ESG in Focus
Considering environmental, social and governance issues is central to our Investment Philosophy.
Environmental issues are increasingly economic realities.
Climate change is the environmental issue which applies most consistently across our Fund. We see climate transition as an economic theme – resulting in meaningful opportunities, as well as risks.
Our research, engagement and voting are informed by climate indicators such as corporate climate targets and alignment with the Paris Agreement, among other issues. We have joined the Net Zero Asset Managers Initiative, and encourage our companies to adopt science-based climate targets.
We have exclusions on investment in companies deriving more than 10% of revenue from: coal fired power and coal mining or oil sands. These activities are among the most damaging to the environment, and entail financial risk.
Governance underpins financial value.
While there is no one single form of “good” governance, consideration of governance and management is crucial to our approach. Without quality management teams, we can have little confidence in a business’ prospects.
Our focus on governance is reflected in having five questions within our Investment Philosophy checklist currently relating to management quality, remuneration, purpose, and culture.
We want companies with management teams we can trust. We believe remuneration should be aligned with shareholder interest, and that firms should understand the importance of considering wider stakeholders to long-term returns.