FEM logo

Fund EcoMarket

the sustainable, responsible and ethical investment information hub

Sarasin IE Sustainable Global Real Estate Equity (USD) P Acc (OEIC/Unit Trust)

Logo for Sarasin IE Sustainable Global Real Estate Equity (USD) P Acc
SRI Style: Sustainability Themed
Fund Type: OEIC/Unit Trust
Region: Asia Pacific
Asset Type: Property
Launch Date: 01/06/2006

SRI / Ethical Overview

The Fund seeks to achieve long-term growth though investment in the shares of global real estate companies and the global real estate investment trust markets with an overlay of sustainable criteria.

Sustainable research is undertaken on all real estate equities. This leads to many companies being excluded from the investible universe. The main criteria for the assessment of sustainability are the risks and opportunities linked with an investment. For example, this may relate to social issues, products and production methods on one hand and the opportunities arising out of environmentally friendly and/or socially favourable products and technologies on the other hand.



The application of exclusion criteria and the best-of-class approach help avoid certain activities and industries with an unfavourable return-/risk-profile. The best-in-class-approach helps is to identify companies which are not only lower risk but which also offer some opportunities as these are better prepared / placed for a future (more sustainable) industry. We regard proxy-voting as a necessary part of an SRI mandate in order to assume the full responsibility of equity ownership.



The sustainability analyst is responsible for interpreting the information on the basis of a comprehensive list of criteria. The results are converted into scores and entered into a proprietary database (Sustainable Value Builder). It is then assessed using a numerical scoring system. The analyst conducts a plausibility check and refines it where required. Finally there is a peer review. The scoring is then put into the Sarasin Sustainability Matrix®. The SRI criteria include the following:

  • Energy-efficiency (e.g. policy & goals, energy consumption/m2)
  • Responsible land use, in the face of increasing urbanisation and lack of urban green spaces
  • Sustainability of building materials, due to potential for environmental and health damages. Resource-efficient construction & maintenance (energy, water, waste)
  • Labour standards. The construction sector is a big employer of low-skilled labour and it needs to implement controls to guarantee minimum labour standards
  • Quality of living. Real estate planners need to focus on the quality of living for the residents. Architectural concepts related to housing for the elderly / disabled etc.
  • Building flexibility in case requirements change in the future
  • Good connection to public transport infrastructure

 

SRI / themed / ethical assets under management – overview

  •  Fund Size (GBP):   As at 31 May 2018    £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.
  • 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.
  • 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.
  • Measures positive impacts Find funds that measure the positive effect of their investment decision making on society and/or the environment. (This may involve eg carbon saved or jobs supported.) Managers aim to quantify the benefits they deliver (relative to other strategies or other benchmarks) to ensure they are delivering positive benefiting. This is a new and evolving area. See fund literature for information
  • 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.
  • Nuclear exclusion policy Find ethical funds (and other options) that have a published policy that sets out the fund's position on avoiding or limiting exposure to nuclear power. See fund literature for details of their policy.
  • Climate change / GHG policy Find sustainable investment and ethical fund options that pay significant attention to climate change related issues such as greenhouse gas/carbon emissions. Strategies vary, see fund literature for individual fund information.
  • Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.
  • 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.
  • Child labour exclusion (new) Find funds that have policies in place that ensure they do not invest in companies that employ children.

SRI Features

  • 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.
  • Balances company 'pros and cons'/best in sector Find ethical funds and other options that consider both the 'positive' things companies do and the 'negative' things they do in order to make balanced, often complex decisions about where they might invest. Such funds often invest in the best/most ethical companies across most industries ('best in sector'), rather than excluding entire sectors. The fund manager may combine this with 'responsible engagement' activity to encourage better business practices. See fund literature for specific policy explanations.
  • Eurosif transparency Find funds that meet the standards of the EUROSIF transparency Code. This means that they are a leading fund in terms of openness and transparency, publishing - for example - extensive information about where they invest and how they deal with companies.
  • 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.
  • 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.
  • Combines norms based exclusions with other SRI criteria (new) Find funds that make significant use of internationally agreed 'norms' (eg United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process ALONGSIDE additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
  • 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.
  • Employ external oversight or advisory committee (new) Find funds that have a external committee that helps steer or advise fund managers on SRI policy or strategy related issues. These people may be paid for their time but are not employees of the fund manager.

Corporate Activity

  • 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

The Fund seeks to achieve long-term growth though investment in the shares of global real estate companies and the global real estate investment trust markets with an overlay of sustainable criteria.

Sustainable research is undertaken on all real estate equities. This leads to many companies being excluded from the investible universe. The main criteria for the assessment of sustainability are the risks and opportunities linked with an investment. For example, this may relate to social issues, products and production methods on one hand and the opportunities arising out of environmentally friendly and/or socially favourable products and technologies on the other hand.

The application of exclusion criteria and the best-of-class approach help avoid certain activities and industries with an unfavourable return-/risk-profile. The best-in-class-approach helps is to identify companies which are not only lower risk but which also offer some opportunities as these are better Sarasin & Partners LLP (S&P) Sustainable REIT RFP for retail purposes | March 2016 7
prepared / placed for a future (more sustainable) industry. We regard proxy-voting as a necessary part of an SRI mandate in order to assume the full responsibility of equity ownership.

The sustainability analyst is responsible for interpreting the information on the basis of a comprehensive list of criteria. The results are converted into scores and entered into a proprietary database (Sustainable Value Builder). It is then assessed using a numerical scoring system. The analyst conducts a plausibility check and refines it where required. Finally there is a peer review. The scoring is then put into the Sarasin Sustainability Matrix®. The SRI criteria include the following:

  • Energy-efficiency (e.g. policy & goals, energy consumption/m2)
  • Responsible land use, in the face of increasing urbanisation and lack of urban green spaces
  • Sustainability of building materials, due to potential for environmental and health damages. Resource-efficient construction & maintenance (energy, water, waste)
  • Labour standards. The construction sector is a big employer of low-skilled labour and it needs to implement controls to guarantee minimum labour standards
  • Quality of living. Real estate planners need to focus on the quality of living for the residents. Architectural concepts related to housing for the elderly / disabled etc.
  • Building flexibility in case requirements change in the future
  • Good connection to public transport infrastructure

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.

Search all funds on Fund EcoMarket