Sarasin Responsible Global Equity (Sterling Hedged) A Acc (OEIC/Unit Trust)
SRI / Ethical Overview
Environmental, social and governance concerns are fully integrated into our investment process.
ESG issues are part of the assessment conducted by each analyst on every stock considered for inclusion on our buy list. The impact of ESG issues considered as part of modelling the revenue and cost projections of every stock, as well as how we consider threats to the business case. Our Stewardship analysts undertake research into specific ESG issues and manage policy engagement and governance.
Sarasin & Partners has managed ethical mandates for over 20 years, predominantly for charity clients, and has extensive experience throughout the firm of implementing ethical and socially responsible policies. Within our client teams we have considerable experience of how ethical issues have evolved and the different ways in which they may be considered by different interest groups.
SRI / themed / ethical assets under management – overview
- Fund Size (GBP): As at 31 May 2018 £54mn/ For SH £16mn
- Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds: As at 31 May 2018
- Sarasin IE Sustainable Global Real Estate Equity: £17mn
- JSS Sustainable Equity – Real Estate Global SICAV: £16mn
- JSS Sustainable Equity Global Emerging Markets SICAV: £41mn
- Sarasin Responsible Global Equity: £54mn
- Sarasin Responsible Global Equity (Sterling Hedged): £16mn
- Sarasin Responsible Corporate Bond: £161mn
- Total £305mn
- Total value of assets covered by any additional ESG or responsible ownership policy: As at 31 March 2018 £13,618mn
- Total assets under management: As at 31 March 2018 £13,618mn
SRI Policies (Primary strategy in bold)
- Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
- Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.
- Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
- Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.
- Governance policy Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices.
- Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
- Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
- Limits exposure to carbon intensive industries Find environmental, sustainable investment, ethical fund and other options that aim to significantly reduce or limit exposure to carbon intensive industries (ie sectors which are major contributors to climate change). Funds vary - strategies may involve excluding sectors such as coal, oil & gas, mining or airlines - or may indicate a 'best in sector' approach is taken. See fund literature for details.
- Health & wellbeing policies Find ethical or sustainable investment fund options that have a policy which supports (ie aims to invest in) companies that are viewed as offering positive lifestyle, health or wellbeing related benefits.
- Coal, oil &/or gas majors excluded Find sustainable investment and ethical fund options that avoid significant involvement in coal, oil and/or gas producing companies. Funds vary. See individual fund literature to confirm details.
- Alcohol production excluded This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
- Fracking and tar sands excluded Find fund options that avoid companies involved in fracking and tar sands - which are widely regarded as more controversial methods of oil and gas extraction.
- Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
- Human rights Find funds that consider human rights practices when approving companies for investment. Such funds will require decent standards of human rights to be demonstrated - which typically means adherence to international norms as a minimum standard.
- RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
- Negative selection bias Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
- Over 50% large cap Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
- Sustainability themed Find funds where there is a significant emphasis on sustainability issues either as its primary strategy or as a core strategy that compliments other criteria. (This may apply to a number of different SRI Styles). Such funds will consider environmental and social issues when making stock selection decisions. Read fund literature for further information.
- Favours cleaner, greener companies Find funds that aim to nvest in companies with strong environmental policies and practices. This may mean it invests in smaller companies offering market leading environmental services or products and/or larger companies that are working towards the improved management of their negative impacts. Read fund literature for further information.
- Favours companies with strong social policies Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
- Strictly screened ethical fund Find funds that have a high level of negative ethical avoidance. These funds are likely to exclude more companies than other ethical (and SRI) fund options. Read fund literature for further information.
- Available via an ISA Find funds that are available via a tax efficient ISA product wrapper
- Responsible ownership / stewardship policy (new) Find funds that have a policy that sets out what they do with regard to responsible investment ownership - also known as 'stewardship'. This typically relates to issues such as dialogue with companies and shareholder voting.
- ESG integration strategy (new) Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. (These typically relate to improved risk management.)
- Combines ESG strategy with other SRI criteria (new) Find funds that have an ESG strategy (which is typically focuses on avoiding companies that post environmental, social or governance related risks) with additional criteria such as positive and/or negative screens or engagement/stewardship strategies.
- ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
- Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
- Integrates ESG factors into all/most fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
- Vote all* shares at AGMs/EGMs This fund manager votes or aims to vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' - where fund managers consider - and express their views on - the key business issues effecting the companies they part own. (*Allowance is made for exceptional situations such as when shares are in the process of being sold.)
- In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
- Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
- UK Stewardship Code signatory Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave as responsible 'company owners'.
- Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
- Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
- Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
- Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
- PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.
- Boutique/specialist fund manager Find options offered by smaller, more specialist fund management companies with a significant (or entire) emphasis on sustainable, responsible, ethical, ESG or responsible ownership related investment strategies. Note - strategies vary significantly. Check fund manager supplied links for further information.
- Fund EcoMarket sponsor/partner (new) Fund management company is supporting this website which aims to raise the profile of and help explain sustainable, responsible and ethical fund strategies. Sponsor funds are listed ahead of other funds and display their company logos.
- Climate Action 100+ or IIGCC member (new) Involved in collaborative institutional investor initiatives that are encouraging companies to address climate change (ie reduce carbon emissions)
- Encourage board diversity eg gender (new) Fund managers encourage the companies they invest in to have more diverse board structures (eg more women on boards)
- Encourage responsible corporate taxation (new) Fund management company is working with the companies it invests in to encourage more responsible corporate taxation (new)
- Encourage carbon / GHG reduction (new) The fund management company is working with the companies it invests in to encourage reductions of carbon dioxide and other greenhouse gas emissions.
- Employ specialist ESG/SRI/sustainability researchers (new) The fund management company directly employs specialist ESG/SRI/sustainability researchers or analysts
- Use specialist ESG/SRI/sustainability research companies (new) The company makes use of expert external research
- Full SRI policy information available on request (new) Information on all selected filter options will be supplied by the fund manager if you ask them to do so
SRI / Ethical Policy
Our core investment philosophy and process, along with stewardship oversight, applies to all the funds we manage on behalf of clients. The key aim of this process is to identify companies that offer long-term value enhancement opportunities, which are currently undervalued by the market.
We select companies by virtue of their fit with our three step process.
The first step is idea generation, which is driven by identifying investable themes that help us identify the long-term trends shaping the investment landscape. We identify Themes from both a top down or ‘big picture’ perspective and from our bottom up fundamental analysis of industries and companies. We then produce a set of companies in which we could invest to capture each Theme. The combination of these forms our Investment Universe.
The second step is to search for stocks from this -Investment Universe - worthy of rigorous analysis to find attractive investments. Stocks that we believe offer attractive risk/reward are added to a Buy List via an iterative process of challenge.
The third step is portfolio construction: Global equity portfolios are constructed from this Buy List taking account of the corporate characteristics of each stock.
Environmental, social and governance concerns are fully integrated into our investment process. ESG issues are part of the assessment conducted by each analyst on every stock considered for inclusion on our buy list. The impact of ESG issues considered as part of modelling the revenue and cost projections of every stock, as well as how we consider threats to the business case. Our Stewardship analysts undertake research into specific ESG issues and manage policy engagement and governance.
Resources, Affiliations & Corporate Strategies
Sarasin & Partners is a signatory of the UNPRI and the UK Stewardship Code.
Other Initiatives that we actively participate in range from membership organisations, to investor discussion groups that allow for regular information sharing among like-minded investors,to active investor coalitions focused on specific company or policy matters.We are involved in the following membership organisations and investor discussion groups:
• Principles for Responsible Investment (PRI)
• The Pensions and Lifetime Savings Association (formerly the National Association of Pension Funds (NAPF) – active in promoting the concept of stewardship within the UK
• The Local Authority Pension Fund Forum, which we have actively supported for many years
• International Corporate Governance Network (ICGN) – our Head of Stewardship Natasha Landell-Mills is a member of the Accounting and Auditing Practices Committee
• Global Investors Governance Network (GIGN) – an informal network of investors on governance matters
• Asian Corporate Governance Association – providing currentresearch on Asian corporate governance matters, and a platform for engagement with companies and policymakers in the region
• The Centre for the Study of Financial Innovation - hosts regular roundtable discussions with thought leaders on key issues facing the financial sector, from stewardship to financial sector litigation or carbon risks
We are involved in the following investor coalitions and initiatives relating to responsible investment:
• Institutional Investors Group on Climate Change (IIGCC) - brings together investors keen to promote more robust action to counter climate change
• ‘Aiming for A’ investor coalition – co-filing shareholder resolutions asking for companies to improve disclosure on climate risks. This group is being subsumed by IGCC
• Investor coalition on Audit – formed to promote high quality and independent audits. Natasha Landell-Mills coordinated this group, culminating in a position paper (signed by over 30 institutions representing over €2 trillion in assets) and outreach in the European Union to deliver audit market reform
• Investor coalition on International Financial Reporting Standards (IFRS) and Going Concern – this group coordinated by Natasha Landell-Mills was formed in 2012, and is reaching out to policymakers in the UK and EU to ensure an accounting framework that supports and promotes stewardship for the long-term
• Corporate Reporting and Auditing Group convened by the IMA – bringing together representatives from the largest longterm investor associations to discuss topical accounting and auditing issues, and feed into government consultations
• Climate risk reporting - we are leading an initiative to improve climate risk reporting working with ClientEarth and a coalition of investors.