Federated Hermes questioned over SFOF association 

August 25, 2022

US asset manager Federated Hermes has come under criticism for its apparent association with the State Financial Officers Foundation (SFOF), a vocal anti-ESG group. 

The SFOF is a Republican group, comprised of state treasurers from several ‘red states’ such as Oklahoma and Georgia, which has been campaigning against ESG-friendly federal regulation. 

Read Minerva's previous coverage of Federated Hermes:

https://www.old.manifest.co.uk/investors-warn-big-four-to-integrate-climate-risk-into-audits/

In June 2022, the SFOF sent an open letter to the Securities and Exchange Commission highlighting concerns around ESG disclosure rules. 

Eight objections were raised, including the allegation the rules would violate the First Amendment.  

Federated Hermes – which according to its website is “guided by our conviction that responsible investing is the best way to create wealth over the long term” – is a gold sponsor of this group.  

Criticism of this association has surfaced before and forced the asset manager to issue a statement on 18 August. 

This in part read: “We participate with the events of a variety of organisations, including the Prince of Wales Sustainable Markets Initiative, Robert F. Kennedy Human Rights, the Impact Investing Institute, the International Sustainability Standards Board, Focusing Capital on the Long Term, the National Association of State Treasurers and the State Financial Officers Foundation.  

“We do not set the agendas for these organisations; rather, they operate according to their unique charters and the views of their members and elected leadership. Our participation does not serve as an endorsement of any organisation’s particular perspective on any issue.” 

The statement was signed by Saker Nusseibeh and J. Christopher Donahue, the CEOs of Federated Hermes Limited and Federated Hermes, respectively.  

According to media reports, three Danish pension fund clients of Federated Hermes have continued to voice their disappointment despite this statement.  

Anders Schelde, chief investment officer at Danish pension fund AkadmikerPension said: “It doesn’t add up in our view.” 

Kristine Lund Christiansen, head of ESG at Danish pension fund P+, has asked for a “more concrete” statement from the Federated Hermes on its SFOF association. 

Likewise, a third unnamed Dutch pension fund stated it was also awaiting more information before deciding its course of action.