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Corporate Governance / 
Responsible Investment Policy

Responsible Investment Statement


General Statement

Dimensional’s investment philosophy is based on the belief that in liquid capital markets, prices reflect all available information about fundamental values. As such, traded securities in those markets are fairly priced and reflect the aggregate risk and return expectations of all market participants.

This belief in markets means that Dimensional expects any value or long-term profitability attributable to a company’s current environmental, social, and governance ("ESG") efforts to be already reflected in a company’s price. A company can, however, improve its ESG practices. Dimensional believes the most effective way to achieve this is through the promotion of good corporate governance practices, with strong boards representing shareholders’ interests, including the avoidance of unnecessary environmental and social risks. Dimensional believes these efforts may be reflected in increased valuations through a combination of lower discount rates and higher cash flows. For this reason, Dimensional primarily focuses its responsible investment efforts on improving governance practices in companies within the investment portfolios it manages on behalf of its clients.

Further, Dimensional believes that investors, particularly long-term shareholders with significant positions, are well positioned to positively influence a company’s governance practices. Dimensional, whose clients’ portfolios, in aggregate, are comprised of many long-term significant holdings, is well positioned to influence the corporate governance practices of these companies. While Dimensional broadly incorporates ESG considerations into the investment process, the primary means through which Dimensional seeks to influence governance practices are proxy voting, engagement initiatives, industry participation, and internal projects and research.


United Nations Principles for Responsible Investment ("UNPRI")

As part of its commitment to strong governance, Dimensional became a signatory to the UNPRI in August 2012. The UNPRI provides a framework for incorporating ESG considerations into investment and ownership practices. Dimensional commits to adopt and implement the following six principles where consistent with its fiduciary duty to clients.

Principle 1: Dimensional will incorporate ESG issues into investment analysis and decision-making processes.

Principle 2: Dimensional will be an active owner and incorporate ESG issues into its ownership policies and practices.

Principle 3: Dimensional will seek appropriate disclosure on ESG issues by the entities in which it invests.

Principle 4: Dimensional will promote acceptance and implementation of the Principles within the investment industry.

Principle 5: Dimensional will work to enhance its effectiveness in implementing the Principles.

Principle 6: Dimensional will report on its activities and progress toward implementing the Principles.


Responsible Investment Initiatives

Corporate Governance Committee and Group

Dimensional has established a Corporate Governance Committee that reports to the Investment Committee. The Corporate Governance Committee is composed of senior executives, officers, directors, and members of the portfolio management team and is responsible for administering Dimensional’s proxy voting policy, considering complex proxy voting cases, and overseeing the Corporate Governance Group.

A Corporate Governance Group has been established as a day-to-day working unit to implement policies and oversee operations. This group includes dedicated analysts and resides within Portfolio Management. The group also utilises investment management personnel in the Portfolio Management group in engagement calls to portfolio companies.

Investment Management

While Dimensional’s primary responsible investment focus is on improving governance practices in investee companies, Dimensional also takes ESG principles into consideration across all portfolios where it may have an impact on performance.

As an example, Dimensional excludes closely held companies from its universe of eligible securities on governance grounds, since companies with large strategic shareholders may not represent the interests of a broad set of shareholders. Dimensional may also choose not to purchase companies where, based on public information, in its judgment, there is a heightened concern of fraudulent or other behaviour or situations that may make market information unreliable.

Where clients have particular social and/or environmental preferences, Dimensional can implement negative screens or overlays to its underlying investment strategies to provide those clients with tailored investment solutions. Many of these preferences are incorporated into Dimensional’s social funds and sustainability funds.

In social funds, Dimensional seeks to incorporate social considerations into investment strategies by identifying and screening companies to reflect the values of its clients. Dimensional may utilize research from independent third-party vendors, depending on the requirements of each portfolio, to systematically exclude restricted securities.

In sustainability funds, Dimensional seeks to incorporate environmental sustainability considerations into investment strategies using a methodology that ranks companies in terms of specified environmental metrics, such as climate change and environmental impact. Dimensional may employ independent third-party vendors to provide the environmental scores for each company. Using patented methodology, Dimensional tilts portfolios away from companies that rank lowly and toward companies with high scores. Dimensional’s unique investment approach provides clients with a broadly diversified, robust investment solution while helping to meeting their environmental preferences.

Influencing Corporate Governance

  • Proxy Voting

Proxy voting is the act of exercising shareholder voting rights on behalf of clients. This is Dimensional’s main tool for influencing the board of directors elected to manage a company on shareholders’ behalf. Dimensional may engage external vendors for voting execution and recommendations for certain shareholder meetings but remains responsible for the voting decision. Dimensional takes into consideration the costs associated with voting and generally will vote in instances where the expected economic benefit of doing so outweighs the costs for a given portfolio. Click here for Corporate Governance information.

  • Engagement

When there is potential to increase shareholder value, Dimensional may interact directly with the management of companies or other shareholders to seek to improve corporate governance.

  • UK Stewardship Code

The UK Stewardship Code aims to enhance the quality of engagement between institutional investors and companies and outlines good practice on engagement with companies. For details on how Dimensional incorporates the seven principles of the UK Stewardship code, click here.

  • Industry Participation

Dimensional may join or participate in events with relevant industry groups where an opportunity exists to add value to our client’s portfolios.

  • Internal Projects and Research

Dimensional may conduct research on the implications of certain governance practices and what it means for a company to have good governance policies and practices.

Disclosures and Reporting

Dimensional discloses information concerning its proxy voting records on its website and in other governance-related materials as appropriate, and updates such information as new information becomes available from time to time. Dimensional also posts detailed proxy voting records on its website where required in accordance with applicable regulations.

Dimensional will annually report on its progress towards implementing the UNPRI as required.

Corporate Responsibility

Dimensional is committed to improving its sustainability practices globally by seeking to understand the impact of its business operations on the environment and develop offices, plans, and processes that minimize those impacts. Dimensional’s corporate headquarters was awarded a three-star rating by Austin Energy Green Building (AEGB).


* "Dimensional" refers to the Dimensional separate but affiliated entities generally, rather than one particular entity.  These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., and Dimensional Japan Ltd.