Highlight Reputation and Branding
Discuss the impact of sustainability on FH's reputation and branding. Explain how consumers and clients increasingly prefer environmentally responsible companies, and how a proactive approach can enhance FH's image.
Present Solutions
Offer practical and achievable sustainability solutions tailored to FH's industry and size. Propose specific initiatives that the company can implement to reduce its environmental footprint. Provide a clear roadmap
Approaching the conversation with a well-prepared, respectful, and solution-oriented mindset will enhance your chances of conveying the seriousness of the situation effectively.
Encourage to adoption of science-based targets for GHG reduction
To encourage Ruby's senior management and board to adopt science-based targets for greenhouse gas (GHG) reductions, Lee should:
Educate
Provide clear and concise information about science-based targets, explaining the scientific rationale and benefits for both the environment and the company's bottom line.
Business Case
Present a compelling business case, emphasizing how adopting science-based targets can enhance the company's reputation, attract environmentally conscious customers, and drive innovation.
Financial Impacts
Discuss the potential financial impacts, including cost savings from energy efficiency, reduced waste, and potential revenue from new green products or services.
Set Clear Goals
Outline specific, measurable, achievable, relevant, and time-bound (SMART) goals related to GHG reductions. Having clear targets provides a roadmap for the company.
Engage Stakeholders
Involve key stakeholders early in the process. Address their concerns and demonstrate how science-based targets align with the company’s values and long-term objectives.
Benchmarking
Compare the company's performance and goals with industry peers. Demonstrating how competitors are embracing similar initiatives can create a sense of urgency.
Continuous Communication
Maintain open lines of communication with senior management and the board. Provide regular updates on progress, challenges, and successes related to GHG reductions.
Long-Term Vision
Emphasize the long-term vision. Climate change is a pressing issue, and adopting science-based targets reflects the company's commitment to sustainability and a better future.
By combining these strategies, Lee can effectively engage with Ruby's senior management and board, making a compelling case for the adoption of science-based targets for GHG reductions.
FH’s Relationship with Ruby’s Senior Management
Lee's actions, if conducted professionally and with diplomacy, should not jeopardize FH's relationship with Ruby's senior management. By approaching the topic of science-based targets for greenhouse gas reductions with respect, knowledge, and a focus on the mutual benefits for both companies, she can foster a constructive dialogue. Lee needs to be tactful, understanding the concerns and priorities of Ruby's senior management while effectively communicating the advantages of adopting sustainable practices.
Maintaining a collaborative and respectful tone, emphasizing shared goals and long-term benefits, can strengthen the relationship between FH and Ruby's senior management, even if there are initial hesitations. Transparency, open communication, and a willingness to address any concerns can help build trust and facilitate a positive working relationship.........
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