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Table of Contents
1 A Message From Barnaby Wiener
4 Sustainable Investing at MFS = Responsible Capital Allocation
5 Strategy and Governance
6 Leadership
11 Fundamental Research
15 Thematic Research
17 Risk Management
18 ESG Data and Tools
19 Stewardship – Engagement
23 Stewardship – Proxy Voting
31 Regulatory Developments
32 Corporate Sustainability at MFS
37 Principles for Responsible Investment (PRI)
39 Appendix
12020 MFS Sustainable Investing Annual Report
In its purest form, capitalism is an ingenious mechanism
for directing resources and driving progress. But we
need to remember that its primary purpose is just that:
allocating humanity's aggregate resources on behalf of
humanity. Returns to owners of capital are a byproduct.
They are of course necessary, but only one part of the
process. If companies fail to create value for all their
stakeholders — employees, customers, suppliers,
communities and the environment — they will
ultimately lose their license to operate, and everyone,
investors included, will be the poorer for it.
MFS has been thinking about sustainability for many
years. We have individuals dedicated to sustainability
across various disciplines and departments who play a
critical role in ensuring that we fulfil our stewardship
obligations as a firm. But no investment firm — and
indeed, no company — can hope to 'do sustainability'
simply by hiring a group of experts. Sustainability is
everyone's responsibility. From an investment
perspective, that means that every single one of us,
analyst or portfolio manager, equity or fixed income,
needs to be thinking about the footprint our issuers leave
on society and the environment.
Having done the analysis, what do we do with it?
Clearly, we incorporate it into our valuation, and often
this will be a factor in our deciding not to invest. But
sometimes, when valuation is supportive, we will invest
in companies with elevated environmental, social and
governance (ESG) risks. Does this make us inconsistent?
It does not. We have an obligation to fulfil our clients'
mandates, but more important, we believe engaging
with the companies we invest in has a greater impact
than excluding them from our portfolios. Assuming that
the ultimate objective is improved corporate behaviour,
it would seem to us self-evident that the most effective
way we can contribute to that end is through an active
dialogue with company management and the exercise
of our voting powers. In that context, divestment feels
like a cop-out. It takes the problem off your plate, and
puts it on someone else's.
Barnaby Wiener Portfolio Manager and Head of Sustainability and Stewardship
A Message From Barnaby Wiener
"Sustainability is everyone's responsibility... That means that every single one of us, analyst or portfolio manager, equity or fixed income, needs to be thinking about the footprint our issuers leave on society and the environment."
2 2020 MFS Sustainable Investing Annual Report
No short cuts
Another conviction we hold deeply is that there are no
short cuts in ESG analysis. We utilize a number of firms
who provide us with data and insights into ESG issues,
and they are a useful input in our process, but the idea
that you can outsource the whole problem and distil a
company's ESG profile into a single, simple rating is
anathema to us. Sustainability presents itself in many
shapes and forms; some are brightly lit, others darkly
concealed. Often, the more we dig into these issues
with companies, the more complicated they become.
The only way we can hope to solve the riddle is through
diligent, contextual analysis and judgment. It is arduous
and often far from straightforward, but it is far too
important to offload onto someone else.
To be clear, we are not claiming to have completely
figured this out yet. Our industry has been excessively
preoccupied with short-term financial results and has
not adequately taken into account social and
environmental externalities that are detrimental to the
world and increasingly to the long-term economic
viability of many business models. We cannot claim to
be blameless in this regard. We have made significant
progress in the past few years, but we recognise that we
have to travel further down this road, and we are
determined to do so. As is usually the case when driving
organisational change, there are no magic bullets.
Rather, a combination of education, tools,
encouragement and accountability is driving a shift in
mindset and a reorientation of our investment priorities.
Collaboration is key
The journey towards a more sustainable form of capitalism
is inherently a collaborative one. Many organisations will
no doubt be keen to trumpet their own particular
contribution. But in reality, progress will be the result of
mutual support and joint action. As an asset manager, we
recognise the need to cooperate, not just with asset
owners and companies but also with other asset
managers. We will achieve far more working together
than we would operating alone. With this in mind, we
have joined a select number of high-impact collaborative
initiatives this year, including Climate Action 100+ and
ShareAction's Workforce Disclosure Initiative.
The COVID-19 pandemic, which continues to plague
us, has been a wake-up call in so many ways. In one
sense it has been a huge distraction, but it has also
served to highlight the inherent fragility of our
existence. Most of us have grown up in a period of
peace and prosperity. We have been conditioned to
take so much for granted. In recent years, that
complacency has been challenged repeatedly. We have
had a global financial crisis, growing evidence of a
looming (and existential) climate crisis and now a public
health crisis. At a time when strong leadership has
never been needed more, we are witnessing a collapse
of trust in our democratic institutions. If ever there was
a time for the investment industry to stand up and be
counted, this is it. If not us, who? If not now, when?
Sincerely,
Barnaby Wiener
Portfolio Manager and
Head of Sustainability and Stewardship
A Message From Barnaby Wiener
97 Years of trust"From virtually the beginning, Massachusetts Investors Trust (MIT) has
been distinguished by two significant qualities, apart from its unique redemption feature, that have added greatly to its credibility.
First was the unyielding determination of the Trustees to pursue a conservative investment policy in spite of the prevalent temptations to speculate in the twenties: investments were funneled deliberately into a diversified range of common stocks of established, well-managed companies for the longer term. Second was the Trustee's insistence early in the company's history of making full disclosure of the financial operations of the trust. Accordingly, MIT reports have consistently shown securities owned, changes made in investments in the period, amounts received as income, details of expenses and commissions paid brokers for selling MIT shares — an "open book" policy initiated at a time when business generally revealed little about its operations."
– 50 Years of Trust, H. Lee Silberman, 1974
Founded in March 1924, MIT (the predecessor organization of MFS) was the first
investment trust to offer investors the ability to redeem their shares at will based on
the current net asset value of the fund. As a result of this feature MIT is credited with
being the first open-end mutual fund and creating the modern mutual fund industry.
While we are proud of this legacy, it is not only the innovation of the redeemable
share that has shaped our culture and investment philosophy for nearly 100 years
but also the other distinguishing features Mr. Silberman so aptly describes.
32020 MFS Sustainable Investing Annual Report
Sustainable Investing at MFS = Responsible Capital Allocation
At MFS, we seek to achieve our clients’ long-term economic
objectives by allocating their capital responsibly.
As an active manager, we have always sought to identify
investments that can add sustainable, long-term value for
our clients. While many asset managers have chased market
demand by launching new ESG strategies or relabeling their
existing portfolios, we have maintained a process-focused
approach that ensures ESG considerations are a part of
every fundamental investment decision.
Comprehensively and holistically integrating ESG factors into
our investment process improves our understanding of what is,
and what is not, priced into equity and fixed income valuations.
This helps us identify businesses that we believe have the
potential to offer more sustainable and durable returns.
Our multifaceted ESG integration strategy combines
analytic, bottom-up research and systematic risk
management, as well as active ownership through
engagement and proxy voting.
A variety of activities, processes, data sets and governance
structures supports our ability to make sound, long-term
investment decisions on behalf of our clients. The
illustration below highlights the principal areas where we
focus our time and attention. This report provides insight
into our activities in each of these areas.
ESG Integration
enables responsible value creation
Fundamental ResearchDetailed, bottom-up research of materiality based on company, industry and geographic factors
Strategy & GovernanceMultiple working groups and committees ensure integration acrossinvestment and stewardship activities
Risk ManagementDeep awareness of ESG
risks at individual companyand portfolio levels
ESG Data & ToolsData from multiple vendors
and specialists accessibleto all investors
StewardshipUsing engagement and proxy
voting to influence governance and business practices and reduce risk
Thematic ResearchProprietary insights on emerging ESG themes that impact multiple sectors and regions
Sustainable Investing Framework
4
52020 MFS Sustainable Investing Annual Report
ESG Strategy and Governance
In 2009, we formed the MFS Responsible Investing
Committee to ensure that our equity and fixed income
investment processes were benefiting from the systematic
integration of financially material ESG considerations. Since
the formation of the committee over a decade ago, the firm
has developed a strong governance structure around our
ESG activities and taken many other actions to accelerate the
implementation of sustainable investing practices.
MFS maintains three distinct governing bodies that provide
broad oversight of our sustainable investing activities: the
MFS Sustainability Group, the MFS Responsible Investing
Committee and the MFS Proxy Voting Committee.
The MFS Sustainability Group was formed in 2017 and
includes the firm's president, chief investment officer, head
of sustainability and stewardship, asset class CIOs, chief
risk officer, ESG analysts and other senior investors and
executives. Its purpose is to guide and accelerate the
implementation of sustainable investing practices across
the firm and to institutionalize ESG integration as a
fundamental component of MFS’ investment process and
corporate culture.
The MFS Responsible Investing Committee was
established in 2009 to ensure the effective integration of ESG
considerations across our investment and proxy voting
activities. In one of its first actions, the committee drafted
and issued the MFS Policy on Responsible Investing and
Engagement. Today, the committee maintains and updates
the policy as necessary and monitors adherence to ESG-
related regulatory issues and external commitments, such as
the Principles for Responsible Investment (PRI). Additionally,
MFS' internal audit team has reviewed our ESG integration
process in light of our responsible investing policy.
The MFS Proxy Voting Committee is co-chaired by our chief
investment officer and comprises senior leaders from our
investment, legal and global investment operations departments.
The committee establishes proxy voting engagement goals and
priorities and oversees the administration of the MFS Proxy Voting
Policies and Procedures.
2009Creation of Responsible Investing Committee
2010MFS becomes a PRI signatory
2013MFS hires first ESG
research analyst (Boston)
2018MFS hires second ESG
research analyst(Singapore)
2020MFS establishes the role of Head of Sustainability
and Stewardship
2011Substantial revision & enhancement of proxy policies
2017MFS Sustainability Group formed
2019MFS hires third ESG research analyst (Fixed Income)
The history behind our formal ESG Integration Process
Leadership
At MFS, sustainable investing describes our fundamental investment process; it is not a separate discipline with different inputs or
outcomes. As such, our process requires that all of our investment professionals are actively engaged in, and responsible for, its success.
In order to facilitate the adoption, implementation and enhancement of sustainable investing practices across the firm, we employ a
number of individuals positioned to provide strategic leadership on sustainable investing and support the effective integration of
sustainability considerations across teams and disciplines.
InvestmentsBarnaby Wiener, one of our most seasoned portfolio managers, serves as head of sustainability and stewardship. A leader and culture
carrier who has long been a champion of sustainability, Barnaby works closely with our ESG research analysts to engage with investment
leadership, portfolio managers and analysts to ensure that all of our investors truly understand and own sustainability in their research and
portfolio management duties. He also plays a strategic role with regard to issuer engagement on sustainability issues.
Our investment team includes two equity analysts and one fixed income analyst dedicated solely to ESG research. They have done
much to advance our investment team's thinking on ESG topics. Our ESG analysts fulfill a critical role in facilitating our sustainable
investing efforts. However, they are not intended to be the source of all ESG research. Their role is to support and enhance the ongoing
research into ESG issues performed by our portfolio managers and analysts.
Barnaby Wiener – Head of Sustainability and Stewardship
Barnaby joined MFS in 1998 as a research analyst. He became a portfolio manager in 2003 and
currently manages the firm's Prudent Wealth, Prudent Capital and Prudent Investor strategies. He
previously held the role of director of European Research and was co-portfolio manager of MFS
International Value and Global Value equity strategies. Prior to joining MFS, he was an equity
research analyst for both Merrill Lynch and Crédit Lyonnais. He also served as a captain in the British
Army. Barnaby is a graduate of Oxford University and the Royal Military Academy, Sandhurst. He is
based in London.
6 2020 MFS Sustainable Investing Annual Report
Leadership
ESG-dedicated Investment Professionals
Rob Wilson – Research Analyst
Before joining MFS as the firm's first ESG-dedicated research analyst in April 2013, Rob spent
six years as a "traditional" equity analyst at American Century Investments. Prior to that, he spent
five years at Bain & Company, working as a manager in the Financial Planning & Analysis group.
Rob earned a BS in business administration from Boston University and an MBA from the University
of Chicago. He is based in Boston.
Pooja Daftary – Research Analyst
Pooja joined MFS in 2009 as an investment research associate. In 2012, she left the firm to complete
her Master of Business Administration degree before returning in 2014 as a "traditional" equity
research analyst. She served in that role until 2018, when she assumed her current position. Pooja
earned a BA from Mount Holyoke College and an MBA from Harvard Business School. She is based
in Singapore.
Mahesh Jayakumar, CFA, FRM – Research Analyst
Mahesh joined MFS in 2019 as a fixed income analyst following a year as a senior portfolio manager
in Beta Solutions at Oppenheimer Funds. He previously worked for State Street Global Advisors for
ten years, serving as a senior portfolio manager for the first nine, before transitioning to a senior ESG
investment strategist role for his final year with the firm. Mahesh began his career in the financial
services industry in 2008. He earned a BS in Information Systems from Purdue University, an MS in
Computer Science from Boston University and an MBA from the MIT Sloan School of Management.
He is based in Boston.
72020 MFS Sustainable Investing Annual Report
.
Broad ownershipAt MFS, sustainability is at the core of our corporate identity. We believe that
achieving true ESG integration requires the participation of our entire firm, not
just our investment team. A major priority for 2020 was the development of a
comprehensive training program that offers noninvestment personnel the
opportunity to deepen their understanding of sustainable investing. Launched in
June, the course includes foundational, intermediate and advanced learning
tracks that cover the history, evolution and current state of sustainable investing.
The curriculum also includes detailed information about MFS' approach to sus-
tainable investing through ESG integration and stewardship and discussions
about evolving ESG topics, trends and research. At the end of the third quarter,
over 1,000 MFS employees were actively participating in the course or had
completed all the course modules.
8 2020 MFS Sustainable Investing Annual Report
Proxy Voting, Legal and Regulatory
Our team of two dedicated proxy analysts manages day-to-day proxy voting and engagement activity. The team employs a collaborative
approach in its decision making, incorporating information and perspectives from our global team of investment professionals, corporate
disclosures and engagement discussions, and a variety of third-party research tools. This process fosters well-rounded viewpoints on key
issues, which we believe leads to well-informed voting decisions that are in the best long-term economic interests of our clients.
In early 2020, we tasked a member of our legal team with focusing exclusively on assessing and monitoring the ESG-related
regulatory landscape to ensure that MFS is aware of all the relevant regulations in jurisdictions where we do business, and that we
are responding to them appropriately.
Margaret Therrien – Proxy Voting Analyst III
Margaret is an analyst on MFS' proxy voting team. She is responsible for analyzing case-by-case
voting issues and engaging with MFS' portfolio companies on issues relating to compensation, ESG
and board oversight. Prior to joining MFS in January 2016, Margaret worked as a credit risk analyst at a
biotechnology company. She has also worked in academia, researching corporate governance trends.
Margaret earned a BS in business administration from Boston University. She is based in Boston.
Herald Nikollara – Proxy Voting Analyst II
Herald is an analyst on MFS’ proxy voting team. He is responsible for proxy voting and corporate
governance-related research and analysis and day-to-day voting operations, as well as assisting with
reporting and engagement activities. Prior to joining MFS in May 2018, Herald worked as a paralegal
at a Boston-based law firm. He earned a BS in criminal justice from the University of Massachusetts
Boston. He is based in Boston.
Brad Wilson – Counsel
Brad serves as counsel for MFS. In this role, he supports MFS' sustainability program by tracking and
advising MFS' business groups on regulatory developments, supporting MFS' governance process
and supporting other sustainability initiatives. Brad joined MFS in 2015 as an associate counsel. He
assumed his current role in 2020. He previously spent four years as an associate general counsel for
Franklin Templeton and one year as an analyst for FINRA. Prior to that, he worked as a law clerk for
Franklin Templeton and the US Securities and Exchange Commission. Brad earned a BA in political
science and BBA in finance from the University of Georgia and an MBA and JD from the University of
Maryland. He has been a member of the New York State Bar since 2012.
Leadership
92020 MFS Sustainable Investing Annual Report
Client Engagement and Thought Leadership
We have three individuals dedicated to developing thought leadership and engaging with our clients and the investment industry
on ESG issues. This team plays an important role given the high level of interest from industry participants in understanding how
asset managers such as MFS approach sustainable investing.
Vishal Hindocha, CFA – Managing Director, Investment Solutions Group
Vishal is a managing director in the Investment Solutions Group. In this role, he works with clients to
develop solutions and provides insights on global investment trends and best practices. His
responsibilities include conducting proprietary research and helping to represent the firm's
investment insights to clients around the world. Vishal joined MFS in 2016 as a director on the Client
Relations and Consultant Relations teams. He previously served as a senior investment consultant
and team leader at Willis Towers Watson. Vishal earned a Bachelor of Science degree in economics
from University College London. He holds the Chartered Financial Analyst (CFA) designation.
He is based in London.
Mason Gregory – Associate Director, Investment Solutions Group
Mason is an associate director in the Investment Solutions Group. He is responsible for client
initiatives, thought leadership, market research and investment communications related to ESG and
sustainable investing. Mason joined MFS in 2009 and previously held the role of RFP manager for
North America. Prior to joining MFS, Mason was a product specialist covering public and private real
estate equity strategies as well as ESG product development for The Tuckerman Group. Prior to that,
he was a product analyst at State Street Global Advisors. Mason earned a BA in English literature and
communications arts from St. Lawrence University. He is based in Boston.
Daniel Popielarski – Associate Analyst, Investment Solutions Group
Dan is an associate analyst in our Investment Solutions Group. He is responsible for client initiatives,
thought leadership, market research and special projects related to ESG and sustainable investing.
Dan joined MFS in 2012; his previous positions at MFS include client service representative and
institutional relationship management coordinator. He earned a BS in business administration from
the University of Vermont. He is based in Boston.
Leadership
102020 MFS Sustainable Investing Annual Report
11 2020 MFS Sustainable Investing Annual Report
Fundamental Research
Our equity and fixed income investment teams rely on deep fundamental research and a long-term perspective to select securities
they believe have the potential to produce sustainable returns throughout an economic cycle. This approach requires the
incorporation of information from a variety of sources and an awareness of multiples viewpoints. We believe that the integration of
ESG factors into our research is essential as these issues often impact the long-term, sustainable value of businesses.
Sustainable Investment Steering Group and thematic working groups
To further our ESG integration
efforts, we created the
Sustainable Investment
Steering Group within our
investment team. Comprising
our head of sustainability and
stewardship, CIO, ESG analysts
and various other members of
our investment team, the
group's purpose is to provide
guidance and feedback on our
ESG integration strategy and
execution.
We also formed four working
groups to lead efforts related to
key sustainability pillars:
Climate Change, Societal
Impact, Governance and
Sovereign Risk. Each group
includes our ESG analysts and a
cross-section of investment
team members, including
specialists and generalists from
fixed income and equity. The
purpose of these groups is to
stimulate discussion across the
investment team and develop
practical frameworks to inform
our investment decision-
making process and corporate
engagement strategy.
Enhanced access to ESG research and data
We want to ensure that our
investment team has easy
access to all internal research,
along with the best available
third-party resources. Invest,
our proprietary online global
research collaboration
platform, organizes both
internal and external ESG
research and data for each
issuer. This includes ESG
commentary written by
covering equity and fixed
income analysts, links to
relevant internal research
notes and our proprietary
Sector Map materiality
framework that highlights key
ESG issues for the issuer's
industry/sub-industry.
Adjacent tabs include
information from various
external research providers
that is specific to the issuer.
Additionally, in 2020, our ESG
analysts developed an ESG
dashboard that allows
members of our investment
team to view a broad
spectrum of ESG metrics for
up to 100 securities
simultaneously.
Education program
We have developed a program
of monthly seminars for the
entire investment team. The
program was launched in early
2021 and will feature a wide
range of mostly external
presenters, including asset
owners and managers,
academics and other industry
stakeholders who have an
interesting perspective that
promises to enhance our
team's understanding of
sustainability-related issues.
Sector and asset class research
Our eight sector research
teams are continually
incorporating ESG-focused
research into their meeting
schedules and have set a new
goal of dedicating at least one
meeting a quarter to a
discussion of relevant
sustainability topics. Likewise,
our fixed income sub-asset-
class teams are dedicating
meetings solely to ESG issues
affecting sovereigns,
municipals, high yield, etc.
4321WORKING GROUPS DATA EDUCATION ASSET CLASS
Fundamental Research
In our view, ESG information is fundamental data that must be considered along with all other material
information. Our ESG research framework for equities and corporate bonds comprises both analytic
and systematic elements designed to ensure our global investment team can efficiently and effectively
identify and analyze the material ESG issues impacting their investment decisions.
Investment Roundtable
On the agenda of our virtual
Investment Roundtable event
in September 2020 were
several sustainability related
keynotes and thematic
presentations. Kasper Rorsted,
CEO of Adidas, provided
insights into his company's
sustainability journey during
his presentation and Q&A with
the investment team.
Additionally, our ESG analysts
delivered a presentation on
how rising inequality is
affecting society, companies
and stakeholders. This was
followed by breakout sessions
in which various members of
the investment research and
portfolio management teams
discussed the implications of
this important social theme on
their portfolios and sector
coverage.
Portfolio sustainability reviews
As part of our systematic
approach to ESG risk
management, all MFS
strategies are now subject to
annual sustainability reviews
focused exclusively on ESG
risks. These reviews cover a
wide variety of sustainability
metrics and complement the
ESG dimension of our
semiannual portfolio risk
review process, which is
described below. Select
strategies were reviewed
during the fourth quarter of
2020, and we will continue
to roll out this process
throughout 2021.
Performance evaluation and compensation
The analysis of ESG risks and
opportunities is part of our
investment process, and the
long-term performance of
each individual reflects this
integration. In addition to
assessment on a quantitative
basis, a portion of our
investment team members'
compensation is based on
qualitative factors, and ESG is
now an explicit element of the
qualitative assessment of
performance, alongside other
factors such as teamwork,
communication and
collaboration throughout the
investment process.
765ROUNDTABLE REVIEWS PERFORMANCE
12
13 2020 MFS Sustainable Investing Annual Report
MFS Transformative CapitalESG integration has often been viewed as primarily an exercise in risk management.
This is largely because ESG factors represent a diverse array of issues that are
increasingly shaping our future as a society and many investors fear that compa-
nies will fail to adequately anticipate and adapt to new ways of doing business.
However, ESG factors are also a source of opportunity as technology and industry
evolve to meet the changing needs of society. We believe companies that are
positioned to take advantage of these ESG tailwinds and create value for society
and the environment have the potential to outperform.
The MFS® Transformative Capital strategy is a high-conviction, global equity
portfolio that seeks to invest in companies proactively meeting environmental or
social needs. Portfolio Manager Nicole Zatlyn and our global team of research
analysts qualitatively identify companies that among other things 1) derive a
significant percentage of their revenue from products or services that address
environmental or social needs, 2) have boards that act in the best long-term
interests of their stakeholders, 3) exhibit a strong and unique culture and 4) are
trading at a discount to their long-term growth prospects.
The goal of Transformative Capital is to maximize returns while simultaneously
investing in companies that serve an environmental or social need. We believe
these goals are aligned and that companies that serve an environmental or social
purpose and create value for all of their stakeholders can sustainably compound
earnings, free cash flow and returns over a full market cycle.
This portfolio was launched October 1, 2019, and is currently funded exclusively by MFS seed capital.
142020 MFS Sustainable Investing Annual Report
Fundamental Research
Fixed incomeDuring 2020 we continued to focus on improving our ESG integration frameworks for all fixed income sub-asset classes, including investment-
grade corporates, sovereigns, US municipals, high yield and securitized fixed income. Some examples of this work are described below.
Sovereign debt
Members of the newly formed
Sovereign Risk Working Group
were tasked with developing an
ESG sovereign risk framework to
support and enhance our
investment decision-making
process across all asset classes.
Once codified, it will enable the
broader investment team to look
at country risk through an ESG
lens and better understand how it
might be impacting their
investments. This working group
includes emerging and developed
market sovereign fixed income
analysts, our fixed income ESG
analyst and one of our emerging
market equity portfolio managers.
Municipal bonds
The head of our municipal fixed
income research team and our
fixed income ESG analyst
participated in the PRI's Sub-
Sovereign Debt Advisory
Committee, which is working to
develop ESG integration guidance
for US municipal bonds. This is
expected to mirror similar
guidance available for other fixed
income sub-asset classes. We also
undertook due diligence on
research providers that offer
sustainability data for US
municipal bond issuers. Relative to
corporates, issuer-specific ESG
data is still scarce for municipals
and analysts rely largely on other
sources such as regulatory and
government-mandated
disclosures for relevant
information. We selected a vendor
that can provide demographic,
socioeconomic and climate risk
data, which will improve our ability
to assess the physical risks faced
by municipal issuers.
High yield
During the year, our fixed income
ESG analyst engaged in robust
conversations with his sector
counterparts to analyze material
ESG issues in their issuer
coverage. One of the most
productive ways to increase
awareness of both the materiality
and the implications of these
issues is for the ESG analyst to
deliver a thematic presentation to
the broader team and then
facilitate a discussion. Members
of the High Yield research team
covered a wide variety of issues in
this way in the second half of the
year. For example, our covering
analyst for one of the largest
subscription streaming services
discussed the importance of
governance factors that could
have a financial impact, including
founder control and impending
digital tax legislation. Our analyst
covering gaming companies
discussed the potential for
increased regulation to protect
communities from the perceived
harmful effects of gambling. The
analyst covering autos and auto
parts companies discussed the
implications of the shift to electric
vehicles and its effect on financials
and credit metrics in the medium
and long term. Our UK-based
analyst touched on various
governance red flags that he has
encountered over the course of his
career and discussed how and
when they may be an early
indicator of credit downgrades and
potential defaults in the European
high-yield issuer universe.
Sustainability bonds
We continue to own themed
bonds, including green bonds,
social bonds and sustainability-
linked bonds across various
portfolios. Our exposure to these
bonds more than doubled in 2020,
reflecting greater issuance and our
increasing asset base. Social bond
issuance soared as a result of the
COVID-19 crisis as both
corporates and governments
issued bonds to fight the
pandemic on a variety of fronts.
Issuance approached $150 billion
for the full year compared with $18
billion in 2019.1 Examples of the
use of proceeds include improved
access to health care, loans to
small businesses and an increased
supply of protective equipment.
Cumulative green bond issuance
in 2020 surpassed the $1 trillion
level in late September as that
market continued to draw in new
issuers and investors.
1 Source: Bloomberg.
Social Bond Issuance
$160
$120
$80
$40
$0
BIL
LIO
NS
2013 2014 2015 2016 2017 2018 2019 2020
$0.1 $0.6 $2.3 $2,2 $9.1 $11.9 $18.8
$147.7
15 2020 MFS Sustainable Investing Annual Report
Thematic Research
During the past year, our investment team produced in-depth research on a variety of ESG themes we believe to be financially
material to companies we own.
Culture and diversity
Culture and diversity have remained important topics for our investment and proxy voting teams for several years, but we stepped
up our research and engagement in these areas during 2020. This work led to many changes in our investment decision-making
process. For example, we reduced our exposure to a health care company due to ongoing corporate culture and governance risks.
In another example, corporate culture influenced the ratings of two companies covered by our US life science tools analyst. He
assigned a 1 rating (buy) to one company and a 2 rating (hold) to the other due in large part to his view on culture and its associated
impact on innovation within each firm.
Labor and income inequality
Labor and income inequality remained a key theme in 2020 due to the COVID-19 pandemic, which brought to light the challenges faced
by low-wage and hourly workers. During the year, MFS analysts and portfolio managers took these actions:
■ Engaged with a large number of companies regarding their employee practices
■ Spoke to members of multiple trade unions to obtain labor's viewpoints
■ Held sector team meetings to review data on employee wages, satisfaction and other factors
■ Offered a thematic presentation on the topic to the entire investment team during our Global Investment Roundtable in September
As an example of investment outcomes from this research, one of our portfolio management teams chose to sell an apparel retailer
due in part to poor labor practices (particularly very low wages) while adding to an existing holding that we believe exhibits much
better practices.
Modern slavery
Modern slavery took on additional importance as a thematic research topic for our team in 2020. Building on research initially conducted
by our ESG research analysts, our team spent time evaluating the supply chain practices of companies in multiple industries, most
notably apparel and footwear. We engaged both with companies and their key suppliers, and our team hosted and participated in calls
with various external experts on the topic.
This research increased our confidence in a footwear company. We evaluated the quality and frequency of company audits for tier 1, 2
and 3 suppliers, measures undertaken to hold erring suppliers accountable, and C-suite involvement in supply chain auditing and safety.
We found the company's commitment to improving the transparency of its supply chain to be industry leading, which boosted our
confidence in its brand's competitive moat as well as in its ability to manage the risk of supply chain disruption. MFS increased its
ownership of this company throughout the year.
We have made some of our research on modern slavery available to our clients and other stakeholders through our research publication
series ESG in Depth – Modern Slavery and Forced Labor.
Climate change
Climate change has been a central focus for our global sector teams. In 2020, we expanded available climate data and improved the
investment team's access to it. Every MFS investment professional now has several data sets to draw from when analyzing year-over-year
changes in scope 1, 2 and 3 emissions, water usage, waste recycling and other important environmental measures. Over the course of
the year, our capital goods, consumer cyclicals, consumer staples, financials and utilities sector teams all performed significant sector-
and stock level analysis of potential climate risks and opportunities. Our sector teams have also identified which companies have
162020 MFS Sustainable Investing Annual Report
Thematic Research
set science-based targets aligned with the goals of the Paris
Accord. In 2020, we engaged on climate-related issues with
sustainability leaders, management teams and board members at
many companies, and these in-depth discussions around
decarbonizing to achieve net-zero emissions are ongoing.
Plastic waste
Plastic waste was an important theme for our team in 2020. Our
ESG analysts developed a framework for assessing the
environmental impacts of single-use plastic packaging and the
potential implications for the entire plastics value chain. This
framework initially focused on the chemicals, plastic packaging,
consumer staples and waste management industries. It provided a
basis for identifying the risks and opportunities associated with
plastic packaging, especially with regard to changing consumer
preferences, regulation and costs, that may affect the competitive
positioning and profitability of many companies over the long
term. Our analysts' evaluation included engagements with various
companies and the development of data sets to compare company
progress versus stated targets. These data sets will be used for
further engagement.
Many investment decisions have been impacted by this research.
Most notably, our US-based packaging analyst upgraded an
aluminum can manufacturer from a 2 to a 1 rating based primarily
on her view that lower plastic bottle consumption due to consumer
concern and the regulatory costs associated with emissions and
plastic pollution would likely cause a resurgence in the demand for
aluminum cans. Aluminum cans have an emissions footprint similar
to that of recycled plastic and are infinitely recyclable, whereas the
recyclability of plastic is severely limited by current recycling
technology. In addition, one of our Singapore-based equity
analysts reduced the growth rate in his long-term terminal value
calculation for a plastics supplier to account for regulatory risks
and consumer shifts away from plastic. More on this topic can be
found in our research publication series ESG in Depth: Sustainable
Packaging – Risks to the Plastic Value Chain.
Although our team researched and debated a number of other
ESG themes during 2020, such as Chinese VIE structures,2
corporate tax practices and technology ethics, the examples above
illustrate the breadth of our thematic ESG research and its
importance to our investment process.
2 A Variable Interest Entity (VIE) is a legal business structure in which an investor has a controlling interest despite not having a majority of voting rights.
Risk Management
Our cultural emphasis on risk management is incorporated into all facets of our
investment process. At MFS, the goal is not to minimize risk but rather to understand
its sources and effectively manage it. The risk management process strives to ensure
that each strategy takes an appropriate level of risk that is disciplined and consistent
with the investment philosophies of its mandate while also meeting long-term
investment objectives.
At MFS, the goal is not to minimize risk but rather to understand its sources
and effectively manage it.
We consider both risks and opportunities when evaluating ESG factors and trends, and
we have implemented systematic processes to help our investment team manage
ESG-related risks at the security and portfolio levels. The annual portfolio sustainability
reviews described above are designed by our ESG analysts to provide portfolio
managers with a comprehensive view of the ESG risks and opportunities in their
portfolios, based on MFS' own internal research and viewpoints. Separately, the
semiannual portfolio risk review process, which is conducted by the firm's chief risk
officer and respective asset class CIOs, covers a wide variety of factors, including third-
party ESG ratings and perspectives. Each portfolio's ESG score is evaluated against
that of its benchmark, and ESG rating changes since the last review are discussed.
Both the annual portfolio sustainability reviews and the semiannual risk reviews are
intended to prompt additional research and collaboration among the investment team.
In addition to these reviews, automated reports highlighting third-party ESG ratings
changes are disseminated to covering analysts on an ongoing basis.
17
182020 MFS Sustainable Investing Annual Report
ESG Data and Tools
The ESG data landscape is changing rapidly, as are the tools available for analyzing the data.
During 2020, MFS' ESG data integration strategy advanced substantially. We enhanced our investment team's access to both internal
and external ESG data and insights. We broadened the scope of data we receive from existing third-party ESG research providers and
added a new provider that offers insights on municipal bond issuers. This will help our investment team better understand the physical
risks faced by municipal issuers and enhance integration of other ESG factors in this important fixed income sub-asset class.
To house our proprietary ESG research and relevant third-party data, MFS maintains easily accessible, issuer-specific ESG pages within
our investment research system. Notes written by our analysts and portfolio managers that are tagged as containing ESG content are
automatically linked to these pages, enabling the broader team to quickly identify and evaluate internal viewpoints on material ESG
factors impacting the companies they cover or hold in a portfolio.
During 2020, we added our proprietary ESG "sector maps" to each company ESG page. MFS' sector maps outline the key
environmental and social issues we believe are material to the industry in which a company operates. Each topic shown on a
company's map includes an assessment of the magnitude of the risk or opportunity, an overview of the topic (including key data
points to analyze) and potential engagement questions.
Over the past year, we have increased the amount of external ESG research available on these company-specific ESG pages.
Our team can now access multiple providers' data and reports from a centralized location, making it a powerful ESG research tool.
Over the past year, we have increased the amount of external ESG research available on these company-specific ESG pages. Our team
can now access multiple providers' data and reports from a centralized location, making it a powerful ESG research tool.
In addition to increasing the availability of data within our research database, we have enhanced the team's access to ESG data through
other means. For example, in 2020, our ESG analysts developed an ESG dashboard that instantly and simultaneously displays a wide
variety of third-party data and insights for up to 100 issuers. This includes data associated with emissions, water usage, diversity, injury
rates, employee attrition, data security and bribery and corruption practices, executive compensation and governance information,
audit quality, and controversies.
ESG issues are complex, interconnected and evolving too quickly for a single rating or data point to reflect the full extent of
sustainability-related risks and opportunities facing a company or investment. There are still many inadequacies when it comes to the
availability and comparability of ESG data, which is one reason that we believe there is no substitute for in-depth issuer analysis.
Materiality assessment cannot be automated.
19 2020 MFS Sustainable Investing Annual Report
Stewardship – Engagement
Engagement is at the heart of our sustainability agenda. As an active manager, we believe open communication with issuers is vital
to ensuring that ESG risks and opportunities receive the necessary attention from management teams and other stakeholders, and
we strive to maintain a regular dialogue with companies over time. Increasingly, we are using our privileged access to executive
teams to engage with them on social and environmental issues that are, or could be, material to their business. Recognizing the
critical importance of the board in influencing corporate culture and strategy, as well as appointing the executive team, we are
making a point of setting up periodic meetings with nonexecutive directors to complement our discussions with management. We
prefer conversation to confrontation and expect to make more progress that way, but we are willing to use our vote or other means,
if necessary, to expedite change.
To enable our investment and proxy voting teams to more accurately track, monitor and report on the many engagements occurring
across our global investment platform, we have embedded a new engagement tracking tool in our global research system. The first
phase of this tool went live during the fourth quarter of 2020.
We engage with issuers in several ways, as shown below.
MFS Engagement Activities
FormalInvestment-Led
CollectiveInformalInvestment-Led
FormalProxy-Led
Informal investment-led engagementOur investment team engages with companies on a continual basis, sharing ideas and asking ESG-related questions of
management teams during in-house meetings, onsite visits and investment conferences.
Formal investment-led engagementOur investment team also pursues what we regard as "formal" ESG engagements. More limited in number than informal
engagements, formal engagements occur when other avenues have failed to produce a desired outcome.
Collective engagementMFS believes that collective (or collaborative) engagement can generate positive impacts for industries, individual companies and a
wide range of stakeholders, including shareholders. We actively participate in industry initiatives, organizations and working groups
that seek to improve and provide guidance on corporate and investor best practices, ESG integration and proxy voting issues.
Stewardship – Engagement
Below we outline some of the collaborative engagements
we participated in during 2020.
CDP Science-Based Targets Campaign MFS signed on to
the CDP Science-Based Targets Campaign in early
September. The campaign provides a platform from which
CDP signatories can support the Science-Based Targets
Initiative (SBTi) by encouraging companies to adopt
science-based emissions reductions targets. Science-based
targets enable companies to align with Paris Agreement
goals, increase the effectiveness of their scenario analyses
and provide their stakeholders with greater transparency
around climate-related risks and opportunities.
ShareAction Workforce Disclosure Initiative (WDI) MFS
joined the WDI in September 2020. The WDI focuses on how
companies treat their employees with the goal of improving
both the quantity and quality of company disclosure on
employee management practices. The WDI survey provides
companies a standardized format for reporting on such issues
as human rights diligence, workforce composition, diversity
and inclusion, wage levels and pay gaps. Our ESG and
covering analysts have been engaging with our portfolio
companies to improve participation in the WDI survey. We
have also been using WDI data to enhance our due diligence
on employee management practices at a number of different
companies. In an effort to offer disclosure where we seek it,
MFS has also completed the WDI survey.
Investors Against Slavery and Trafficking Asia-Pacific
(IAST APAC) MFS signed on to IAST APAC in October 2020,
with the objective of encouraging companies to improve
transparency and operational processes that address modern
slavery, trafficking and labor exploitation in the supply chain.
In supporting the initiative, our aim is to join other investors in
clarifying what steps companies should take to combat
modern slavery and to help them take action.
Climate Action 100+ (CA100+) In November 2020, MFS
joined CA100+, an investor initiative focused on engaging with
the world’s highest emitters of greenhouse gas (GHG) to
ensure that they implement a strong governance framework,
that they take steps to reduce emissions across their value
chain and that they provide enhanced disclosure in accordance
with Task Force on Climate-Related Financial Disclosures
(TCFD). We support CA100+’s mission of delivering emissions
reductions in the real economy as opposed to ducking the
issue by simply divesting from high emitters.
Over the past several years, our
investment team has spent a
great deal of time discussing
the importance and potential
impact of corporate culture on
sustainability. This work, and
our ongoing discussions on
culture and diversity with a
wide variety of companies, led
us in 2020 to issue a letter to
our 100 largest holdings
requesting the explicit disclo-
sure of each company's work-
force composition, diversity
and employee turnover data.
As investors, we believe this
information is important and
can have a material impact on
our investment decisions. We
also feel strongly that we
should be willing to disclose
the same data we expect our
portfolio companies to dis-
close. Accordingly, the letter
included our company data on
these metrics as a show of
good faith.
202020 MFS Sustainable Investing Annual Report
21 2020 MFS Sustainable Investing Annual Report
Stewardship – Engagement
Collective Investor Statements
MFS signed on to a number of investor statements over the course of 2020 that are focused on issues we believe to be material, or potentially material, to companies held in our portfolios. These included statements calling for the following:
n Living incomes and wages for workers in agricultural supply chains
n Improved transparency in supply chains and ESG due diligence in the luxury fashion sector
n The mitigation of modern slavery, human trafficking and labor exploitation
n The prevention of PFAS pollution by removing "forever" chemicals from food packaging
n Urgent action on the "stranded seafarer" crisis
Formal proxy-led engagementMFS believes that open communication with issuers on proxy voting and corporate governance matters is an important aspect of our
ownership responsibilities. Our proxy voting team engages in dialogues with management teams, board members and other senior
representatives of MFS' portfolio companies through in-person meetings, conference calls and formal letter-writing campaigns.
MFS' long-term approach to investing inspires a long-term approach to engagement. Our multiyear engagement horizon typically allows
us to develop strong relationships with our portfolio companies. As a result, we are able to have more candid and insightful discussions as
we foster these long-term dialogues. During the 2020 calendar year, the proxy team led 111 engagements with 94 distinct portfolio
companies across 11 different markets (see Appendix).
When engaging with companies from a proxy perspective, MFS aims to do the following:
Communicate our voting policies and the rationale behind our voting decisions
We aim to be proactive and transparent regarding our policies, approach to proxy voting and expectations of portfolio companies following
low support on a shareholder vote. MFS maintains a letter-writing initiative that focuses on encouraging our portfolio companies to
respond to particular areas of concern for shareholders. In 2020, the firm sent letters to the boards of 28 companies encouraging them to
respond in an appropriate and meaningful way to the concerns demonstrated by shareholders at their annual general meeting.
Exchange views on relevant ESG issues and advocate for meaningful progress
Given our long-term view, our engagements are often focused on encouraging sustainable progress over multiple years. However, in
many instances, our portfolio companies have responded promptly to actionable feedback from shareholders.
For example, over the course of 2020, members of our proxy team conducted multiple meetings with representatives of an agricultural
machinery company to discuss our concerns regarding the company's governance practices, board composition and compensation
policies. The board recently appointed a new lead independent director with enhanced duties (along with three new committee chairs),
adopted term limits for board leadership positions and updated hedging and pledging policies.
We also engaged with members of the board from an American gas and electric company regarding the diversity of both its board and wider
workforce. The company is working to improve its diversity, as evidenced by a number of concrete changes made, such as the nomination
of a female director to the board, updating corporate governance guidelines to promote the active recruitment of women and minority
candidates in the board candidate pool, enhancing disclosure around board refreshment and agreeing to provide EEO-1 disclosure.3
3 An EEO-1 Report is a government form that requests information about employees' job categories, ethnicity, race, and gender. Employers with at least 100 employees must submit one to the US Equal Employment Opportunity Commission (EEOC) and the US Department of Labor (DOL) every year.
222020 MFS Sustainable Investing Annual Report
Stewardship – Engagement
Address thematic and long-term engagement priorities
In advance of the 2020 proxy season, we published the MFS 2020 Proxy Season Preview, which summarized recent amendments to
our proxy voting policies, shared MFS' outlook and expectations for the upcoming proxy season and discussed long-term
engagement priorities and thematic issues of interest to our proxy voting committee.
Our 2020 engagement priorities were focused on corporate culture, board gender diversity and board composition issues. When
engaging on diversity, we seek to understand a board's refreshment and recruitment processes, as well as the demonstrated impact
of diversity and inclusion initiatives. It is important for us to see an active and transparent board evaluation and refreshment process
wherein new board members are considered annually. With respect to the broader workforce, we look for initiatives aimed at
strengthening diversity and investments in a culture of belonging and inclusion. Accountability for employee diversity in the
workforce can be demonstrated by disclosing employee diversity metrics and goals, making progress toward achieving diversity
related goals, hiring diverse talent and fostering inclusive leadership. Reviewing diversity-related goals and metrics such as
percentage of underrepresented minorities in the workforce, promotion rate and pay equity analysis are a few examples of tools
helpful to shareholders when they are assessing the impact of company-wide diversity initiatives.
Measure our impact
Over time, we have found that robust engagement combined with thoughtful proxy voting can have a strong positive effect on ESG
practices. Two examples of that positive impact are outlined below.
■ Our proxy team has engaged over 20 times with a US based aerospace/technology conglomerate over the past eight years to
communicate our expectations as shareholders. Most recently, we engaged with the company on political and lobbying
disclosures to monitor the alignment of such contributions with the company's stewardship commitments. In response to our
feedback and voting activity, the company has improved related disclosures by publishing a list of contributions in excess of
$50,000 made to trade associations.
■ Members of our proxy voting and investment teams engaged with a US-based financial services company both before and after the
company's 2020 annual shareholder meeting. These discussions were primarily focused on executive compensation. Prior to the
shareholder meeting, we discussed the board's approach to measuring and rewarding performance. In light of the amount of pay
driven by qualitative assessment as opposed to quantitative metrics, MFS did not support the advisory vote on executive
compensation. Discussions following the meeting to explain the rationale behind our voting decision prompted modifications to the
company's compensation program such that quantitative measures now figure much more prominently in executive remuneration.
Proxy Engagement by Year■ 2018 ■ 2019 ■ 2020
0
30
60
90
120
150
180
Compensation IssuesGovernance IssuesEnvironmental & Social Issues
123
92
55
145
127
9099
67
83
23 2020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
MFS maintains its own publicly available proxy voting policies and procedures, which provide a framework that guides our proxy
voting decisions at approximately 2,000 meetings in over 50 different markets each year and include procedures governing how we
address potentially material conflicts of interest.
When considering ballot items on which the MFS Proxy Policies do not provide explicit guidance, we combine the collective expertise of our dedicated
proxy voting analysts with the unique perspectives and experience of our global team of investment professionals.
When considering ballot items on which the MFS Proxy Policies do not provide explicit guidance, we combine the collective expertise
of our dedicated proxy voting analysts with the unique perspectives and experience of our global team of investment professionals.
This enables us to formulate viewpoints with multiple inputs, which we believe leads to well-informed voting decisions.
The MFS Proxy Voting Committee oversees the administration of the MFS
Proxy Policies. We believe that having a diverse range of perspectives leads
to a thoughtful and collaborative process that guides MFS' voting decisions
and policy development. Ted Maloney, MFS' chief investment officer, and
Susan Pereira, vice president and assistant general counsel, co-chair the
Committee, which consists of senior members of our Investment, Legal
and Global Investment Support departments. In order to mitigate the
potential for material conflicts of interest, individuals whose primary duties
relate to client relationship management, marketing or sales are prohibited
from inclusion in the committee.TED MALONEY SUSAN PEREIRA
Historically our annual proxy voting disclosures have reported our voting activity for the traditional proxy season, which begins
July 1 of the preceding year and runs through June 30 of the reporting year. In light of changing regulatory expectations, going
forward we will report our proxy voting activities on a calendar year basis. In order to facilitate this transition, we have included
proxy voting commentary and statistics for both the 2020 calendar year and the traditional proxy season (July 1, 2019 – June 30, 2020)
in this report.
242020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
Reviewing the 2020 calendar year
During the 2020 calendar year, MFS was eligible to vote on 22,976 ballot items at 1,992 shareholder meetings across 60 markets. MFS
voted shares at approximately 99% of these meetings, with the remaining meetings not voted due to share-blocking concerns (nine
meetings), late receipt of ballot (one meeting) or market-specific voting impediments (13 meetings). The map below shows the number of
meetings voted around the world along with the overall percentage of meetings voted within each region.
During the 2020 calendar year, MFS voted against:
n management recommendations on approximately 7% of all ballot items globally.
n management recommendations on at least one ballot item at approximately 39% of all shareholder meetings.
n approximately 10% of executive remuneration proposals.
n board members at six companies for failing to adequately respond to shareholder concerns.
n 104 directors over diversity concerns.
Canada87 meetingsvoted (100%)
UK & Ireland248 meetingsvoted (94.4%)
US & US Territories726 meetingsvoted (100%)
Latin & South America129 meetingsvoted (94.2%)
Europe295 meetingsvoted (96.4%)
Middle East & Africa36 meetingsvoted (100%)
Australia & New Zealand51 meetingsvoted (100%)
Asia397 meetingsvoted (100%)
25 2020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
Pushing for progress through our voting activities
Shareholder proposals can often be used as a catalyst to bring about positive change on ESG issues. In 2020, the most prevalent
shareholder proposals were those relating to climate change, lobbying and political activities, human capital management and
independent board chairs.
During 2020, shareholder proposals relating to environmental issues typically centered on increased disclosure around climate change,
community-environmental impact and specific reductions in GHG emissions. In general, shareholder support for climate change
proposals increased from 2019, and four climate change proposals received majority support. MFS was entitled to vote on two such
proposals, both at multinational energy companies, and supported both. The firm also supported a shareholder proposal requesting that
a multinational package-delivery and supply-chain-management company publish a report on climate change disclosing how it plans to
manage GHG emissions. We supported this proposal because we believe such disclosure is valuable for shareholders seeking to
ascertain how the company is managing climate related risks.
As they have in past years, shareholder proposals requesting greater disclosure of corporate political contributions represented a
significant share of social issues covered in 2020, accounting for 47 of the 128 social shareholder proposals MFS voted on. Of the 43
proposals we supported, two received the majority support of shareholders. We look forward to engaging with these companies around
the enhanced disclosure of political contributions and lobbying activities.
For: 25%Against: 75%
For: 59.4%Against: 40.6%
For: 52%Against: 48%
70%
21%
9%
How MFS Voted on Shareholder Proposals
■ Environmental proposals
■ Social proposals
■ Governance proposals
262020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
Shareholder proposals requesting the disclosure of diversity policies and goals at both the board and workplace level were also a focus
during 2020. MFS voted to support a proposal requesting an employment diversity report at a multinational hospitality company. In our
view, these disclosures help shareholders better assess the company's diversity initiatives and its management of related risks. We also
voted in favor of a majority-supported proposal aimed at the adoption of a policy on board diversity at a global logistics company. We
look forward to reviewing the company's response on this matter.
Among the governance-related shareholder proposals we reviewed during 2020, the most prevalent topic was the separation of the chair
and CEO roles. MFS supported 15 out of 38 of these proposals. We analyze these proposals on a case-by-case basis, evaluating the board
structure to ensure robust independent oversight along with any unique facts and circumstances of the existing leadership structure, to
determine what we believe would be the optimal structure for the company. For example, we supported a proposal aimed at separating
the roles of CEO and chair as part of the next CEO transition at a global media and technology company because we believe this large,
complex organization would be best served by the most independent form of oversight.
During the 2020 calendar year, MFS voted for:
n 100% of proposals to declassify the board.
n 100% of proposals seeking majority voting in director elections.
n 100% of proposals to provide the right to act by written consent.
n 100% of proposals to eliminate supermajority voting rights.
n 100% of proposals to provide certain shareholders the ability to nominate a certain number of board nominees (adopt a proxy access right).
27 2020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
Reviewing the 2020 season (July 1, 2019–June 30, 2020)During the 2020 proxy season, MFS expressed its views on a number of ESG issues through its voting activity.
Executive payMFS believes Say on Pay votes are an effective mechanism for expressing our view on a company's executive pay practices and can
help ensure that they are aligned with shareholder interests and do not incentivize excessive risk taking. Competitive pay packages
are necessary to attract, motivate and retain executives; however, excessive or short-term-oriented compensation schemes are
unlikely to be in the best long-term interest of shareholders.
How Often MFS Voted Against Executive Pay ■ 2018 ■ 2019 ■ 2020
0
10
20
30
40
50
All CountriesUnited StatesUnited KingdomSwitzerlandCanadaBrazilAustralia
6.0%
10.2% 10.9%
41.2%
44.1%
28.6%
1.4%2.8%
1.4%2.9%
1.6%
6.6% 5.6%
1.9%3.9%
11.9%10.7%
9.1%
6.2%7.5%8.1%
During the 2020 proxy season, MFS voted against or abstained on executive pay proposals approximately 9% of the time. This compares
with 11% during the 2019 proxy season. As illustrated below, our rationale for voting against executive compensation practices ranged
from disconnects between company performance and executive pay to poor disclosure of pay.
Reasons for Deeming Pay Excessive
0 5 10 15 20 25 30
Multiple / Other Issues
Employment Agreements
Pay Magnitude
Pay-for-Performance Disconnect
Performance Targets / Metrics
Disclosure Concerns 30%
21.4%
20.7%
11.1%
6.4%
10.4%
282020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
On a global scale, the number of remuneration report "strikes" in Australia continues to increase. MFS voted against approximately
11% of remuneration-related proposals at Australian portfolio companies during the 2020 proxy season as compared with 10% and
4% in the 2019 and 2018 proxy seasons, respectively. This increase is primarily due to a growing number of issuers amending
executive remuneration structures to include problematic performance metrics or targets compounded by concerns over
corresponding disclosure.
We note an increase in remuneration-related proposals in European markets given the amendments to the Shareholder Rights
Directive (SRD II). Remuneration reports are now subject to an annual vote, and the content of remuneration disclosures going
forward will contain more specific performance criteria disclosure. While the impact of voting remains to be seen, as compliance
becomes mandatory in 2021, the uptick in remuneration consultation engagements with European issuers has been notable.
We believe that a well-balanced board with diverse perspectives is the foundation of sound corporate governance and that
gender diversity is one of the many ways corporate boards can enhance the diversity of their views, skill sets and collective expertise.
Finally, the revised UK Corporate Governance Code stipulates that pension contribution rates for executive directors should be
aligned with those available to the workforce. MFS will vote against remuneration-related proposals where companies do not take
action in line with this provision of the code, and we engage with companies lagging in this regard.
Director electionsWe believe that a well-balanced board with diverse perspectives is the foundation of sound corporate governance and that gender
diversity is one of the many ways corporate boards can enhance the diversity of their views, skill sets and collective expertise. In
2019, we amended the MFS Proxy Policies to require votes against the nominating and governance committee chairs of the boards
of US companies where less than 15% of directors are female. In 2020, we expanded this amendment to include Canadian and
European issuers. As a result, we voted against nominees at more than 100 companies across Canada, Europe and the US during
the 2020 proxy season.
We also believe that the amount of time required of US public company directors has grown significantly in recent years, and we are
mindful of the impact of excessive service on outside boards. During the 2020 proxy season, we voted against director nominees at
90 US companies due to excessive outside service.
MFS may also vote against director nominees if the board has not taken responsive action on an issue of concern to shareholders.
For example, if a shareholder proposal receives majority approval at a prior shareholder meeting and the board has not acted on the
resolution, MFS will typically vote against the entire board's reelection at subsequent AGMs. Similarly, if a significant number of
shareholders has expressed dissatisfaction with a company's executive pay program and the board has not addressed the issue,
MFS may vote against members of the compensation committee or the full board. In 2020, MFS voted against board members at
five companies for failing to adequately respond to shareholder concerns (compared with four in 2019). The firm also maintains a list
of directors who we believe do not warrant support at any company based on their poor corporate governance track records.
During 2020, MFS voted against approximately 6.0% of director nominees globally (compared with 7.2% in 2019).
29 2020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
How Often MFS Voted Against Directors■ 2018 ■ 2019 ■ 2020
0
5
10
15
20
All CountriesUnited StatesUnited KingdomSwitzerlandJapanFranceCanadaBrazilAustralia
7.2%
1.9%
8.6% 8.2%
3.2% 2.9%
1.4%
20.0%20.0%
12.3%
1.5%
6.1%
4.8%
12.7%
7.4%
11.7%
18.7%
0.9% 1.2% 1.3%
5.5% 6.0%
7.2%7.5%7.0%
9.4%
4.1%
Shareholder proposalsDuring the 2020 proxy season, more than 550 proposals were submitted to companies by shareholders seeking a vote on a wide
variety of ESG issues. The most prevalent topics included climate change, lobbying and political activities, human capital
management and independent board chairs.
For: 25%Against: 75%
For: 59.4%Against: 40.6%
For: 52%Against: 48%
70%
21%
9%
How MFS Voted on Shareholder Proposals
■ Environmental proposals
■ Social proposals
■ Governance proposals
Environmental IssuesDuring the 2020 proxy season, shareholder proposals relating to environmental issues most often called for the increased disclosure of
climate change impacts or environmental impacts on communities, with some calling for specific reductions in GHG emissions. We note
that the number of environmental proposals put to a vote has decreased over the past five years; however, average support continues to
increase, with more proposals receiving majority support in 2020 than in 2019.
302020 MFS Sustainable Investing Annual Report
Stewardship – Proxy Voting
MFS generally supports proposals that request additional disclosure on the impact of environmental issues such as climate change on a
company’s operations unless we believe that the company already provides enough information on the topic to allow shareholders to assess
the relevant risks. The firm supported 33% of the climate change-related proposals we were eligible to vote on globally. Overall, MFS supported
25% of 52 proposals relating to environmental issues during the 2020 proxy season (compared with 38% in 2019). The change is largely
attributable to the higher percentage of environmentally focused shareholder proposals submitted outside the United States that we deemed
overly prescriptive or poorly drafted. For example, we do not support proposals calling for companies to amend their articles to mandate
government involvement. Nor do we support proposals aimed at prohibiting the provision of financial support to a specific company.
Social issuesMFS voted on 124 shareholder proposals relating to social issues during the 2020 proxy season, supporting 61% of these proposals
(compared with 71% in 2019). Shareholder requests for the increased disclosure of corporate political contributions were at center
stage yet again, accounting for over 35% of proposals in this category. These proposals typically focused on the increased disclosure
of oversight mechanisms related to company political spending. MFS generally supports such shareholder proposals unless we
believe that a company already provides enough publicly available information to enable shareholders to evaluate the potential risks
associated with political contributions.
Shareholder proposals related to diversity efforts were also a focus during 2020. MFS supported 57% of proposals requesting the
reporting of a company's policies and goals with respect to diversity at both the board and workplace level (similar to the 60%
supported in 2019). The firm supported 39% of all diversity-related proposals that we reviewed during the 2020 proxy season. MFS
supported 100% of the proposals that we were entitled to vote on requesting the disclosure of EE0-1 data, as we believe that
disclosure in a consistent format allows shareholders to assess and manage the risks and opportunities associated with human
capital management. MFS supported 33% of proposals relating to board diversity that we were entitled to vote on. We firmly believe
that voting against shareholder proposals is warranted when they are poorly drafted or inappropriately targeted. For example, we
declined to support proposals seeking disclosure of the political ideology of board candidates. The nuanced scope of shareholder
proposals requires careful review and analysis to determine which merit support.
Corporate governance issuesCorporate governance has typically been the most common subject of shareholder proposals. Overall, MFS voted on 404
governance-related shareholder proposals during 2020, supporting 56% (compared with 52% in 2019).
The number of proposals seeking the right of shareholders to call special meetings increased in 2020 after halving the previous year.
The number of proposals requesting the right to act by written consent, after remaining relatively flat in 2019, increased by nearly
50%, to 42. Such proposals received, on average, 37% support in 2020 — a slight decrease from the 40% in 2019.
Use of proxy advisory firmsMFS analyzes all proxy voting issues within the context of the MFS Proxy Policies, which are developed internally and independent of
third-party proxy advisory firms. MFS uses a proxy advisory firm to perform various administrative services related to proxy voting,
such as vote processing and recordkeeping.
MFS also receives research reports and vote recommendations from multiple proxy advisory firms. However, these reports are one
input among many in our comprehensive analysis, which includes other sources of information (e.g., proxy materials, company
engagement discussions, other third-party research and data, etc.) that have a greater bearing on how we determine the votes that
we believe are in the best long-term economic interest of our clients. MFS has due diligence procedures in place to help ensure that
the research we receive from our proxy advisory firms is accurate and to reasonably address any potentially material conflicts of
interest of such proxy advisory firms. This due diligence includes an analysis of the adequacy and quality of the advisory firm staff, its
conflict of interest policies and procedures and its independent audit reports. MFS also reviews the proxy policies, methodologies
and peer-group-composition methodology of our proxy advisory firms at least annually. Additionally, MFS requests quarterly
reports from our proxy advisory firms that include disclosure of any violations or changes to conflict of interest procedures.
31 2020 MFS Sustainable Investing Annual Report
Regulatory Developments
Over the past year, we have witnessed a dramatic increase in the regulation of
sustainable investing around the globe. The new regulations are largely intended
to curb the mislabeling of investment products marketed as sustainable (so
called "greenwashing") or to implement reporting frameworks involving
forward-looking or risk-based metrics.
For example, the European Union (EU) is in the process of implementing a suite
of transformative regulations that will compel issuers to disclose information on
sustainability risks and practices in addition to introducing new sustainability
disclosure and labeling standards for asset managers. Specifically, the EU
regulation on sustainability-related disclosures in the financial services sector
(SFDR) and the EU regulation on the establishment of a framework to facilitate
sustainable investment (the Taxonomy Regulation) create a number of new
reporting, disclosure and definitional standards that will reshape the investment
product landscape.
In the Asia Pacific region, several prominent jurisdictions, including Hong Kong,
Singapore and New Zealand, have introduced their own sustainability labeling
schemes or enhanced environmental risk management disclosure and reporting
requirements for investors.
In the United States, financial services industry regulators have been more hesitant to
introduce new rules addressing sustainable investing and have generally relied on
existing regulatory frameworks. The exception to this is the US Department of Labor
(DOL), which adopted a pair of rules in late 2020 — despite significant industry
pushback — designed to codify the use of sustainability factors in investment and
proxy-voting practices only where such factors have a material economic impact. In
early 2021, the DOL indicated that it will not enforce these rules until a further review
is completed. This action is likely indicative of a more accommodating tone that the
administration of US President Joe Biden will set on sustainable investing.
We continued to see an increase in the proliferation of nonregulatory frameworks
concerning sustainability disclosure and reporting for issuers and investors.
Finally, we continued to see an increase in the proliferation of nonregulatory
frameworks concerning sustainability disclosure and reporting for issuers and
investors. Specifically, the Investment Company Institute recently issued a
recommended framework for classifying sustainable investing strategies and the
CFA Institute issued a draft sustainable disclosure framework for asset managers.
Meanwhile, issuer disclosure standards such as the TCFD and the Sustainability
Accounting Standards Board (SASB) continued to gain traction.
322020 MFS Sustainable Investing Annual Report
4Do the Right ThingWe have an unwavering commitment to acting in the best
interest of clients and show respect and compassion for our
community and each other.
3Never SettleWe hold ourselves to high standards, assume accountability for
our work and believe intellectual curiosity is essential to
strengthening our expertise.
2Lead, Don’t FollowWe act with purpose and authenticity, stay
true to our beliefs and have the courage to go against the
grain.
1Succeed togetherWe collaborate across departments and regions, take a humble
approach to our work and leverage diverse perspectives to
reach better outcomes.
OU
R V
ALU
ES
Corporate Sustainability at MFS
In 1924, MFS launched the first US open-end mutual fund, opening the door to the capital markets for
millions of everyday investors. Today, as a full-service global asset manager serving retail and institutional
investors around the world, MFS still serves a single purpose: to create long-term value for clients by
allocating capital responsibly. This purpose drives our investment approach, which combines collective
expertise, thoughtful risk management and long-term discipline. Supported by our culture of shared values
and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover
what we believe are the best investment opportunities in the market.
At MFS, sustainability is a core tenet of our corporate culture. We believe that corporate citizenship is
critical to the success of our business. Creating value for our employees, our communities and our
environment is not just a fundamental responsibility, it is foundational to our ability to create long-term
value for our clients. Below are the four core values that we share at MFS.
Our values
33 2020 MFS Sustainable Investing Annual Report
Corporate Sustainability at MFS
Our corporate structure and governance MFS is a majority-owned subsidiary of Sun Life of Canada (US) Financial Services Holdings, Inc., which in turn is an indirect majority-
owned subsidiary of Sun Life Financial, Inc. (a diversified financial services organization). MFS has been a subsidiary of Sun Life since
1982. While the firm operates with considerable autonomy, this partnership provides significant resources, stability and structure.
MFS currently operates from offices located in 20 countries around the globe, including nine investment centers — Boston, Hong
Kong, London, Mexico City, São Paulo, Singapore, Sydney, Tokyo and Toronto.
In everything we do, we believe that harnessing the power of a diverse, collective intelligence is an important determinant of better
outcomes. Collaboration, discussion and debate is therefore a significant part of how committees operate at MFS. MFS' senior
leadership comprises the MFS Management Committee, which has the authority to carry out all matters relating to the oversight
and sustainability of the firm. The committee is responsible for setting strategic direction, determining the annual operating and
capital budgets, establishing priorities for key investments in the business, recommending major policy decisions to the company's
board of directors, developing new projects and performing corporate planning for MFS and its subsidiaries.
Under the MFS Management Committee sit three supervisory committees: the Investment Management Committee, the Enterprise
Risk Management Committee and the Internal Compliance Controls Committee. There are 27 other functional committees helping
MFS with areas such as strategy, risk management and technology. The committees span departments and geographic locations at
MFS and play a crucial role in protecting and guiding the firm. Governance is an important function, but the committees also gather
input and reach a consensus when it comes to strategic decisions.
We believe that these committees play an important role in fostering the culture that we strive to maintain and the transparency of
the decision-making process at MFS.
TORONTO I BOSTON I MEXICO CITY I SÃO PAULO I LONDON I TOKYO I HONG KONG I SINGAPORE I SYDNEY
The Power of Our Investment Platform
MFS RESEARCH OFFICES
• OTHER MFS OFFICES
Corporate Sustainability at MFS
Our impact on the environmentMFS has long been committed to improving the environmental outcomes
of its business operations. This focus has resulted in a variety of initiatives to
reduce the firm's impact on the environment. Since 2012, MFS'
headquarters location in Boston, Massachusetts has met LEED Gold
standards, and the firm, when possible, has applied similar measures and
standards across its global footprint when renovating existing offices or
building out new space. Over the past decade, we have also implemented a
wide variety of programs such as server consolidation, low-energy lighting
and appliance use, expanded recycling and pull printing to help reduce
waste and energy consumption.
MFS will achieve net-zero carbon emissions from business operations in 2021.
In 2020, to accelerate this work, we established a global, cross-functional
environmental impact working group to improve our ability to understand,
measure and minimize our overall environmental footprint. The group is
tasked with developing clear goals and initiatives to reduce our
environmental impact. As part of this effort, and in partnership with our
parent organization Sun Life, we have adopted a carbon neutrality plan.
This program ensures that MFS will achieve net-zero carbon emissions from
business operations in 2021. Going forward, the environmental impact
working group will examine all aspects of MFS business operations to
identify where improvements can be made to further reduce emissions and
resource consumption.
34
35 2020 MFS Sustainable Investing Annual Report
Corporate Sustainability at MFS
Our culture, our people, our places At MFS, we have always viewed culture as critical to an organization’s long-term success. An important part of our own culture is
investing in our people and the communities where we live and work.
Diversity and inclusion
We value different people, cultures and ideas. Diversity
and inclusion (D&I) are a mindset that drives how we
operate as a firm and serve our clients. We fully
embrace that mindset because we believe leveraging
diverse perspectives and encouraging everyone to
speak up promotes innovative thinking and better
decision making. Our strength comes from the unique
and valuable perspective that each person brings, and
we believe only the collective intelligence of an array of
highly competent individuals will bring success.
Diversity is not just something we believe in; it’s
ingrained in our culture.
Our strategy focuses on three key aspects of diversity
and inclusion.
Diversity and inclusion are foundational to the work we
do as active managers, essential to our sustainability
and critical to our ability to create value responsibly for
clients. For an active manager like MFS, diversity makes
it possible to bring different perspectives into our
investment process. Given that we rely heavily on
human capital for that purpose, we aim to attract,
retain and develop the best talent from around the
world. This spirit of collaboration and inclusivity
directly benefits our clients and enables everyone at
MFS to thrive and prosper. We have built our D&I
strategy according to these beliefs and our
commitment to making our firm, industry and world a
more inclusive place.
To learn more about diversity and inclusion at MFS
please visit our website where you can review our
Diversity and Inclusion Annual Report.
Philanthropy and volunteerism
Corporate citizenship is in our culture, and it is a true
passion for our employees. We are proud of the work
we do each day to help millions of investors achieve
their financial goals. We are equally proud of the
investments we make in our communities through the
charitable organizations working to make them better
places to work and live. Across the firm and around the
globe, MFS participates in programs to empower our
communities, whether it is promoting better health,
creating opportunities for education, enhancing self-
sufficiency or increasing civic engagement.
The philanthropic portion of our corporate citizenship
program supports organizations through both
monetary donations and the volunteer efforts of our
employees. We have built this program globally based
on input from our employees, and we concentrate our
efforts on the causes most important to them. The
program has established major sponsorships with
philanthropic organizations in the regions served by
our global offices. These include causes related to
health (cancer in particular), education, basic needs
such as food and housing, and opportunity —
particularly for children. MFS believes that investing to
help the underserved in our communities is not only
our responsibility as a corporate citizen but also
essential to the economic well-being and global
competitiveness of our economies and thus benefits us
all. Please visit our website for information on the
charities we support.
TalentBuild a more diverse workforce and leadership
CultureSustain and enhance an inclusive workplace
Community Improve industry and global diversity and inclusion
Corporate Sustainability at MFS
Investing for impact
In 2017, MFS established an impact investment
portfolio. Using the firm's own capital, we invest in a
range of impact-driven projects and ventures. These
investments range widely across geography, sector
and asset class, but each organization is directly
tackling a social or environmental problem while also
seeking to deliver a financial return. Last year we made
two new investments: Flash Forest, a Canadian
reforestation company using drone technology to
accelerate the pace and scale of planting trees; and
Social Finance UP Fund, which helps finance the
education of disadvantaged people in the US to enable
them to move into higher-paying jobs. Repayment is
contingent on participants reaching relevant income
hurdles after graduating. We also made follow-on
investments in two existing holdings: &Wider, a Dutch
company that uses direct worker reporting technology
to provide its customers with better insights into
working conditions in their supply chain; and One
Mighty Mill, a Massachusetts-based company whose
mission is to bring fresh-milled, nutrient-rich wheat to
communities that lack abundant access to healthy
food options.
This portfolio is part of MFS internal corporate responsibility efforts and is not available for client investment.
An important part of our own
culture is investing in our
people and the communities
where we live and work.
362020 MFS Sustainable Investing Annual Report
37 2020 MFS Sustainable Investing Annual Report
Principles for Responsible Investment (PRI)
Since joining the PRI 11 years ago, our focus on ESG issues has deepened and our sustainable investing capabilities have expanded.
As a condition of membership, the PRI requires its signatories to report on their responsible investment activities annually. In 2018, for
the first time, MFS achieved scores of A or better and scored higher than the median in each of our reported modules. In 2019 and again
in 2020, MFS maintained its high marks from the PRI, garnering an A+ in six out of seven scored modules in both years.
While we are proud of this result and feel our assessment scores reflect the progress we have made, sustainable investing is not just
about making the grade. It is about understanding what is important — what is most material for investors — and finding the investment
opportunities that we believe will add the most long-term value for our clients.
The table below displays MFS' assessment scores for the past six years, showing steady progress both from an absolute perspective
and relative to our peers.
PRI Assessment Scores
Module
2015 2016 2017 2018 2019 2020
MFS Median MFS Median MFS Median MFS Median MFS Median MFS Median
Strategy and Governance* B B A B A+ A A+ A A+ A A+ A
Listed Equity - Incorporation A A A A A A A+ B A+ B A+ A
Listed Equity - Active Ownership A B A B A B A B A + B A + B
Fixed Income - SSA A C A B A+ B A+ B A+ B
Fixed Income - Corporate Financial** B C B B A B A+ B A+ B
Fixed Income - Corporate Non-Financial B C B B A B A+ B A+ B
Fixed Income - Securitized B E B E A C A C A B
n Blue shaded scores indicate where MFS scored higher than the median n Gray shaded areas represent time periods prior to the inception of a module
* Prior to 2016, the Strategy and Governance Module was called “Overarching Approach.” **Prior to 2016, “Fixed Income – Corporate” was a single module.
B C
For additional information on signatory reporting and assessment, please visit https://www.unpri.org/signatories. To receive copies of
MFS’ PRI Assessment and Transparency reports please contact your relationship manager or Mason Gregory ([email protected]).
39 2020 MFS Sustainable Investing Annual Report
Appendix
During the 2020 calendar year, members of MFS' proxy voting team engaged with senior representatives of 94 distinct portfolio companies, listed below.
3M Company
Abbott Laboratories, Inc.
Accenture plc
Adecco Group
AGCO Corporation
Akzo Nobel NV
Amazon.com, Inc.
Ameren Corporation
ANSYS, Inc.
Aptiv Plc
Bayer AG
Berry Global Group Inc.
Bio-Techne Corporation
BJ's Wholesale Club Holdings, Inc.
Black Knight, Inc.
Boston Scientific
Burberry Group plc
Cadence Design Systems, Inc.
CenterPoint Energy, Inc.
Chipotle Mexican Grill, Inc.
Chubb Limited
Cigna Corporation
Citigroup, Inc.
Coca-Cola European Partners
Cognizent Technology Solutions, Inc.
Colgate-Palmolive Company
Compagnie Financiere Richemont SA
Compass Group plc
CVB Financial Corporation
Danaher Corporation
Danone SA
Dassault Systemes SA
Diageo Plc
Dollar Tree, Inc.
Duke Energy Corporation
Element Solutions, Inc.
Equifax, Inc.
EssilorLuxottica SA
Everbridge
FirstEnergy Corp.
Fiserv
FleetCor Technologies, Inc.
Halma plc
Harley-Davidson, Inc.
Honeywell International Inc.
IMAX Corporation
Industrial Logistics Properties Trust
Interactive Corp.
Intertek Group plc
Intuit, Inc.
JPMorgan Chase & Co.
Kellogg Company
Kerry Group Plc
Komercni Banka, A.S.
Linx
Lockheed Martin Corporation
Marriott International, Inc.
Marsh & McLennan Companies, Inc.
Masimo Corporation
Mastercard Incorporated
Mondelez International, Inc.
Monolithic Power Systems, Inc.
MSCI Inc.
NCR Corporation
NextEra Energy Partners LP
Northrop Grumman Corporation
NXP Semiconductor
Omnicom Group, Inc.
Plains All American
PPG Industries, Inc.
Prosperity Bank
PTC, Inc.
Raytheon Technologies Corporation
Ryanair Holdings Pl
Samsung Electronics Co., Ltd.
Schlumberger Limited
ServiceNow, Inc.
Signature Bank New York
Silk Road Medical
Stamps.com Inc.
Stanley Black & Decker, Inc.
State Street Corporation
Stericycle, Inc.
Take-Two
Targa Resources Corp.
Tesco plc
The Goldman Sachs Group, Inc.
The Hartford Financial Services Group, Inc.
The Southern Company
Twist Bioscience Corporation
United Technologies Corporation
VICI Properties
Weir Group
Wolters Kluwer
MFSE-BRO-799200-5/21
Printed on recycled paper 48234.2
Please keep in mind that a sustainable investing approach does not guarantee positive results.Please recycle this material when finished.
Statistics included in this report are calculated based on accounts for which MFS clients have fully delegated proxy voting authority pursuant to the MFS Proxy Voting Policies and Procedures. With the exception of the meetings voted statistics listed on page 29 of this report, all voting statistics exclude instances where MFS did not cast a vote. Statistics also do not include instances where an MFS client may have loaned shares and therefore was not eligible to vote. Statistics are calculated on a meetings-level basis. All engagement statistics listed above include only those managed by the MFS proxy team.
As an active manager, please be advised that the companies named in this report may no longer be held by an MFS client at the time that this report is published.
The views expressed are those of the author(s) and are subject to change at any time. These views are for informational purposes only and should not be relied upon as a recommendation to purchase any security or as a solicitation or investment advice from the Advisor.
Unless otherwise indicated, logos and product and service names are trademarks of MFS® and its affiliates and may be registered in certain countries.
Distributed by: U.S. - MFS Investment Management; Latin America - MFS International Ltd.; Canada - MFS Investment Management Canada Limited. No securities commission or similar regulatory authority in Canada has reviewed this communication
Please note that in Europe and Asia Pacific, this document is intended for distribution to investment professionals and institutional clients only.
U.K./EMEA - MFS International (U.K.) Limited ("MIL UK"), a private limited company registered in England and Wales with the company number 03062718, and authorized and regulated in the conduct of investment business by the U.K. Financial Conduct Authority. MIL UK, an indirect subsidiary of MFS, has its registered office at One Carter Lane, London, EC4V 5ER UK/MFS Investment Management (Lux) S.à r.l. (MFS Lux) – MFS Lux is a company is organized under the laws of the Grand Duchy of Luxembourg and an indirect subsidiary of MFS – both and provides products and investment services to institutional investors in EMEA. This material shall not be circulated or distributed to any person other than to professional investors (as permitted by local regulations) and should not be relied upon or distributed to persons where such reliance or distribution would be contrary to local regulation; Singapore - MFS International Singapore Pte. Ltd. (CRN 201228809M); Australia/New Zealand - MFS International Australia Pty Ltd (" MFS Australia") holds an Australian financial services licence number 485343. MFS Australia is regulated by the Australian Securities and Investments Commission.; Hong Kong - MFS International (Hong Kong) Limited ("MIL HK"), a private limited company licensed and regulated by the Hong Kong Securities and Futures Commission (the "SFC"). MIL HK is approved to engage in dealing in securities and asset management regulated activities and may provide certain investment services to "professional investors" as defined in the Securities and Futures Ordinance ("SFO").; For Professional Investors in China – MFS Financial Management Consulting (Shanghai) Co., Ltd. 2801-12, 28th Floor, 100 Century Avenue, Shanghai World Financial Center, Shanghai Pilot Free Trade Zone, 200120, China, a Chinese limited liability company regulated to provide financial management consulting services.; Japan - MFS Investment Management K.K., is registered as a Financial Instruments Business Operator, Kanto Local Finance Bureau (FIBO) No.312, a member of the Investment Trust Association, Japan and the Japan Investment Advisers Association. As fees to be borne by investors vary depending upon circumstances such as products, services, investment period and market conditions, the total amount nor the calculation methods cannot be disclosed in advance. All investments involve risks, including market fluctuation and investors may lose the principal amount invested. Investors should obtain and read the prospectus and/or document set forth in Article 37-3 of Financial Instruments and Exchange Act carefully before making the investments.
In 1924, MFS launched the fi rst US open-end mutual fund, opening the door to the markets for millions of everyday investors. Today, as a full-service global investment manager serving fi nancial professionals, intermediaries and institutional clients, MFS still serves a single purpose: to create long-term value for clients by allocating capital responsibly. That takes our powerful investment approach combining collective expertise, thoughtful risk management and long-term discipline. Supported by our culture of shared values and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover what we believe are the best investment opportunities in the market.