Fund Name SRI Style Product Region Asset Type Launch Date

Janus Henderson Global Sustainable Equity Fund
Sustainability Select OEIC/Unit Trust Global Equity 01/08/91

Objectives

The strategy’s objective is to invest in a concentrated portfolio of companies that will have positive environmental and societal impact and that will generate attractive excess returns for our clients. The team manages the strategy to generate material outperformance against the MSCI World benchmark over the long term.

Fund Size: £1825.95m

Total screened & themed / SRI assets: £3466.12m

Total Responsible Ownership assets: £33576.14m

Total assets under management: £251116.46m

As at: 31/03/23

ISIN: GB0005027221, GB00B71DPP64, GB0005030043, GB00B5VYGQ34, GB00B7KYJH09, GB00BF8DGS54, GB00BGQVHT66, GB00BJ0LFS89, GB00BMX58X45, GB0034219328, GB00B6871X42, GB0034219211

Sustainable, Responsible &/or ESG Overview

The Global Sustainable Equities strategy (‘the strategy’) seeks to invest in businesses that are strategically aligned with the powerful environmental and social trends changing the shape of the global economy. These businesses should exhibit sustainable revenue growth by virtue of having products or services that enable positive environmental or social change, and thereby have an impact on the development of a sustainable global economy. It is a low carbon strategy.

The investment team responsible for the strategy employs a fundamental bottom-up approach to stock selection with a style tilt towards growth and quality. The strategy has an integrated approach to Sustainable investing, combining positive and negative investment criteria as well as integrating ESG factors into the bottom-up, fundamental company analysis.

 

Primary fund last amended: 21/06/23 04:49

Information received directly from Fund Manager

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  • Fund Filters

    Sustainability

    Environmental policy

    Sustainability policy

    Limits exposure to carbon intensive industries

    Resource efficiency policy or theme

    Sustainable transport policy or theme

    Sustainability theme or focus

    Environmental damage and pollution policy

    Favours cleaner, greener companies

    Waste management policy or theme

    UN Global Compact linked exclusion policy

    Sustainability focus

    Report against sustainability objectives

    Encourage more sustainable practices through stewardship

    Transition focus

    Nature & Biodiversity

    Deforestation / palm oil policy

    Plastics policy / reviewing plastics

    Unsustainable / illegal deforestation exclusion policy

    Avoids genetically modified seeds/crop production

    Blue economy theme or focus

    Nature / biodiversity focus

    Sustainable fisheries policy

    Climate Change & Energy

    Nuclear exclusion policy

    Coal, oil & / or gas majors excluded

    Climate change / greenhouse gas emissions policy

    Invests in clean energy / renewables

    Fracking and tar sands excluded

    Clean / renewable energy theme or focus

    Arctic drilling exclusion

    Fossil fuel reserves exclusion

    Energy efficiency theme

    Require net zero action plan from all/most companies

    TCFD reporting requirement

    Encourage transition to low carbon through stewardship activity

    Supply chain decarbonisation policy

    Green / sustainable property strategy

    Fossil fuel exploration exclusion - direct involvement

    Fossil fuel exploration exclusion – indirect involvement

    Targeted Positive Investments

    EU Sustainable Finance Taxonomy holdings 5-25% of fund assets

    EU Sustainable Finance Taxonomy holdings >25% of fund assets

    Invests >25% of fund in environmental/social solutions companies

    Invests >50% of fund in environmental/social solutions companies

    Human Rights

    Human rights policy

    Child labour exclusion

    Responsible supply chain policy or theme

    Oppressive regimes (not free or democratic) exclusion policy

    Indigenous peoples’ policy

    Modern slavery exclusion policy

    LGBTQ+ policy

    Social / Employment

    Social policy

    Health & wellbeing policies or theme

    Diversity, equality & inclusion Policy (fund level)

    Labour standards policy

    Fast fashion exclusion

    Favours companies with strong social policies

    Mining exclusion

    Vulnerable / gig workers protection policy

    Meeting Peoples' Basic Needs

    Water / sanitation policy or theme

    Demographic / ageing population theme

    Healthcare / medical theme

    Ethical Values Led Exclusions

    Ethical policies

    Animal welfare policy

    Animal testing exclusion policy

    Tobacco production avoided

    Armaments manufacturers avoided

    Alcohol production excluded

    Gambling avoidance policy

    Pornography avoidance policy

    Civilian firearms production exclusion

    Governance & Management

    Governance policy

    Anti-bribery and corruption policy

    Avoids companies with poor governance

    Encourage board diversity e.g. gender

    Encourage TCFD alignment for banks & insurance companies

    UN sanctions exclusion

    Encourage higher ESG standards through stewardship activity

    Require investee companies to report climate risk in R&A

    Fund Governance

    ESG integration strategy

    ESG factors included in Assessment of Value (AoV) report

    Employ external (fund) oversight or advisory committee

    External (fund) committee has veto powers

    Asset Size & Metrics

    Invests in small, mid and large cap companies

    How The Fund Works

    Positive selection bias

    Combines norms based exclusions with other SRI criteria

    Combines ESG strategy with other SRI criteria

    Significant harm exclusion

    SRI / ESG / Ethical policies explained on website

    Assets mapped to SDGs

    All assets (except cash) meet published sustain'y criteria

    Impact Methodologies

    Aims to generate positive impacts (or 'outcomes')

    Positive environmental impact theme

    Positive social impact theme

    Invests in environmental solutions companies

    Invests in social solutions companies

    Invests in sustainability / ESG disruptors

    Aim to deliver positive impacts through engagement

    Over 50% in assets providing environmental or social ‘solutions’

    Labels & Accreditations

    RSMR rated (OEIC funds only)

    Intended Clients & Product Options

    Intended for investors interested in ESG / sustainability

    Available via an ISA (OEIC only)

    Fund management company information

    About The Business

    ESG / SRI engagement (AFM company wide)

    Responsible ownership / stewardship policy (AFM company wide)

    Responsible ownership policy for non SRI funds (AFM company wide)

    Responsible ownership / ESG a key differentiator (AFM company wide)

    Diversity, equality & inclusion engagement policy (AFM company wide)

    Vote all* shares at AGMs / EGMs (AFM company wide)

    Integrates ESG factors into all / most fund research

    In-house diversity improvement programme (AFM company wide)

    Invests in newly listed companies (AFM company wide)

    Offer structured intermediary training on sustainable investment

    Offer unstructured intermediary sustainable investment training

    Resources

    In-house responsible ownership / voting expertise

    Employ specialist ESG / SRI / sustainability researchers

    Use specialist ESG / SRI / sustainability research companies

    Collaborations & Affiliations

    PRI signatory

    UKSIF member

    Climate Action 100+ or IIGCC member

    Fund EcoMarket partner

    TNFD forum member (AFM company wide)

    Investment Association (IA) member

    Accreditations

    UK Stewardship Code signatory (AFM company wide)

    Engagement Approach

    Engaging on climate change issues

    Engaging with fossil fuel companies on climate change

    Engaging to reduce plastics pollution / waste

    Engaging to encourage responsible mining practices

    Engaging on biodiversity / nature issues

    Engaging on human rights issues

    Engaging on labour / employment issues

    Engaging on diversity, equality and / or inclusion issues

    Engaging on governance issues

    Engaging on responsible supply chain issues

    Company Wide Exclusions

    Review(ing)carbon / fossil fuel exposure for all funds (AFM company wide)

    Controversial weapons avoidance policy (AFM company wide)

    Climate & Net Zero Transition

    Encourage carbon / greenhouse gas reduction (AFM company wide)

    Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide)

    In-house carbon / GHG reduction policy (AFM company wide)

    Committed to SBTi / Science Based Targets Initiative

    Transparency

    Publish responsible ownership / stewardship report (AFM company wide)

    Full SRI policy information on company website

    Full SRI policy information available on request

  • Sustainable, Responsible &/or ESG Policy:

    The Global Sustainable Equity Team (the ‘team’) aims to outperform the market over the long term through creating a differentiated global equity portfolio of the best sustainability ideas. The team’s investment approach is explicitly low carbon and by incorporating environmental, social, and governance factors into their analysis, they seek to construct a portfolio with a favourable risk profile.

    The team believes there is a strong link between sustainable development, innovation, and long-term compounding growth. Our investment framework seeks to invest in companies that have a positive impact on the environment and society. At the same time, it helps us stay on the right side of disruption by avoiding companies we consider to be involved in activities that are harmful to the environment or society. We believe that this approach will provide clients with a persistent return source, deliver future compound growth, and help mitigate downside risk.

    Key distinctions

    30 years of sustainability thought leadership

    We have a long and successful track record in the consistent application of our sustainability framework – the strategy was launched in 1991 and Hamish Chamberlayne has been managing the strategy since January 2012. We have been thought leaders on sustainability issues since the inception of the strategy and were founding signatories of the UNPRI in 2006.

    Investing with positive impact

    Environmental and social considerations are integral to the investment philosophy and process, from universe definition and idea generation through to fundamental analysis, engagement, and portfolio management. A dedicated sustainability professional within the team enables deep integration of sustainability issues into investment process and enhances our ability to analyse issues from multiple angles.

    Deep investment resource

    The dedicated Global Sustainable Equity (GSE) portfolio management team works in collaboration with Janus Henderson’s global equity research platform and draws upon the deep knowledge and domain expertise of the sector and regional teams.

    Explicitly low carbon

    We consider six levels in our approach to low carbon investing. We believe this approach will be a significant source of alpha as the transition to the low carbon economy continues over the next decade and beyond. Hamish Chamberlayne has had training in climate change and has written a paper on the investment implications. The team have many years of experience in analysing, understanding, and managing both climate risk and transition risk within portfolios (the strategy has had this low carbon approach since inception in 1991).

    Continuous improvement

    We have a philosophy of continuous improvement that applies both to ourselves and the companies we invest in. We are always looking to enhance our understanding of evolving sustainability issues and how to incorporate them into our investment process. Our portfolio management is driven by this philosophy.

    Our alignment with sustainable development

    The guiding principle of our investment philosophy is: ‘Is the world a better place because of this company?’ and we always consider whether a company’s products contribute beneficially to the environment and society. Ten sustainable development investment themes help us identify long-term business opportunities. These have been informed by both the environmental and social megatrends that are pressuring the global economy, and by the UN’s 1987 Brundtland Report that defined sustainable development. Consequently, there is high alignment between our investment process and the UN Sustainable Development Goals (SDGs), and our portfolio contributes to all 17. Identifying companies that contribute towards the goals is inherent to our investment approach and we measure and report on this.

    We believe there are a myriad of investment opportunities arising from the migration towards a more sustainable global economy, and that the best investment returns will be generated by companies that are on the right side of these. Looking for these long-term compounding characteristics and staying focused on long-term value not short-term valuation metrics, can generate exciting investment returns. We also believe there are substantial risks to companies and shareholder returns that come from factors such as asset obsolescence, regulatory risk, weak corporate cultures, or damaged franchises that are on the wrong side of ESG. While these risks can appear small in the short term, they also compound over time and can dramatically hurt company fundamentals.

  • Process

    Investment approach

    There are four pillars to our sustainable investment process which incorporates both positive and negative selection criteria and includes both product and operational impact analysis. It is through this rigorous and repeatable stock-selection process that we believe we add value to our clients.

    • Positive impact: Ten sustainable development themes guide idea generation and identify long-term investment opportunities.
    • ‘Do no harm’: Strict avoidance criteria are adopted. We will not invest in activities that contribute to environmental and social harm. This also helps us avoid investing in industries most likely to be disrupted.
    • ‘Triple bottom-line’ framework: Fundamental research evaluates how companies focus on profits, people, and the planet in equal measure.
    • Active management and engagement: We construct a differentiated portfolio with typically high active share (>90%). Collaborative, continuous, and collective engagement is a key aspect of our process.

    Thematic framework

    The positive selection criteria lead the team to invest in businesses that have a positive impact on society and the environment by virtue of the products or services they sell, and by the way in which they manage their operations, thereby supporting the United Nations Sustainable Development Goals (SDGs) adopted in 2015.

    Idea generation

    Idea generation is derived from four ‘core’ megatrends that are pressuring the global economy: population growth, ageing populations, resource constrains, and climate change.

    The team believes that the defining investment issue of our time will be transitioning to a low-carbon and sustainable economy, while maintaining the levels of productivity necessary to deliver the goods and services that an ageing and growing population requires. Derived from these four megatrends, we identify ten environmental and social sustainable development themes. For a company to be eligible for our portfolio at least 50% of its revenues will be aligned with at least one of these sustainable development themes.

    Investing with positive impact is inherent in our approach and integral to all investment decisions. All investments must demonstrate positive impact and we measure and report on this. We do this by measuring the proportion of portfolio revenues that are aligned with each of our ten positive sustainable development themes, by mapping our portfolio holdings against the United Nations Social Development Goals (SDGs); by reporting our carbon footprint, and by measuring our portfolio against a set of ESG KPIs that are informed by the Global Impact Investing Network’s IRIS metrics.

    Do no harm, avoidance criteria

    The negative impact on global prosperity from the cost of economic externalities is becoming increasingly recognised. The team seeks to avoid businesses involved in activities contrary to the development of a sustainable economy, believing these types of business to be at a higher risk from government regulation or disruption.

    We believe our exclusions make sense ethically, socially, environmentally, and financially. We seek to avoid investing in businesses that have products or operations directly associated with:
    All holdings are compliant with the UN Global Compact, whose Ten Principles cover human rights, the International Labour Organisation’s declaration on workers’ rights, corruption, and environmental pollution. Additional oversight is provided by Janus Henderson’s ESG Oversight Committee, an independent committee comprising senior figures from across Janus Henderson, responsible for ensuring the strategy’s adherence to its exclusion criteria.

    Fundamental and valuation analysis

    The third pillar of the investment approach is constructed around two key questions, ‘Is the world a better place because of this company?’ and ‘Is there a large growth opportunity?’. The team has a rigorous process the fundamental research process which is looking at both ESG factors and also financial factors in an integrated fashion. The team ultimately analyses every company on the basis of the ‘3 Ps’ of their ‘triple bottom line’ framework: how they generate Profits, how they impact People, and how they impact the Planet.

    The team seeks to identify businesses with long-term compounding characteristics, and with optionality upside, which are trading at discounts to their intrinsic value. Typically, the team looks for companies with the ability to generate and compound long-term free cash flows, where the equity market is currently under-valuing those. There is a specific focus to the financial analysis that the team does to identify intrinsic value.

    The team looks for:

    • The potential for multi-year revenue compounding
    • A culture of innovation, that in turn drives that upside optionality
    • Durable business models
    • Greater predictability of revenues
    • Consistency of margins and cash flows
    • Strong balance sheets

    The team also believes there are substantial risks to companies and shareholder returns from factors such as asset obsolescence, regulatory risk, the loss of key talent arising from weak corporate culture, or the loss of customers given the perception that a company operates on the wrong side of ESG. While these risks can appear small in the short term, they also compound over time and can dramatically hurt company fundamentals.

    We believe that the equity market often fails to see both the long-term value being created by some companies and under-appreciates the long-term risks to others. We consider all of these factors as we think about a business’ fair value and stay focused on the potential for long-term value creation rather than on shorter-term valuation metrics.

    Active portfolio construction and risk management

    Every stock selected for the portfolio must fit at least one theme; but for the purposes of portfolio construction, there is no forced distribution of themes. Portfolio construction is driven by stock selection, with each stock assessed within the disciplined analytical framework.

    The portfolio is constructed with the aim of generating attractive excess returns, but with a good level of overall risk diversification. The intention is to construct a high-conviction portfolio with high active share against the benchmark. There are some key principles to this.

    Portfolio construction is driven by stock selection, with each stock being assessed within the disciplined analytical framework. There are 3 levels of position size:

    • Substantial positions, of over 2% portfolio weight, are stocks with a superior combination of predictable revenue growth, financial strength, and valuation upside. These positions typically account for 30-40% of the total portfolio.
    • Standard positions, of 1.5-2.0%, are the initial sizes for investments that meet all our portfolio entry requirements and have good liquidity.
    • Small positions, of less than 1% are less liquid investments which tend to be earlier in their life cycle, but where we see significant upside. These positions typically account for less than 5% of the total portfolio.
      72.

    The portfolio will be regionally balanced to avoid unintended country and currency risk. Emerging market investments will be limited to a maximum of 3% of the portfolio.

    The portfolio will comprise 50 to 70 equity investments. Every investment is selected on its own fundamental stock attributes but must contribute to overall portfolio fit and risk diversification.

    The team believes that a high-conviction portfolio of stocks that align with the investment philosophy, which looks very different to the benchmark, but is managed with this high awareness of geographic, thematic and liquidity risk, can generate attractive risk-aware returns for our clients.

    Sell discipline

    Sales will be executed when the long-term investment thesis is impaired, or when corporate responsibility issues emerge and there is no possible resolution from engagement with the company. Additionally, a position will be sold if new information identifies a breach of the strategy’s avoidance criteria.

    Engagement and reporting

    Company engagement forms an important part of the investment process. We take an active approach to communicating our views to companies and seeking improvements in performance. We participate in various forms of engagement:

    • Collaborative engagement: coming together with a group of other institutional investors to engage with companies on a range of ESG issues
    • Continuous engagement: working with companies on ESG issues that have long-duration and do not result in immediate outcomes
    • Collective engagement: bringing together ideas and resources from a diverse range of stakeholders from outside the organisation to engage with companies on key issues.

    On a quarterly basis we publish our ‘Positive Impact Report’ and our ‘Voting & Engagement Report’. The Positive Impact Report details how the portfolio holdings are having positive environmental or social impact. The Voting & Engagement Report details our corporate engagement and proxy voting activity.

    On an annual basis we publish our ‘Annual Sustainability Report’ and our ‘Investment Principles Report’. The Annual Sustainability Report details our portfolio impact measurement. We review the UN SDGs and our positive impact for each SDG. This report also discloses our portfolio Carbon Footprint, measuring scope 1, 2, and 3 emissions. The Investment Principles Report details our investment philosophy, our definition of sustainability, and an in-depth description of our positive impact themes and avoidance criteria.

     

  • Resources, Affiliations & Corporate Strategies

    Hamish Chamberlayne co-manages the strategy with Aaron Scully, CFA, and is supported by dedicated sustainability analysts Amarachi Seery, CEnv, MIEnvSci, MIEMA*; and portfolio analyst Jigar Pipalia. The team is based between London (Hamish, Amarachi, and Jigar) and Denver (Aaron). Hamish and Aaron have dual analyst and portfolio management responsibilities, and each has an inter-disciplinary skillset comprising both financial and sustainability analysis. Hamish has been managing the strategy since January 2012, after joining the firm in 2011. Aaron Scully joined the team as an assistant portfolio manager in August 2017 and was promoted to co-portfolio manager in May 2019. Amarachi joined in June 2018 as a dedicated sustainability analyst. This is a collegiate team, with a strong set of shared values and thoroughly enjoy working together. They are dedicated to the management of the strategy.

    *CEnv is the Chartered Environmentalist designation. MIEnvSci is full membership of the Institution of Environmental Sciences. MIEMA is full membership of the Institute of Environmental Management & Assessment.

    The team has a close working relationship with the firm’s ESG Investment Team, specifically in relation to the analysis of material ESG issues and company engagement. The ESG Investment Team is an in-house specialised group focused on ESG data analysis and research, governance, ESG company and thematic engagement, proxy voting, and advisory services that serves as a resource for all our investment desks. The team’s mission is to promote ESG integration across the business. They play a leading role internally in working with investment desks to enhance their ESG integration processes and externally leading our active participation in numerous ESG initiatives.

    Additionally, the dedicated GSE portfolio management team works closely with the wider Janus Henderson Central Research Team. These analysts provide idea generation, sector domain expertise and deep analytical due diligence on companies and sectors.

    Our alignment with sustainable development

    The guiding principle of our investment philosophy is: ‘Is the world a better place because of this company?’ and we always consider whether a company’s products contribute beneficially to the environment and society. Ten sustainable development investment themes help us identify long-term business opportunities. These have been informed by both the environmental and social megatrends that are pressuring the global economy, and by the UN’s 1987 Brundtland Report that defined sustainable development. Consequently, there is high alignment between our investment process and the UN Sustainable Development Goals (SDGs), and our portfolio contributes to all 17. Identifying companies that contribute towards the goals is inherent to our investment approach, and we measure and report on this.

    We believe there are a myriad of investment opportunities arising from the migration towards a more sustainable global economy, and that the best investment returns will be generated by companies that are on the right side of these. Looking for these long-term compounding characteristics and staying focused on long-term value not short-term valuation metrics can generate exciting investment returns. We also believe there are substantial risks to companies and shareholder returns that come from factors such as asset obsolescence, regulatory risk, weak corporate cultures, or damaged franchises that are on the wrong side of ESG. While these risks can appear small in the short term, they also compound over time and can dramatically hurt company fundamentals.

     

    Global Sustainable Equity Team

    • Hamish Chamberlayne, CFA - Head of Global Sustainable Equity | Portfolio Manager (16 years with firm, 20 years of experience)
    • Aaron Scully, CFA - Portfolio Manager (22 years with firm, 25 years of experience)
    • Amarachi Seery, CEnv, MIEnvSci, MIEMA - Sustainability Analyst (5 years with firm, 15 years of experience)
    • Jigar Pipalia - Portfolio Analyst (2 years with firm, 4 years of experience)
    • Steve Weeple - Client Portfolio Manager (6 years with firm, 26 years of experience)

    Source: Janus Henderson Investors, as at 31 December 2022.

     

    ESG Investment Team

    • Michelle Dunstan - Chief Responsibility Officer (<1 year with firm, 18 years of experience)
    • Paul LaCoursiere, CFA*– Global Head of ESG Investments (2 years with firm, 21 years of experience)
    • Antony Marsden - Head of Governance and Stewardship (18 years with firm, 24 years of experience)
    • Blake Bennett, PhD - Governance and Stewardship Analyst (2 years with firm, 2 years of experience)
    • Oliva Gull - Governance and Stewardship Analyst (8 years with firm, 8 years of experience)
    • Ruchi Biyani - Governance and Stewardship Analyst (1 year with firm, 14 years of experience)
    • Adrienn Sarandi - Head of ESG Strategy & Development (5 years with firm, 24 years of experience)
    • Bhaksar Sastry, CFA - ESG Content Manager (2 years with firm, 15 years of experience)
    • Henrik Jeppesen - ESG Implementation Manager (1 year with firm, 24 years of experience)
    • Jesse Verheijen - ESG Data Analyst (3 years with firm, 8 years of experience)
    • Dan Raghoonundon - ESG Corporate Research Analyst Lead (5 years with firm**, 16 years of experience)
    • Charles Devereux, CFA - ESG Corporate Research Analyst (1 year with firm, 11 years of experience)
    • Charlotte Nisbet - ESG Corporate Research Analyst (3 years with firm, 8 years of experience)
    • Oliva Gull - Governance and Stewardship Analyst (8 years with firm, 8 years of experience)
    • Phoebe Lei - ESG Corporate Research Analyst (1 year with firm, 1 year of experience)
    • Xiaoyi Luo Tedjani, FRM - ESG Corporate Research Analyst (3 years with firm, 11 years of experience)

    Source: Janus Henderson Investors, as at 9 March 2023.
    * Announced departure effective 31 March 2023
    **Bridged tenure from previous employment

  • Dialshifter

    This fund is helping to ‘shift the dial from brown to green’ by…

    Built 30 years ago, the four pillars of our sustainable investment approach remain as pertinent today as they were three decades ago. It is these pillars which have enabled the strategy to remain at the forefront of sustainable investing for so long; as knowledge of sustainability has progressed, our investment approach has blossomed all the while remaining rooted in the strategy’s core beliefs. We consider this to be integral to the strategy’s success.

     

    Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…

    The Paris Agreement goal of reaching ‘Net Zero’ emissions by 2050 is hugely important and is a positive step forward as a tangible target to address climate change. We believe investors have an important role to play in encouraging companies to contribute towards the transition to a low carbon economy. While we can and do influence the firms in which we invest, we are also cognisant that our clients have different objectives and that the concept of fiduciary varies by region. Therefore, we are working with our clients to define how to implement their net zero mandates across various regions, asset classes, sectors, and styles of investing, as well as in the context of their wider objectives.

    At Janus Henderson, we are proud to have been certified CarbonNeutral® since 2007 across our operations and business travel and we have been an investor signatory of the Carbon Disclosure Project since 2000. We are members of the Global Impact Investing Network, and the UK and European Sustainable Investment Forums. We are a founding signatory of the UN Principles for Responsible Investment in 2006. We are a signatory to the Paris Pledge for Action, announced prior to COP21, which supports an ambitious climate agreement and commits signatories to act to support this. The firm is a member of the Institutional Investor Group on Climate Change (IIGCC), that works to promote action from companies, investors, and governments on climate issues. We are an active participant in Climate Action 100+, a five-year collaborative initiative led by investors to engage with the world’s largest corporate greenhouse gas emitters. We also co-founded the Net Zero Carbon (NZC10) initiative in 2020.

    Janus Henderson is a registered supporter of the Task Force on Climate-related Financial Disclosures (TCFD). We are in the process of reviewing our firmwide approach to climate disclosures and working towards producing climate reporting in line with the TCFD recommendations.

    While we share concerns about climate risk and have the expertise to support any climate commitments investors choose to make as asset owners, we have not made a firm-wide Net Zero commitment at this point. We are looking closely at the Net Zero Asset Managers Initiative (NZAMI). Given the breadth of the commitments and the reporting requirements, signing up NZAMI is complex and should not be taken lightly. Before Janus Henderson commits to any new initiative, we conduct a rigorous analysis to understand the obligations. We are currently working directly with our investment team, CEO and the NZAMI initiative itself to address the aforementioned requirements and to conclude whether we can commit to all aspects of the NZAMI. We believe in the spirit and goals of a net zero economy and will work towards the goals of the industry while also being authentic and thoughtful about our commitments, and our clients’ different objectives.

     

  • Voting Record

    Disclaimer

    This document is intended solely for the use of professionals, defined as Eligible Counterparties or Professional Clients, and is not for general public distribution. Marketing Communication. Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. If you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Any investment application will be made solely on the basis of the information contained in the Prospectus (including all relevant covering documents), which will contain investment restrictions. This document is intended as a summary only and potential investors must read the prospectus, and where relevant, the key investor information document before investing. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

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Fund Name DS SRI Style Product Region Asset Type Launch Date

Janus Henderson Global Sustainable Equity Fund
Sustainability Select OEIC/Unit Trust Global Equity

Fund Size: £1825.95

Total screened & themed / SRI assets: £3466.12

Total Responsible Ownership assets: £33576.14

Total assets under management: £251116.46

As at: 31/03/23

Sustainable, Responsible &/or ESG Policy:

The Global Sustainable Equity Team (the ‘team’) aims to outperform the market over the long term through creating a differentiated global equity portfolio of the best sustainability ideas. The team’s investment approach is explicitly low carbon and by incorporating environmental, social, and governance factors into their analysis, they seek to construct a portfolio with a favourable risk profile.

The team believes there is a strong link between sustainable development, innovation, and long-term compounding growth. Our investment framework seeks to invest in companies that have a positive impact on the environment and society. At the same time, it helps us stay on the right side of disruption by avoiding companies we consider to be involved in activities that are harmful to the environment or society. We believe that this approach will provide clients with a persistent return source, deliver future compound growth, and help mitigate downside risk.

Key distinctions

30 years of sustainability thought leadership

We have a long and successful track record in the consistent application of our sustainability framework – the strategy was launched in 1991 and Hamish Chamberlayne has been managing the strategy since January 2012. We have been thought leaders on sustainability issues since the inception of the strategy and were founding signatories of the UNPRI in 2006.

Investing with positive impact

Environmental and social considerations are integral to the investment philosophy and process, from universe definition and idea generation through to fundamental analysis, engagement, and portfolio management. A dedicated sustainability professional within the team enables deep integration of sustainability issues into investment process and enhances our ability to analyse issues from multiple angles.

Deep investment resource

The dedicated Global Sustainable Equity (GSE) portfolio management team works in collaboration with Janus Henderson’s global equity research platform and draws upon the deep knowledge and domain expertise of the sector and regional teams.

Explicitly low carbon

We consider six levels in our approach to low carbon investing. We believe this approach will be a significant source of alpha as the transition to the low carbon economy continues over the next decade and beyond. Hamish Chamberlayne has had training in climate change and has written a paper on the investment implications. The team have many years of experience in analysing, understanding, and managing both climate risk and transition risk within portfolios (the strategy has had this low carbon approach since inception in 1991).

Continuous improvement

We have a philosophy of continuous improvement that applies both to ourselves and the companies we invest in. We are always looking to enhance our understanding of evolving sustainability issues and how to incorporate them into our investment process. Our portfolio management is driven by this philosophy.

Our alignment with sustainable development

The guiding principle of our investment philosophy is: ‘Is the world a better place because of this company?’ and we always consider whether a company’s products contribute beneficially to the environment and society. Ten sustainable development investment themes help us identify long-term business opportunities. These have been informed by both the environmental and social megatrends that are pressuring the global economy, and by the UN’s 1987 Brundtland Report that defined sustainable development. Consequently, there is high alignment between our investment process and the UN Sustainable Development Goals (SDGs), and our portfolio contributes to all 17. Identifying companies that contribute towards the goals is inherent to our investment approach and we measure and report on this.

We believe there are a myriad of investment opportunities arising from the migration towards a more sustainable global economy, and that the best investment returns will be generated by companies that are on the right side of these. Looking for these long-term compounding characteristics and staying focused on long-term value not short-term valuation metrics, can generate exciting investment returns. We also believe there are substantial risks to companies and shareholder returns that come from factors such as asset obsolescence, regulatory risk, weak corporate cultures, or damaged franchises that are on the wrong side of ESG. While these risks can appear small in the short term, they also compound over time and can dramatically hurt company fundamentals.

Sustainable, Responsible &/or ESG Process:

Investment approach

There are four pillars to our sustainable investment process which incorporates both positive and negative selection criteria and includes both product and operational impact analysis. It is through this rigorous and repeatable stock-selection process that we believe we add value to our clients.

  • Positive impact: Ten sustainable development themes guide idea generation and identify long-term investment opportunities.
  • ‘Do no harm’: Strict avoidance criteria are adopted. We will not invest in activities that contribute to environmental and social harm. This also helps us avoid investing in industries most likely to be disrupted.
  • ‘Triple bottom-line’ framework: Fundamental research evaluates how companies focus on profits, people, and the planet in equal measure.
  • Active management and engagement: We construct a differentiated portfolio with typically high active share (>90%). Collaborative, continuous, and collective engagement is a key aspect of our process.

Thematic framework

The positive selection criteria lead the team to invest in businesses that have a positive impact on society and the environment by virtue of the products or services they sell, and by the way in which they manage their operations, thereby supporting the United Nations Sustainable Development Goals (SDGs) adopted in 2015.

Idea generation

Idea generation is derived from four ‘core’ megatrends that are pressuring the global economy: population growth, ageing populations, resource constrains, and climate change.

The team believes that the defining investment issue of our time will be transitioning to a low-carbon and sustainable economy, while maintaining the levels of productivity necessary to deliver the goods and services that an ageing and growing population requires. Derived from these four megatrends, we identify ten environmental and social sustainable development themes. For a company to be eligible for our portfolio at least 50% of its revenues will be aligned with at least one of these sustainable development themes.

Investing with positive impact is inherent in our approach and integral to all investment decisions. All investments must demonstrate positive impact and we measure and report on this. We do this by measuring the proportion of portfolio revenues that are aligned with each of our ten positive sustainable development themes, by mapping our portfolio holdings against the United Nations Social Development Goals (SDGs); by reporting our carbon footprint, and by measuring our portfolio against a set of ESG KPIs that are informed by the Global Impact Investing Network’s IRIS metrics.

Do no harm, avoidance criteria

The negative impact on global prosperity from the cost of economic externalities is becoming increasingly recognised. The team seeks to avoid businesses involved in activities contrary to the development of a sustainable economy, believing these types of business to be at a higher risk from government regulation or disruption.

We believe our exclusions make sense ethically, socially, environmentally, and financially. We seek to avoid investing in businesses that have products or operations directly associated with:
All holdings are compliant with the UN Global Compact, whose Ten Principles cover human rights, the International Labour Organisation’s declaration on workers’ rights, corruption, and environmental pollution. Additional oversight is provided by Janus Henderson’s ESG Oversight Committee, an independent committee comprising senior figures from across Janus Henderson, responsible for ensuring the strategy’s adherence to its exclusion criteria.

Fundamental and valuation analysis

The third pillar of the investment approach is constructed around two key questions, ‘Is the world a better place because of this company?’ and ‘Is there a large growth opportunity?’. The team has a rigorous process the fundamental research process which is looking at both ESG factors and also financial factors in an integrated fashion. The team ultimately analyses every company on the basis of the ‘3 Ps’ of their ‘triple bottom line’ framework: how they generate Profits, how they impact People, and how they impact the Planet.

The team seeks to identify businesses with long-term compounding characteristics, and with optionality upside, which are trading at discounts to their intrinsic value. Typically, the team looks for companies with the ability to generate and compound long-term free cash flows, where the equity market is currently under-valuing those. There is a specific focus to the financial analysis that the team does to identify intrinsic value.

The team looks for:

  • The potential for multi-year revenue compounding
  • A culture of innovation, that in turn drives that upside optionality
  • Durable business models
  • Greater predictability of revenues
  • Consistency of margins and cash flows
  • Strong balance sheets

The team also believes there are substantial risks to companies and shareholder returns from factors such as asset obsolescence, regulatory risk, the loss of key talent arising from weak corporate culture, or the loss of customers given the perception that a company operates on the wrong side of ESG. While these risks can appear small in the short term, they also compound over time and can dramatically hurt company fundamentals.

We believe that the equity market often fails to see both the long-term value being created by some companies and under-appreciates the long-term risks to others. We consider all of these factors as we think about a business’ fair value and stay focused on the potential for long-term value creation rather than on shorter-term valuation metrics.

Active portfolio construction and risk management

Every stock selected for the portfolio must fit at least one theme; but for the purposes of portfolio construction, there is no forced distribution of themes. Portfolio construction is driven by stock selection, with each stock assessed within the disciplined analytical framework.

The portfolio is constructed with the aim of generating attractive excess returns, but with a good level of overall risk diversification. The intention is to construct a high-conviction portfolio with high active share against the benchmark. There are some key principles to this.

Portfolio construction is driven by stock selection, with each stock being assessed within the disciplined analytical framework. There are 3 levels of position size:

  • Substantial positions, of over 2% portfolio weight, are stocks with a superior combination of predictable revenue growth, financial strength, and valuation upside. These positions typically account for 30-40% of the total portfolio.
  • Standard positions, of 1.5-2.0%, are the initial sizes for investments that meet all our portfolio entry requirements and have good liquidity.
  • Small positions, of less than 1% are less liquid investments which tend to be earlier in their life cycle, but where we see significant upside. These positions typically account for less than 5% of the total portfolio.
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The portfolio will be regionally balanced to avoid unintended country and currency risk. Emerging market investments will be limited to a maximum of 3% of the portfolio.

The portfolio will comprise 50 to 70 equity investments. Every investment is selected on its own fundamental stock attributes but must contribute to overall portfolio fit and risk diversification.

The team believes that a high-conviction portfolio of stocks that align with the investment philosophy, which looks very different to the benchmark, but is managed with this high awareness of geographic, thematic and liquidity risk, can generate attractive risk-aware returns for our clients.

Sell discipline

Sales will be executed when the long-term investment thesis is impaired, or when corporate responsibility issues emerge and there is no possible resolution from engagement with the company. Additionally, a position will be sold if new information identifies a breach of the strategy’s avoidance criteria.

Engagement and reporting

Company engagement forms an important part of the investment process. We take an active approach to communicating our views to companies and seeking improvements in performance. We participate in various forms of engagement:

  • Collaborative engagement: coming together with a group of other institutional investors to engage with companies on a range of ESG issues
  • Continuous engagement: working with companies on ESG issues that have long-duration and do not result in immediate outcomes
  • Collective engagement: bringing together ideas and resources from a diverse range of stakeholders from outside the organisation to engage with companies on key issues.

On a quarterly basis we publish our ‘Positive Impact Report’ and our ‘Voting & Engagement Report’. The Positive Impact Report details how the portfolio holdings are having positive environmental or social impact. The Voting & Engagement Report details our corporate engagement and proxy voting activity.

On an annual basis we publish our ‘Annual Sustainability Report’ and our ‘Investment Principles Report’. The Annual Sustainability Report details our portfolio impact measurement. We review the UN SDGs and our positive impact for each SDG. This report also discloses our portfolio Carbon Footprint, measuring scope 1, 2, and 3 emissions. The Investment Principles Report details our investment philosophy, our definition of sustainability, and an in-depth description of our positive impact themes and avoidance criteria.

 

Resources, Affiliations & Corporate Strategies

Hamish Chamberlayne co-manages the strategy with Aaron Scully, CFA, and is supported by dedicated sustainability analysts Amarachi Seery, CEnv, MIEnvSci, MIEMA*; and portfolio analyst Jigar Pipalia. The team is based between London (Hamish, Amarachi, and Jigar) and Denver (Aaron). Hamish and Aaron have dual analyst and portfolio management responsibilities, and each has an inter-disciplinary skillset comprising both financial and sustainability analysis. Hamish has been managing the strategy since January 2012, after joining the firm in 2011. Aaron Scully joined the team as an assistant portfolio manager in August 2017 and was promoted to co-portfolio manager in May 2019. Amarachi joined in June 2018 as a dedicated sustainability analyst. This is a collegiate team, with a strong set of shared values and thoroughly enjoy working together. They are dedicated to the management of the strategy.

*CEnv is the Chartered Environmentalist designation. MIEnvSci is full membership of the Institution of Environmental Sciences. MIEMA is full membership of the Institute of Environmental Management & Assessment.

The team has a close working relationship with the firm’s ESG Investment Team, specifically in relation to the analysis of material ESG issues and company engagement. The ESG Investment Team is an in-house specialised group focused on ESG data analysis and research, governance, ESG company and thematic engagement, proxy voting, and advisory services that serves as a resource for all our investment desks. The team’s mission is to promote ESG integration across the business. They play a leading role internally in working with investment desks to enhance their ESG integration processes and externally leading our active participation in numerous ESG initiatives.

Additionally, the dedicated GSE portfolio management team works closely with the wider Janus Henderson Central Research Team. These analysts provide idea generation, sector domain expertise and deep analytical due diligence on companies and sectors.

Our alignment with sustainable development

The guiding principle of our investment philosophy is: ‘Is the world a better place because of this company?’ and we always consider whether a company’s products contribute beneficially to the environment and society. Ten sustainable development investment themes help us identify long-term business opportunities. These have been informed by both the environmental and social megatrends that are pressuring the global economy, and by the UN’s 1987 Brundtland Report that defined sustainable development. Consequently, there is high alignment between our investment process and the UN Sustainable Development Goals (SDGs), and our portfolio contributes to all 17. Identifying companies that contribute towards the goals is inherent to our investment approach, and we measure and report on this.

We believe there are a myriad of investment opportunities arising from the migration towards a more sustainable global economy, and that the best investment returns will be generated by companies that are on the right side of these. Looking for these long-term compounding characteristics and staying focused on long-term value not short-term valuation metrics can generate exciting investment returns. We also believe there are substantial risks to companies and shareholder returns that come from factors such as asset obsolescence, regulatory risk, weak corporate cultures, or damaged franchises that are on the wrong side of ESG. While these risks can appear small in the short term, they also compound over time and can dramatically hurt company fundamentals.

 

Global Sustainable Equity Team

  • Hamish Chamberlayne, CFA - Head of Global Sustainable Equity | Portfolio Manager (16 years with firm, 20 years of experience)
  • Aaron Scully, CFA - Portfolio Manager (22 years with firm, 25 years of experience)
  • Amarachi Seery, CEnv, MIEnvSci, MIEMA - Sustainability Analyst (5 years with firm, 15 years of experience)
  • Jigar Pipalia - Portfolio Analyst (2 years with firm, 4 years of experience)
  • Steve Weeple - Client Portfolio Manager (6 years with firm, 26 years of experience)

Source: Janus Henderson Investors, as at 31 December 2022.

 

ESG Investment Team

  • Michelle Dunstan - Chief Responsibility Officer (<1 year with firm, 18 years of experience)
  • Paul LaCoursiere, CFA*– Global Head of ESG Investments (2 years with firm, 21 years of experience)
  • Antony Marsden - Head of Governance and Stewardship (18 years with firm, 24 years of experience)
  • Blake Bennett, PhD - Governance and Stewardship Analyst (2 years with firm, 2 years of experience)
  • Oliva Gull - Governance and Stewardship Analyst (8 years with firm, 8 years of experience)
  • Ruchi Biyani - Governance and Stewardship Analyst (1 year with firm, 14 years of experience)
  • Adrienn Sarandi - Head of ESG Strategy & Development (5 years with firm, 24 years of experience)
  • Bhaksar Sastry, CFA - ESG Content Manager (2 years with firm, 15 years of experience)
  • Henrik Jeppesen - ESG Implementation Manager (1 year with firm, 24 years of experience)
  • Jesse Verheijen - ESG Data Analyst (3 years with firm, 8 years of experience)
  • Dan Raghoonundon - ESG Corporate Research Analyst Lead (5 years with firm**, 16 years of experience)
  • Charles Devereux, CFA - ESG Corporate Research Analyst (1 year with firm, 11 years of experience)
  • Charlotte Nisbet - ESG Corporate Research Analyst (3 years with firm, 8 years of experience)
  • Oliva Gull - Governance and Stewardship Analyst (8 years with firm, 8 years of experience)
  • Phoebe Lei - ESG Corporate Research Analyst (1 year with firm, 1 year of experience)
  • Xiaoyi Luo Tedjani, FRM - ESG Corporate Research Analyst (3 years with firm, 11 years of experience)

Source: Janus Henderson Investors, as at 9 March 2023.
* Announced departure effective 31 March 2023
**Bridged tenure from previous employment

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