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Fund EcoMarket

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SRI Attributes (primary entries only)

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Print Fund Name SRI Style Product Region Asset Type Launch Date More info
Stewart Investors Worldwide Sustainability A Inc GBP Acc Sustainability Themed OEIC/Unit Trust Global Equity 01/11/2012 More Info (click to view)

SRI / Ethical Overview

The Stewart Investors sustainability portfolios aim to generate long-term, risk-adjusted returns for clients by investing in companies which are positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate. Investment decisions around sustainability are based on three key points: Identifying companies who manage sustainability risks and opportunities and those with a positive sustainability impact; Inclusion of environmental, social and corporate governance matters in investment research; Engaging directly with companies on identified sustainability issues. At the heart of the Stewart Investors philosophy is the principle of stewardship. We are active owners and stewards of the companies in which we invest.

 

Our emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing and while we do no formal negative screening, we are unlikely to invest in companies operating in high risk sectors, because of their poor long-term sustainable development positioning.

 

SRI / themed / ethical assets under management – overview

 

  • Fund Size (GBP):   £370 million as at 31 March 2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £13 billion managed by the Stewart Investors Sustainable Funds Group
  • Total value of assets covered by responsible ownership policy:   n/a
  • Total assets under management:   £23.8 billion as at 31 March 2017

 

SRI Policies (Primary strategy in bold)

  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).

SRI Features

  • RSMR Rated Fund rating agency 'Rayner Spencer Mills Research' have awarded this fund 'rated' status.
  • Sustainability themed This fund pays significant attention to sustainability issues either as its primary strategy or alongside other ethical criteria and approaches. This means that environmental and social challenges and opportunities are likely to influence stock selection decisions.
  • Aims to generate positive impacts This fund aims to help deliver positive social or environmental impacts or outcomes. Strategies and approaches vary. Some funds measure outcomes others do not. See fund literature for further information.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

he principle of stewardship is central to Stewart Investors’ investment philosophy and has been since 1988. All the Stewart Investors’ investment strategies strive to integrate sustainability considerations into every investment decision. It is not treated as an optional bolt-on. The Sustainable Funds Group within the wider investment team takes this one step further by focusing on long-term sustainable development as a key driver of the investment process. Sustainability is an integral component of the investment process, and is viewed as a driver of returns in common with consideration of other investment factors.

 

We believe our job is to entrust our clients’ capital to good quality companies with strong management teams and sound long-term growth prospects.

 

Each investment is a decision to purchase not a piece of paper or an electronic Bloomberg ticker, but part of a real business with all the rights and responsibilities that go with this ‘share’ of the ownership of the company. We take these rights and responsibilities seriously. We also believe the way we behave as investment professionals and the role we play in the broader industry are important for our own sustainability.

We seek to invest only in good quality companies. We focus on the quality of management, franchise and financials. By analysing the sustainable development performance and positioning of companies we can better measure less tangible elements of quality and identify less obvious risks. We invest in those companies we believe are particularly well positioned to deliver positive long-term returns in the face of the huge sustainable development challenges facing all countries today. Our emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing.

 

We are long-term investors. We strive to make investment decisions with a minimum five-year time horizon. We have an absolute return mind-set, defining risk as losing client money, rather than deviation from any benchmark index. We focus as much on the potential downside of our investment decisions as on the anticipated upside. The identification of long-term sustainable development risks thus becomes an extremely important way of managing risk. In addition, our willingness to differ substantially from index weightings, both country and company, means we are not obliged to be invested in any company or country if we have particular sustainability concerns.

 

 

Resources, Affiliations & Corporate Strategies

The emphasis is very much on the Stewart Investors team of analysts to identify and analyse companies, and sustainability and investment issues. The primary source of sustainability related information is one-on-one meetings with senior management. We undertake approximately 1300 such meetings each year across Stewart Investors. We are particularly interested in companies which embrace the underlying spirit of sustainability, rather than simply taking a compliance driven, box-ticking approach. Assessing the attitude and priorities of senior management is crucial.

 

We augment internal research with the use of external research. We are now able to drive and tender research to a range of researchers, from investment banks to non-government organisations (NGOs) and independent consultants that we believe will contribute to and enhance our investment decision making over time. Some themes that we have tendered include:

 

  • Diversity in corporate Asia;
  • Sales practices of Asian pharmaceuticals;
  • GEM leaders in packaging solutions;
  • US remuneration practices;
  • ESG leaders in mining; and
  • ·Fossil fuel dependent capital equipment companies.

 

Our current and previous tenders can be viewed on our website. http://www.stewartinvestors.com/en/research-tenders/

EdenTree Amity Sterling Bond A Ethically Balanced OEIC/Unit Trust UK Fixed Interest 04/03/2008 More Info (click to view)

SRI / Ethical Overview

The Fund aims to provide an attractive level of income. The Fund seeks to invest in a highly diversified portfolio of Government and good quality fixed interest securities issued by companies which make a positive contribution to society and the environment through sustainable and socially responsible practices. These Funds seek to avoid investment in certain areas such as companies which have a material involvement in alcohol, tobacco and weapon production, gambling and publication of violent or explicit materials.

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP):   £101.41m as at 31/05/2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £550m as at 31 December 2016
  • Total value of assets covered by responsible ownership policy:   100%
  • Total assets under management:   £2.5bn as at 31/05/2017

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Measures positive impacts The fund aims to have a positive effect on society and/or the environment. Fund managers of this kind actively aim to measure the impact of their investments in order to ensure they are having the desired effect.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.
  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.
  • Fracking and tar sands excluded Fund avoids companies involved in fracking and tar sands - which are controversial oil and gas extraction practices
  • Gambling avoidance policy This fund avoids companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy This fund avoids companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • RSMR Rated Fund rating agency 'Rayner Spencer Mills Research' have awarded this fund 'rated' status.
  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Eurosif transparency This fund has met 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.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.
  • Faith friendly These funds are likely to have attributes that some faith based investors may welcome such as opposition to armaments, gambling and alcohol.
  • Strictly screened ethical fund The managers of this fund aim for it to be managed as having a high level of negative ethics led avoidance. They may refer to it as 'dark green' - meaning it excludes lots of companies, relative to other ethical options.
  • Aims to generate positive impacts This fund aims to help deliver positive social or environmental impacts or outcomes. Strategies and approaches vary. Some funds measure outcomes others do not. See fund literature for further information.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper
  • Over 50% small/mid cap More than half of this funds assets are invested in smaller or medium sized companies.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Responsible Ownership policy for non SRI funds This fund manager applies 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 is not limited to ethical or SRI options.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • 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
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager 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 This company has reviewed or is currently reviewing (or in other ways 'actively managing') their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the light of climate change related concerns and the company's view of its anticipated impact on the companies they invest in.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.
  • Boutique/specialist fund manager This fund management company specialises in sustainable, responsible, ethical, ESG or responsible ownership related investment. This is central to their corporate strategy and influences all investment decision making. Note - different strategies may apply to different fund options. Check fund manager supplied links for further information.

SRI / Ethical Policy

Ethical Approach

 

EIM is a pioneer of Socially Responsible Investment (SRI) and launched its first SRI investment fund in 1988. We utilise both negative and positive screening within the investment process. In respect of negative screening, we avoid companies whose activities derive in excess of 10% of their pre-tax profit or turnover from alcohol production, gambling, pornographic and violent material, tobacco production, strategic armaments, animal testing and intensive farming.

 

We look for the positive aspects in potential investments to ensure we invest in companies that are making a positive contribution to society and the environment. These may cover good business and corporate governance practices and community relations. We also look for companies promoting good standards of education, environmental management and healthcare. We look favourably upon companies which promote human rights, good labour relations and urban regeneration. As well as our own in-house research (including special thematic reports) we use a range of sources, including independent data from Risk Metrics in respect of Environmental, Social and Governance (ESG) issues.

 

EdenTree employs both negative and positive screening to its stock selection process and engages with companies before, during and after investing. This process is integrated into our overall investment management process and we use the following ‘screens’ when considering the suitability of an investment.

 

Positive Screening

 

Our positive screening approach centres on what we define as the ‘Nine Pillars’ of responsible investing.  We are particularly focused on areas that provide the necessities of life such as healthcare, water, education and housing, or products and services that are sourced ethically and produced sustainably. We also favour ‘solutions-focused’ companies that are leading the way in technologies that may help solve some of the world’s most challenging problems, such as climate change, alternative energy or water conservation. In addition, we focus on business behaviour, expecting the companies we invest in to have a well-managed policy for promoting human rights, environmental protection, labour rights and business ethics.

 

Negative Screening

 

Our negative screens include alcohol production, gambling operations, pornographic or violent material or weapon production. We also consider animal testing, oppressive regimes and intensive farming in our criteria when evaluating a company.

 

Amity Panel Review

 

The Amity Panel meet with the fund management and research team 3 or 4 times each year to review the Amity Fund portfolios, the recent investment decisions and to discuss the latest Socially Responsible research and trends. The purpose of the Amity Socially Responsible Investment Advisory Panel is to:-

 

• Help to ensure that the EdenTree Amity Range of Funds meet the stated aims and objectives.

• Provide advice in the formulation of policy in the light of changing social and environmental issues.

 

The Amity Panel will provide advice to the SRI team in a number of ways

 

• Advising on emerging issues or topics relevant to SRI criteria.

• Provide advice and guidance on individual companies or sectors.

• Provide advice and guidance on engagement work.

 

The independent panel is made up of a number of industry experts, including:

 

• The Right Reverend Dr Nigel Peyton – The Bishop of Brechin

• William Oulton – Global Head of Responsible Investments, First State Investments

• George Prescott – ex Ecclesiastical Deputy CEO and CFO, former ABI board member

• Helen Crosby – Sustainability Expert.

• Julie McDowell – Independent Consultant

 

The SRI team is responsible for ESG research and advising Fund Managers. The team has access to a number of external resources for decision making. We have appointed Sustainalytics as our ESG data provider which serves as a starting point for our ESG research. This is complemented by NGO sources, company reports, market news and SRI initiatives. The SRI team also directly meets with companies to discuss sustainability and governance issues.

Resources, Affiliations & Corporate Strategies

There is an in-house team responsible for the execution of our SRI policy; they focus on research, engagement and proxy voting.

 

 All UK proxy voting decisions (includes Guernsey, Jersey and Isle of Man) are taken and executed in-house, signed off by a Fund Manager. We take IVIS (Institutional Voting Information Service) provided by the Investment Association to inform thinking. We have appointed Glass Lewis & Co. to be our sole discretionary research and proxy execution provider in all jurisdictions other than the United Kingdom (including Guernsey, Jersey and the Isle of Man), delegating to it the responsibility for the instruction and execution of international proxy voting at all general and special international company meetings.

 

The team shares responsibility for company engagement, whether it is in house or in partnership with SRI organisations or other investors.

OMW EdenTree Amity UK Pn Ethically Balanced Pension UK Equity 16/10/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "EdenTree Amity UK" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

L&G Jupiter Ecology Pn G25 Environmentally Themed Pension Global Equity 17/04/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Jupiter Ecology" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Family Charities Ethical Exempt S1 Sustainability Themed Life UK Equity 30/06/1996
SLFC (Citibank) Green Pn Cap Ethically Balanced Pension Global Equity 31/10/1997
EdenTree Amity European A Ethically Balanced OEIC/Unit Trust Europe Ex-UK Equity 12/09/1999 More Info (click to view)

SRI / Ethical Overview

The Amity European Fund aims to achieve long term capital growth with a reasonable level of income primarily through a diversified portfolio of European companies. The Amity European Fund seeks to invest in a portfolio of companies which make a positive contribution to society and the environment through sustainable and socially responsible practices. These Funds seek to avoid investment in certain areas such as companies which have a material involvement in alcohol, tobacco and weapon production, gambling and publication of violent or explicit materials.

 

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP):   £87.37m as at 31/05/2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £550m as at 31 December 2016
  • Total value of assets covered by responsible ownership policy:   100%
  • Total assets under management:    £2.5bn as at 31/05/2017

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Measures positive impacts The fund aims to have a positive effect on society and/or the environment. Fund managers of this kind actively aim to measure the impact of their investments in order to ensure they are having the desired effect.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.
  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.
  • Fracking and tar sands excluded Fund avoids companies involved in fracking and tar sands - which are controversial oil and gas extraction practices
  • Gambling avoidance policy This fund avoids companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy This fund avoids companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • RSMR Rated Fund rating agency 'Rayner Spencer Mills Research' have awarded this fund 'rated' status.
  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Eurosif transparency This fund has met 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.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.
  • Faith friendly These funds are likely to have attributes that some faith based investors may welcome such as opposition to armaments, gambling and alcohol.
  • Strictly screened ethical fund The managers of this fund aim for it to be managed as having a high level of negative ethics led avoidance. They may refer to it as 'dark green' - meaning it excludes lots of companies, relative to other ethical options.
  • Aims to generate positive impacts This fund aims to help deliver positive social or environmental impacts or outcomes. Strategies and approaches vary. Some funds measure outcomes others do not. See fund literature for further information.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper
  • Over 50% small/mid cap More than half of this funds assets are invested in smaller or medium sized companies.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Responsible Ownership policy for non SRI funds This fund manager applies 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 is not limited to ethical or SRI options.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • 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
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager 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 This company has reviewed or is currently reviewing (or in other ways 'actively managing') their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the light of climate change related concerns and the company's view of its anticipated impact on the companies they invest in.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.
  • Boutique/specialist fund manager This fund management company specialises in sustainable, responsible, ethical, ESG or responsible ownership related investment. This is central to their corporate strategy and influences all investment decision making. Note - different strategies may apply to different fund options. Check fund manager supplied links for further information.

SRI / Ethical Policy

Ethical Approach

 

EIM is a pioneer of Socially Responsible Investment (SRI) and launched its first SRI investment fund in 1988. We utilise both negative and positive screening within the investment process. In respect of negative screening, we avoid companies whose activities derive in excess of 10% of their pre-tax profit or turnover from alcohol production, gambling, pornographic and violent material, tobacco production, strategic armaments, animal testing and intensive farming.

 

We look for the positive aspects in potential investments to ensure we invest in companies that are making a positive contribution to society and the environment. These may cover good business and corporate governance practices and community relations. We also look for companies promoting good standards of education, environmental management and healthcare. We look favourably upon companies which promote human rights, good labour relations and urban regeneration. As well as our own in-house research (including special thematic reports) we use a range of sources, including independent data from Risk Metrics in respect of Environmental, Social and Governance (ESG) issues.

 

EdenTree employs both negative and positive screening to its stock selection process and engages with companies before, during and after investing. This process is integrated into our overall investment management process and we use the following ‘screens’ when considering the suitability of an investment.

 

Positive Screening

 

Our positive screening approach centres on what we define as the ‘Nine Pillars’ of responsible investing.  We are particularly focused on areas that provide the necessities of life such as healthcare, water, education and housing, or products and services that are sourced ethically and produced sustainably. We also favour ‘solutions-focused’ companies that are leading the way in technologies that may help solve some of the world’s most challenging problems, such as climate change, alternative energy or water conservation. In addition, we focus on business behaviour, expecting the companies we invest in to have a well-managed policy for promoting human rights, environmental protection, labour rights and business ethics.

 

Negative Screening

 

Our negative screens include alcohol production, gambling operations, pornographic or violent material or weapon production. We also consider animal testing, oppressive regimes and intensive farming in our criteria when evaluating a company.

 

Amity Panel Review

 

The Amity Panel meet with the fund management and research team 3 or 4 times each year to review the Amity Fund portfolios, the recent investment decisions and to discuss the latest Socially Responsible research and trends. The purpose of the Amity Socially Responsible Investment Advisory Panel is to:-

 

• Help to ensure that the EdenTree Amity Range of Funds meet the stated aims and objectives.

• Provide advice in the formulation of policy in the light of changing social and environmental issues.

 

The Amity Panel will provide advice to the SRI team in a number of ways

 

• Advising on emerging issues or topics relevant to SRI criteria.

• Provide advice and guidance on individual companies or sectors.

• Provide advice and guidance on engagement work.

 

The independent panel is made up of a number of industry experts, including:

 

• The Right Reverend Dr Nigel Peyton – The Bishop of Brechin

• William Oulton – Global Head of Responsible Investments, First State Investments

• George Prescott – ex Ecclesiastical Deputy CEO and CFO, former ABI board member

• Helen Crosby – Sustainability Expert.

• Julie McDowell – Independent Consultant

 

The SRI team is responsible for ESG research and advising Fund Managers. The team has access to a number of external resources for decision making. We have appointed Sustainalytics as our ESG data provider which serves as a starting point for our ESG research. This is complemented by NGO sources, company reports, market news and SRI initiatives. The SRI team also directly meets with companies to discuss sustainability and governance issues.

 

Resources, Affiliations & Corporate Strategies

There is an in-house team responsible for the execution of our SRI policy; they focus on research, engagement and proxy voting.

 

 All UK proxy voting decisions (includes Guernsey, Jersey and Isle of Man) are taken and executed in-house, signed off by a Fund Manager. We take IVIS (Institutional Voting Information Service) provided by the Investment Association to inform thinking. We have appointed Glass Lewis & Co. to be our sole discretionary research and proxy execution provider in all jurisdictions other than the United Kingdom (including Guernsey, Jersey and the Isle of Man), delegating to it the responsibility for the instruction and execution of international proxy voting at all general and special international company meetings.

 

The team shares responsibility for company engagement, whether it is in house or in partnership with SRI organisations or other investors.

Aviva Stewardship Ethically Balanced Life UK Equity 31/05/1984 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Legal & General (PMC) Ethical UK Equity Index Pn Sustainability Themed Pension UK Equity 31/05/2011
Scot Wid Ethical Negative Ethical Life UK Equity 24/10/2004
SJP Ethical Pn Acc Ethically Balanced Pension Global Equity 01/11/1998
Zurich UK Opportunities 2 EP Unclassified Pension UK Equity 01/01/1996 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Invests in what fund managers consider to be 'well governed' companies

Resources, Affiliations & Corporate Strategies

Aviva Jupiter Ecology S4 Environmentally Themed Life Global Equity 01/01/1970
FNW Kames Ethical Cautious Managed Negative Ethical Life UK Mixed Asset 05/06/2007
Canlife F&C Responsible UK Income LS4 Acc Ethically Balanced Life UK Equity Income 01/12/2005
Pru Royal London Sustainable Leaders Pn Ser A Sustainability Themed Pension UK Equity 25/01/2010 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "CIS Sustainable Leaders Trust" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Ethical Distribution AP Acc Negative Ethical Pension UK Mixed Asset 30/04/1998 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "AXA Ethical Distribution" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

 

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Liontrust Sustainable Future Corporate Bond S1 Sustainability Themed Life Europe >50% UK Fixed Interest 24/06/2001
Canlife F&C Responsible Sterling Bond LS4 Ethically Balanced Life UK Fixed Interest 01/12/2005
Standard Life UK Ethical S1 Negative Ethical Life UK Equity 30/04/2000 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Jupiter Ecology AP Environmentally Themed Pension Global Equity 23/07/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Jupiter Ecology" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

OMW IPL L&G Ethical UK Equity Index Pn Ethically Balanced Pension UK Equity 12/04/2017 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Zurich Sterling Kames Ethical Cautious Managed Negative Ethical Life UK Mixed Asset 28/11/2016
Aviva Threadneedle UK Social Bond PN Social Themed Pension UK Fixed Interest 01/10/2014
Royal London Investment Grade Short Dated Credit Z Negative Ethical OEIC/Unit Trust UK Fixed Interest 07/12/2015 More Info (click to view)

SRI / Ethical Overview

The Fund invests predominantly in investment grade sterling bonds, of which these will be primarily short dated, which meet predefined ethical criteria. The policy of the Fund considers all of the following ethical issues: armaments and tobacco.

 

SRI / themed / ethical assets under management – overview

 

  • Fund Size (GBP):   £348.60m as of 31 May 2017.
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £11,793.22m as of 31 May 2017.
  • Total value of assets covered by responsible ownership policy:   £1,416.04m as of 31 May 2017        (Please note that this figure only includes our sustainable range, however, RLAM’s Responsible Investment Policy will detail how this is an over-arching approach across most of the firm’s assets).
  • Total assets under management:    £104,507.32m as of 31 May 2017.

 

SRI Policies (Primary strategy in bold)

  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

  • RSMR Rated Fund rating agency 'Rayner Spencer Mills Research' have awarded this fund 'rated' status.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • UK Stewardship Code signatory
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

Our ethical investment process begins with screening for eligible investments, which is conducted by specialist independent consultancy EIRiS (Ethical Investment Research Services). With over 25 years’ experience, EIRiS is a leading provider of research into the environmental, social and governance (ESG) and ethical performance of companies. RLAM’s ethical framework combines the avoidance of companies involved in excluded activities with the identification of best of breed companies in permitted sectors.

 

Companies that generate over 10% of their turnover from either one or a combination of the following categories are excluded:

 

Armaments:        manufacturing armaments or nuclear weapons, or associated strategic products

Tobacco:             growing, processing or selling tobacco products

 

If a company breaches this threshold, then it is likely that that company’s involvement in that excluded sector is a noteworthy part of their business and strategy.

 

Also, this threshold is deemed to be realistic and appropriate in terms of assessing a company, given that it may not be possible to always pinpoint the exact turnover derived from an excluded activity. This threshold ensures that a minimum of 90% of each holding meets the ethical criteria.

 

There is no static list of firms and organisations eligible for investment by the Fund.  The ethical criteria screening process is ongoing and implemented pre-trade as part of the rigorous RLAM in-house credit analysis process coupled with independent ethical screening of issuing companies (and other companies that we request adhoc) carried out by the EIRiS. As per all of RLAM’s unit funds, weekly the Fund managers will sign off on the portfolio construction certifying that it adheres to the investment and borrowing powers as set out in the prospectus, and the Royal London Unit Trust Managers (RLUTM) Executive Committee will review the ethical criteria themselves on a quarterly basis.

Resources, Affiliations & Corporate Strategies

As previously outlined, our ethical investment process screening is conducted by specialist independent consultancy EIRiS (Ethical Investment Research Services). With over 25 years’ experience, EIRiS is a leading provider of research into the environmental, social and governance (ESG) and ethical performance of companies.

 

When researching a bond we typically use the following sources of corporate information:

 

  • Audited and unaudited financial accounts
  • Ratings reports/analysis
  • Company meetings/presentations
  • Third party equity/credit research
  • Specific investor reports
  • Barclays Live – key tool for relative value assessment
  • ·Regulatory News Service – ‘Investigate’
  • The Credit team employs a range of models, both external and bespoke.

 

The Credit team also uses a number of external providers of information for ongoing surveillance. Principally these are:

 

  • Bloomberg, which is used for bond analytics and descriptive data, including bond documentation and access to equity research reports.
  • S&P, through their ‘Ratings Direct’ and ‘Capital IQ’ services. Ratings Direct provides up to date access to bond rating reports and research and other company and sector financial data across the rated bond universe and Capital IQ provides access to reported financial information of thousands of listed and unlisted companies. Usefully, we are able to embed the financial data provided by Capital IQ into bespoke financial models that provide inputs that are relevant to RLAM’s evaluation of credit. This represents very time effective and high quality provision of credit ratios to enhance the decision making process in higher profile areas of the corporate bond market.
  • Barclay’s Live database to help assess relative value across issuers and sectors and the production of issuer credit curves.

 

This external data is used to supplement RLAM’s research effort and, in particular, enables our Analysts to focus their primary analysis and financial modelling on lower profile corporate bonds that we consider to be less extensively researched by the wider market. Maintenance of research does not follow a prescriptive formula but will typically tend to follow the reporting timetable of our bond issuers (e.g. RMBS/covered bonds – monthly; CMBS – quarterly; corporates – semi-annual) supplemented by the team’s ongoing focus on market developments and the formal alerts outlined above. Whilst we believe a flexible and interactive approach is optimal and practical given our team size, RLAM has a large database of relevant and targeted credit information that can be accessed by all members of the team effectively.

 

RLAM is well served by the sell-side community, particularly in the secured space, as our counterparties know the level of embedded knowledge across the team, both in terms of stocks and underlying client requirements, and the likelihood of receiving a prompt evaluation of any proposal.

 

It is worth re-emphasising that, whether primary inputs have been internally derived or otherwise, we will never delegate the final decision as to whether a bond is selected in our portfolios, given our very different philosophical approach to valuation. In addition, as previously discussed, our team structure and overlap between the research and Fund manager functions ensures that the stock selection process outlined above is not undertaken by any individuals operating in isolation from the rest of the team. By contrast, this process benefits from continuous and ongoing interaction between the whole team, allowing all members of the team, with different and complementary skills and experience, to contribute to investment decisions.

 

 

RLAM Voting Policy:   

 

 

Aviva Royal London Select Portfolio (50%-100% Shares) Sustainability Themed Life Global Mixed Asset 05/04/2006
ReAssure HL Global Socially Responsible Pn 1 Unclassified Pension Global Equity 22/08/2004
Phoenix Wealth Kames Ethical Cautious Managed Pn S4 Negative Ethical Pension UK Mixed Asset 19/10/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Cautious Managed" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

OMW EdenTree Amity International Pn Ethically Balanced Pension Global Equity 16/10/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "EdenTree Amity International" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

OMW Aberdeen Ethical World Equity Pn Ethically Balanced Pension Global Equity 27/06/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Aberdeen Ethical World" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.  

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

BMO (F&C) Responsible UK Income 1 Acc Ethically Balanced OEIC/Unit Trust UK Equity Income 12/10/1987 More Info (click to view)

SRI / Ethical Overview

The Fund’s focus is on achieving an above average income through investments in approved UK companies. Within its responsible ethical principles the fund is managed as any other: the Lead Fund Manager, Catherine Stanley, uses bottom up company analysis within a clear portfolio construction framework to create a fund capable of generating compelling investment performance. The ethical principles mean we are largely precluded from investing in some sectors, but have a large number of companies to choose from nevertheless. 
 
The fund may also include exposure to ethically screened corporate bonds to assist in meeting its income target.

 

SRI / themed / ethical assets under management – overview 

 

  •  Fund Size (GBP):    £320.5m as at 30 June 2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £1,693m as at 30 June 2017
  • Total value of assets covered by responsible ownership policy:   As at 31 March 2017 our flagship reo® service, a global engagement and proxy voting service that can be applied across equities and corporate credit, covered a total of £108,913m of assets for internal holdings and external clients.
  • Total assets under management:    £187,319m as at 31 March 2017

 

 

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.
  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.
  • Fracking and tar sands excluded Fund avoids companies involved in fracking and tar sands - which are controversial oil and gas extraction practices
  • Gambling avoidance policy This fund avoids companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy This fund avoids companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Balances company 'pros and cons'/best in sector This fund manager will look at both the 'positive' things companies do and the 'negative' things they do. They will make balanced judgements, in line with their published strategy, before deciding whether or not to invest. Such funds often invest in the best/most ethical companies across most industries, rather than excluding entire sectors. The fund manager may couple this with 'responsible engagement' activity, where they aim to encourage better, more responsible business practices.
  • Eurosif transparency This fund has met 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.
  • Sustainability themed This fund pays significant attention to sustainability issues either as its primary strategy or alongside other ethical criteria and approaches. This means that environmental and social challenges and opportunities are likely to influence stock selection decisions.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.
  • Strictly screened ethical fund The managers of this fund aim for it to be managed as having a high level of negative ethics led avoidance. They may refer to it as 'dark green' - meaning it excludes lots of companies, relative to other ethical options.
  • Aims to generate positive impacts This fund aims to help deliver positive social or environmental impacts or outcomes. Strategies and approaches vary. Some funds measure outcomes others do not. See fund literature for further information.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper
  • Over 50% small/mid cap More than half of this funds assets are invested in smaller or medium sized companies.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Responsible Ownership policy for non SRI funds This fund manager applies 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 is not limited to ethical or SRI options.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • 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
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

At BMO Global Asset Management, we have been a leader in the development of sustainable investment strategies for almost three decades. Responsible investment is central to our corporate identity and integral to our global investment philosophy.
 
Ethical considerations are becoming increasingly important in the mind set of many investors. In addition, there is also a growing consensus that the best long term performance will come from those companies that take their wider ethical, environmental and social responsibilities seriously. The fund provides an investment medium for people who do not regard financial gain as the sole criterion for investment, but look to wider issues. It seeks to invest in UK companies offering attractive growth and income characteristics, avoiding investment in those that have harmful effects.
 
We conduct in-house research on each company considered for the Fund and have product-based (ethical) criteria as well as conduct-based (sustainability management assessment) criteria. Below is a summary of the criteria: 
 


 Product-based Criteria:

 

  • Alcohol
  • Gambling
  • Nuclear power generation
  • Oil, gas and coal reserves
  • Pornography
  • Tobacco
  • Weapons

 

Conduct-based criteria:

 

  • Environment 
    • Arctic and ecologically-sensitive operations 
    • Environmental management 

 

  • Social 
    • Animal Welfare 
    • Health and safety 
    • Human rights and oppressive regimes
    • Labour standards

 

  • Governance 
    • Business ethics

 

The GSI team has a quarterly monitoring system to identify:
 

  • Changes to business e.g. through mergers and acquisitions
  • Whether the criteria continues to be met by the company (ethical, environmental and social)
  • Any controversies that may affect the company rating (e.g. mis-selling, environmental damage or corruption).

 
 

 

 

 

Resources, Affiliations & Corporate Strategies

The F&C Responsible UK Income Fund is managed by three distinct teams with the process led by the Investment Management team. The interaction between our teams is detailed in the following chart:
 

  • 1. The Responsible UK Equities Team manages the strategy using fundamental, bottom-up research to construct a portfolio of companies from the acceptable universe. Following approval for inclusion in the ethical universe the investment team is responsible for deeper investment analysis, portfolio construction and ongoing monitoring. 

 

  • 2. The Governance and Sustainable Investment Team (GSI Team) undertakes extensive research on ethical, environmental, social and governance issues for each company proposed for inclusion or actively held within the fund as outlined above. They reach a conclusion about whether a company should be included in the investable universe in conjunction with input from the Responsible Investment Advisory Council. Once a stock has been included the team is responsible for managing ongoing engagement and proxy voting.

 

  • 3. The independent external Responsible Investment Advisory Council is an external body of sustainability experts who focus on providing advice on ethical and sustainability criteria, helping the firm maintain the integrity of the standards by which the funds are run.

 
BMO Global Asset Management draws on a range of specialist ESG research sources to inform proxy voting and engagement activities. We are using Institutional Shareholder Services (ISS) for global proxy voting research and vote execution services. In addition, we are using Institutional Voting Information Service (IVIS) for supplementary advice on FTSE All-Share companies. Other relevant resources include sell-side brokers (corporate governance and sustainability research) and MSCI (ESG factors). We also consider research by broader stakeholders including NGOs such as Transparency International (anti-corruption), Oxfam and Human Rights Watch.
 
Our research is also informed by our networks that may provide briefings and publications, including the UN PRI, International Corporate Governance Network (ICGN) and the Asian Corporate Governance Association (ACGA). We may also draw on external consultants with expertise in particular areas, although presently we have no such arrangements underway. We are also part of a global asset management firm with investment professionals and other expert resources spread across the world, and we of course have access to their insight and expertise on an as needed basis.
 
 

SIP Kames Ethical Equity Pn S6 Negative Ethical Pension UK Equity 12/01/2009 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Equity" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

OMW F&C Responsible UK Equity Income Pn Ethically Balanced Pension UK Equity Income 26/09/2005 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "BMO (F&C) Responsible UK Income" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva F&C Responsible UK Equity Growth AL Ethically Balanced Life UK Equity 13/05/2007
OMW Prof Ethical Pn Unclassified Pension Global Equity 30/04/1997
Aviva Liontrust Sustainable Future UK Growth S1 Sustainability Themed Life UK Equity 24/06/2001
SWIS Ethical Ethically Balanced Life Global Equity 31/10/2000
Zurich Henderson Global Care Growth ZP Sustainability Themed Pension Global Equity 17/11/2003 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Henderson Global Care Growth" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Liontrust Sustainable Future Managed Pn S2 Sustainability Themed Pension Global Mixed Asset 05/04/2001 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Liontrust Sustainable Future Managed" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Royal London Sustainable Diversified Sustainability Themed Life Global Mixed Asset 26/07/2009
Aviva AXA Ethical Distribution EP Negative Ethical Pension UK Mixed Asset 02/01/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "AXA Ethical Distribution" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Scot Eq Aegon Aberdeen Ethical World Equity Pn Ethically Balanced Pension Global Equity 22/04/2014 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Aberdeen Ethical World" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Blackrock LGIM Ethical Global Equity Index P Sustainability Themed Life Global Equity 29/03/2010
WHEB Listed Equity Responsible Ownership Corporate Activity Not Set Unclassified 29/01/2016 More Info (click to view)

SRI / Ethical Overview

For us sustainable investment embodies an attitude to investment that shapes every aspect of our operations. First and foremost this is about our investment process itself. At a high level, our thematic framework is designed to identify companies that provide solutions to sustainability challenges, and in so doing contribute to, and benefit from, growth in sustainable forms of development.  Our integrated approach to ESG analysis also enables us to identify better quality stocks.  

A second critical factor of our approach is that we have a long-term attitude to investment with a current realized average holding period of over five years. We believe this is key to our investment process and allows us to see company engagement and Stewardship as an important input into our investment process.  Specifically we see engagement with companies as a means by which we can gain insight into a company and its management. The way in which a company’s management responds to specific challenges raised through the engagement process can reveal a great deal about that company’s attitude to its stakeholders, risk and other issues. 

In addition, engagement is also an ‘output’ from our investment process in that it allows investors to feel more connected to the companies they hold via our fund, and to know that we are working on their behalf to make companies more responsible in the way they do business.  

For more information see:

  • Our Stewardship Statement:

http://www.whebgroup.com/media/2014/09/201409-Stewardship-code-disclosure-statement.pdf

  • Our Quarterly Engagement and Voting reports:

http://www.whebgroup.com/investment-strategies/listed-equity/fund-governance/engagement-and-voting-records/ 

  • Our Group Responsible Investment Policy:

http://www.whebgroup.com/media/2013/11/WHEB-Group-Responsible-Investment-Policy.pdf 

  • Independent Investment Advisory Committee Minutes:

http://www.whebgroup.com/investment-strategies/listed-equity/fund-governance/investment-advisory-committee-minutes/ 

  • Eurosif Transparency Code Submission:

http://www.whebgroup.com/media/2013/10/2015-WHEB-AM-Transparency-Code-Submission-Final-1.pdf

  • UNPRI Transparency Report:

http://www.whebgroup.com/media/2015/12/2014_Public_Transparency_Report_WHEB-Group.pdf  


Our responsible ownership strategies apply to equity assets in all geographic regions.

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.

SRI Features

-

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Responsible Ownership policy for non SRI funds This fund manager applies 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 is not limited to ethical or SRI options.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • 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
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager 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 This company has reviewed or is currently reviewing (or in other ways 'actively managing') their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the light of climate change related concerns and the company's view of its anticipated impact on the companies they invest in.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.

SRI / Ethical Policy

Information on these topics can be found on the FP WHEB Sustainability Fund entry in the OEIC/Unit Trust product category.

Resources, Affiliations & Corporate Strategies

We use ISS for research on governance and voting.

Each analyst carries out stewardship and governance activities on the stocks for which they are responsible, under the guidance of Seb Beloe, Head of Research.

Decision making is carried out collectively by the team, led by Fund Manager, Ted Franks.

We are involved with and support a range of industry initiatives and thought leadership groups, including UNPRI, IIGCC, UKSIF, EUROSIF, FRC Stewardship Code, CDP, Tomorrows Capital Markets, Sustainable Stock Exchanges and International Integrated Reporting Framework.  See http://www.whebgroup.com/about-us/thought-leadership/ for more

 

LV=Schroder QEP Global Core Pn S2 Environmentally Themed Pension Global Equity 07/04/2009
Trading Emissions PLC Environmentally Themed Investment Trust Global Equity 24/04/2001
Vanguard SRI European Stock Fund (UCITS) [note limited exclusions] Negative Ethical SICAV/Offshore* Europe Equity 23/10/2011 More Info (click to view)

SRI / Ethical Overview

A 'limited avoidance' fund. 

The Vanguard SRI European Stock Fund employs a passive management or indexing investment strategy designed to achieve the performance of the index, by investing in all, or a representative sample of, index securities that satisfy the application of a screening process for socially responsible investing. The fund will not hold stocks of companies in the index that do not meet specific socially responsible criteria. The Investment Manager will hold each, or a representative sample, of those index securities meeting socially responsible criteria in approximate proportion to its weighting in the index, optimising the fund to match the risk factors and performance of the index.

SRI Policies (Primary strategy in bold)

  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).

SRI Features

  • Norms focus This fund uses international standards, conventions and 'norms' to help direct where the fund can and cannot invest (e.g. the UN Global Compact).
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Limited/few ethical exclusions This fund avoids companies based on limited list of ethical exclusions (relative to other ethical funds)

Corporate Activity

-

SRI / Ethical Policy

Objective

The fund seeks to provide long-term growth of capital by seeking to achieve the performance of the index that measures the performance of large- and mid-sized common stocks of companies in developed countries.

Vanguard SRI Funds Investment Strategies

SRI Investment Philosophy

In tracking their target indices, Vanguard’s SRI funds will not hold stocks of companies in the indices that do not meet specific “socially responsible” criteria. The investment manager will hold each, or a representative sample, of those index securities meeting socially responsible criteria in approximate proportion to their weightings in the index, optimising the funds to match the risk factors and performance of the index.

Although the funds will refrain from holding stocks of companies contained in the indices but excluded by the SRI screening process, they will seek to perform consistently with the unscreened indices. To accomplish this objective, the funds use an optimiser to select securities. Each fund selects a representative sample of the securities meeting the SRI screening process that approximates the full index in terms of key risk factors and other characteristics. These factors include price/earnings ratio, industry weights, country weights, market capitalisation, dividend yield and other financial characteristics.

Each fund attempts to minimise deviations in currency, country and sector exposures relative to its index. However, it is possible that, if a large index constituent is excluded, there may be a lack of substitutes within the same country and sector, which would result in a potential mismatch of the fund’s weightings relative to the Index. Because the funds will not hold stocks of companies that do not meet socially responsible criteria, they may not track the performance of their target indices as closely as Vanguard’s other index funds.

Negative screen

Vanguard SRI funds use negative screening (exclusion) - in tracking their target indices Vanguard’s SRI funds will not hold stocks of companies in the indices that do not meet specific “socially responsible” criteria as outlined below.

There are five major areas that FTSE uses to exclude securities:

  • Human Rights – Failure to adhere to the Universal Declaration of Human Rights
  • Labour Standards – Violations of the International Labor Organisation’s Declaration on Fundamental Principles and Rights at Work
  • Environment – Violations of the Rio Declaration on Environment and Development
  • Anti-corruption Principles – Failure to adhere to the United Nationals Convention Against Corruption
  • Military Weapons – Production of landmines, cluster bombs, chemical and biological weapons, nuclear weapons

Negative screening produces a more diversified investment universe, making these funds suitable as a core holding in any portfolio. Best-in-class positive index inclusions tend to be less diversified, and thus suitable only as satellite investments.

The screening process is expected to remove 5-10% of the market capitalisation of each fund’s target index. The portfolio manager will use a sampling approach to security selection on the remaining 90-95% of the market capitalisation. Using sophisticated computer programs, the portfolio manager will select securities for the funds that approximate the fundamental and statistical risk factors of the unscreened index, such as country weights, market capitalisation profile, P/B ratio, and volatility.

SRI Engagement

Vanguard will follow its published proxy voting policy with respect to securities held in the SRI funds, and does not intend to take a more “socially responsible” or “activist” role in proxy voting with the SRI funds than it does with its other funds.

We believe that it is important for company officials to communicate regularly with shareholders regarding areas of interest or concern. In addition, shareholders should be provided with channels through which they may communicate with the board. While boards get shareholder "feedback" through the proxy voting process, a "yes/no" vote provides only limited insight into shareholder views.

We have found, through hundreds of meetings and discussions annually, that we can often accomplish more through dialogue than through the ballot. Please note that both proxy voting and engagement activities are focused on Governance, rather than Environmental or Social themes.

Third-party SRI screening agencies employed by FTSE conduct a rigorous analysis of all companies in each benchmark, assign SRI ratings to the companies and make regular re-assessments. Companies that fail to pass the screening are excluded from the universe of securities that are otherwise included in the index. The screening process is expected to remove 5% to 15% of the market capitalisation of each fund’s target benchmark.

Risk characteristics (In Line with the benchmark)

Although the funds will refrain from holding stocks of companies contained in the indices but excluded by the SRI screening process, they will seek to perform consistently with the unscreened indices, aiming to provide you as an investor with the same beta. To accomplish this objective we use an optimisation technique to invest in the securities that pass the SRI screens. Using sophisticated computer programs, we allocate the fund’s investments to securities in weightings that cause the portfolio to resemble the fundamental and statistical risk characteristics of the target index. These factors include price/earnings ratio, industry weights, country weights, market capitalisation, dividend yield and other financial characteristics of stocks.

Each fund will attempt to minimise deviations in currency, country and sector exposures as compared with that of its index. However, it is possible that, if a large index constituent is excluded, there may be a lack of substitutes within the same country and sector, which would result in a potential mismatch of the fund’s weighted holdings relative to the Index.

Stewardship Policy

Vanguard Asset Management, Limited and Vanguard Investments UK, Limited are committed to sound principles of corporate governance and efficient exercise of their governance responsibilities in the context of their activities as an investment manager. VAM acts as a discretionary investment manager for separately managed accounts(accounts) and for certain UK domiciled collective investment schemes and VIUK acts as authorised corporate director/manager (as appropriate) for such schemes (together the Funds).

The Vanguard Group, Inc. is the ultimate parent company of VIUK and VAM (together the UK Companies). The UK Companies place reliance on VGI to administer the proxy voting and stewardship requirements of the Funds and any relevant accounts as proxy voting agent (where clients have extended the ability to vote to Vanguard).

The UK Companies’ approach to stewardship reflects the above arrangements.

The UK Stewardship Code sets out seven principles (collectively, the Principles), which investment managers, such as the UK Companies, are required to comply with or explain why they do not do so. The Principles state that institutional investors should:

  • Publicly disclose their policy on how they will discharge their stewardship responsibilities
  • Have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed
  • Monitor their investee companies
  • Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value
  • Be willing to act collectively with other investors where appropriate
  • Have a clear policy on voting and disclosure of voting activity
  • Report periodically on their stewardship and voting activities

The UK Companies’ Stewardship Policy is part of its broader corporate governance policy. The following overview summarises this policy and voting guidelines, and explains how the UK Companies’ Stewardship Policy addresses each Principle:

Principle 1: Publicly disclose their policy on how they will discharge their stewardship responsibilities.

The UK Companies’ and VGI’s duty to shareholders of the Funds is to maximise the long-term value of the investments held by our Funds. Vanguard advocates effective corporate governance by the companies in which Vanguard funds invest because Vanguard believes that it is an important way to enhance shareholder value.

The board of the Funds and of each of the UK Companies (the Board) has adopted proxy voting procedures and guidelines to govern proxy voting by each such Fund. The Board has delegated oversight of proxy voting to the Proxy Oversight Committee (the Committee), comprising senior officers of VGI. This Committee will report directly to the Board. The UK Companies are subject to these guidelines to the extent the guidelines call for VGI to administer the voting process and implement the resulting voting decisions, and for that purpose, have been approved by the Board of Directors of VGI.

The overarching objective in voting is simple: to support proposals and director nominees that maximise the value of a fund’s/an account’s investments – and those of fund shareholders – over the long term. While the goal is simple, the proposals that the Funds receive are varied and frequently complex. As such, the guidelines adopted by the Board provide a rigorous framework for assessing each proposal. Under the guidelines, each proposal must be evaluated on its merits, based on the particular facts and circumstances as presented.

For ease of reference, the procedures and guidelines often refer to all Funds. However, our policies and practices seek to ensure that proxy voting decisions are suitable for individual Funds. For most proxy proposals, particularly those involving corporate governance, the evaluation will result in the same position being taken across all of the Funds. In some cases, however, funds may vote differently, depending upon the nature and objective of each fund, the composition of its portfolio, and other factors. Accounts will be handled in a similar manner (subject to the specific terms as agreed).

The guidelines incorporate factors the Committee should consider in each voting decision because
many factors bear on each decision. A Fund/account may refrain from voting if that would be in the
Fund’s and its shareholders’/such account’s best interests.

These circumstances may arise, for example, when the expected cost of voting exceeds the expected benefits of voting, or when exercising the vote results in the imposition of trading or other
restrictions. 

In evaluating proxy proposals, VGI considers information from many sources, including but not limited to, the investment adviser, management or shareholders of a company presenting a proposal, and independent proxy research services. We will give substantial weight to the recommendations of the company’s board, absent guidelines or other specific facts that would
support a vote against management. In all cases, however, the ultimate decision rests with the
members of the Committee, who are accountable to each Fund’s Board or the Board of the UK
Companies (as appropriate) for accounts.

While serving as a framework, the voting guidelines cannot contemplate all possible proposals with which a Fund/account may be presented. In the absence of a specific guideline for a particular proposal (e.g., in the case of a transactional issue or contested proxy), the Committee will evaluate the issue and cast the Fund’s vote in a manner that, in the Committee’s view, will maximise the value of the investment, subject to the individual circumstances of the Fund/account.

Principle 2: Have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.

The UK Companies and VGI maintain a rigorous policy so that conflicts of interest in the proxy voting and corporate governance programme are addressed. The Board has delegated the day-to-day operations of the Funds’ proxy voting process to the VGI Proxy Voting Group, which the Committee oversees. While most votes will be determined, subject to the individual circumstances of each Fund, by reference to the guidelines as separately adopted by each of the Funds, there may be circumstances when the Proxy Voting Group will refer proxy issues to the Committee for
consideration.

Among the Proxy Voting Group’s functions is to determine and address potential or actual conflicts of interest that may be presented by a particular proxy and elevate such potential or actual conflicts to the Proxy Oversight Committee.

The Proxy Oversight Committee, whose members are senior officers of VGI, does not include anyone whose primary duties include external client relationship management or sales. This clear separation between the proxy voting and client relationship functions is intended to eliminate any potential conflict of interest in the proxy voting process.

In the unlikely event that a member of the Committee believes he or she might have a conflict of interest regarding a proxy vote, that member must recuse himself or herself from the committee meeting at which the matter is addressed and not participate in the voting decision.

Principle 3: Monitor their investee companies.

VGI engages with the boards and management of investee companies with the objective of maximising long-term shareholder value and the UK Companies will monitor this as part of their ongoing oversight of VGI’s investment activity.

As discussed by VGI in “Our views on corporate governance,” VGI believes that it is important for company officials to communicate regularly with shareholders regarding areas of interest or
concern. In addition, shareholders should be provided with channels through which they may
communicate with the board. While boards get shareholder “feedback” through the proxy voting
process, a “yes/no” vote provides only limited insight into shareholder views. We have found,
through hundreds of meetings and discussions annually, that we can often accomplish more through dialogue than through the ballot.

Principle 4: Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.

It has not been VGI’s practice to make a public statement in advance of the AGM or an EGM, submitting resolutions at shareholders’ meetings, or requisition an EGM as it is, generally speaking, beyond each Fund’s/ account’s investment mandate as a passive, index funds/accounts to engage in such activities. That said, VGI actively engages with boards and management on corporate governance matters appearing on AGM and EGM ballots.

Matters discussed include executive compensation, governance structures and practices, and
pending transactions and contests for board seats.

Principle 5: Be willing to act collectively with other investors where appropriate.

The UK Companies and VGI act by reference to the investment strategy of the Funds/accounts and their own investment management policies. The decisions taken within that strategy and those
policies may be the same as those taken by other institutional investors in one or more respects, but VGI has not collaborated with other institutional investors and VIUK/VAM would not require it to do so. The UK Companies and VGI are willing to listen to other investors’ positions on particular matters and regularly analyse and vote on shareholder proposals. Occasionally, shareholder proposals against management’s recommendations may be supported when the UK Companies and VGI believe such votes are in the Funds’/accounts’ best interests. Although this approach is driven principally by the investment strategy and the investment management policies, it also avoids the risks of acting in concert with other institutional investors.

Principle 6: Have a clear policy on voting and disclosure of voting activity.

VGI will provide the UK Companies (as appropriate) with the Fund’s (or the accounts, where appropriate) proxy voting records each August for the 12 months ended 30 June. The UK Companies will review this information and may ask for further details where it considers that to be
appropriate. For the policy on voting, please see the explanations provided above.

Principle 7: Report periodically on their stewardship and voting activities.

VIUK will report to the Board of each Fund annually with a summary provided by VGI of the Fund’s stewardship and voting activities for the 12 months ended 30 June. The board of each of the UK Companies will receive a summary provided by VGI of stewardship and voting activities for each account as appropriate, for the 12 months ended 30 June.

Resources, Affiliations & Corporate Strategies

SRI Screening

The index provider (FTSE) has developed a customised SRI screening process designed to analyse companies issuing securities in the index. FTSE has contracted with several independent third-party researchers to analyse and rate each company in the standard benchmark, based on the customised SRI screening criteria. Their independent research is overseen by FTSE’s Responsible Investing Unit.

FTSE based the screening process on internationally accepted principles of corporate responsibility, as laid out in the United Nations Global Compact (UNGC) and the Oslo convention on controversial weapons manufacturers. The UNGC is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with universally accepted principles in the areas of human rights, labour, the environment and anti-corruption.

There are five major areas that FTSE uses to exclude securities:

  • Human Rights – Failure to adhere to the Universal Declaration of Human Rights
  • Labour Standards – Violations of the International Labor Organisation’s Declaration on Fundamental Principles and Rights at Work
  • Environment – Violations of the Rio Declaration on Environment and Development
  • Anti-corruption Principles – Failure to adhere to the United Nationals Convention Against Corruption
  • Military Weapons – Production of landmines, cluster bombs, chemical and biological weapons, nuclear weapons

A quarterly comprehensive review of all index constituents is conducted to determine whether they
will be excluded from the funds’ holdings.

While Vanguard has selected FTSE, after evaluating its screening process and criteria, we will not be directly involved in decisions to exclude or include specific companies from the fund on the basis of social responsibility.

This strict segregation of duties avoids conflict of interest and ensures that investment implications will not drive in- or exclusion in any way. Given the investment policy of providing a return close to market return, the fund aims to be sector neutral despite certain excluded securities.

Aviva Kames Ethical Equity S4 Negative Ethical Life UK Equity 30/11/2009
Zurich Sterling Henderson UK Property Responsible Ownership Life UK Property 25/11/2002
Sterling Kames Ethical Corporate Bond Negative Ethical Life Not Set Fixed Interest 01/07/2007
Zurich Jupiter Ecology CS1 Pn Environmentally Themed Pension Global Equity 26/07/2017
Henderson Global Care UK Income A Ethically Balanced OEIC/Unit Trust UK Equity Income 14/05/1995 More Info (click to view)

SRI / Ethical Overview

The Fund’s investment objective is to provide income with the prospects of capital growth by investing in companies contributing to social well-being and the protection and wise use of the natural environment. The investment policy is to achieve these objectives by primarily investing in UK companies.

A clear socially responsible investment (SRI) proposition offering a high level of ethical integrity for clients requiring a screened approach to investment, avoiding companies involved in such areas as gambling, alcohol production, the military, nuclear energy, and tobacco.

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.

SRI Features

  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Balances company 'pros and cons'/best in sector This fund manager will look at both the 'positive' things companies do and the 'negative' things they do. They will make balanced judgements, in line with their published strategy, before deciding whether or not to invest. Such funds often invest in the best/most ethical companies across most industries, rather than excluding entire sectors. The fund manager may couple this with 'responsible engagement' activity, where they aim to encourage better, more responsible business practices.
  • Eurosif transparency This fund has met 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 This fund invests more than half of its money into very large companies. This will typically mean that the market capitalisation (or value) of the companies they hold will be over £5 to £10 billion.
  • Sustainability themed This fund pays significant attention to sustainability issues either as its primary strategy or alongside other ethical criteria and approaches. This means that environmental and social challenges and opportunities are likely to influence stock selection decisions.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.
  • Faith friendly These funds are likely to have attributes that some faith based investors may welcome such as opposition to armaments, gambling and alcohol.
  • Strictly screened ethical fund The managers of this fund aim for it to be managed as having a high level of negative ethics led avoidance. They may refer to it as 'dark green' - meaning it excludes lots of companies, relative to other ethical options.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.

SRI / Ethical Policy

The Fund aims to provide a sustainable and responsible investment product to investors that adheres to investment criteria for stewardship and ethical, sustainable and responsible investment.

Once an idea has been generated, it is screened for ethical considerations. The Fund adheres to ethical criteria avoiding companies that have products, services or activities which have a negative impact on people, the environment and animals. In arriving at investment views on specific stocks, the team makes full use of the research provided by external providers. In particular Henderson has partnered with industry leading environmental research company, EIRIS, to undertake additional detailed, ethical, environmental and sustainable analysis.

 

The Global Care UK Income fund seeks to invest in responsibly run businesses that exhibit good dividend growth and generate good capital returns over the long term. In order to achieve these aims the fund manager spends a considerable amount of time assessing the sustainability of a company’s long term business model. This involves identifying any factors, including material environmental, social and governance issues which may impact long term profit, cash flow and dividend growth. Company engagement also forms an important part of the investment process.

 

The avoidance criteria are the same as for the Global Care Growth fund, with the exception of meat & dairy production and animal testing for medical purposes. Further detail can be found on the fund’s website: https://www.henderson.com/ukpi/fund/94/henderson-global-care-uk-income-fund.

 

Resources, Affiliations & Corporate Strategies

As part of the team’s investment process, stock ideas are derived from a variety of internal and external sources, and there is no preferred source. In the fund managers’ experience, good investment ideas can arise from many different sources and in different ways. In particular, the accumulated knowledge and experience of the Global Equity income team combined with their strong valuation focus provides an invaluable source of ideas.

The Global Equity Income team has regular meetings with company management and these meetings are a key input in the stock selection process. In arriving at investment views on specific stocks, the team also makes full use of the research provided by external providers. In particular Henderson has partnered with industry leading environmental research company, EIRIS, to undertake additional detailed, ethical, environmental and sustainable analysis.
 
In addition to the team’s proprietary research activities, there are other in-house and external sources as detailed below.

Internal

  • The team has access to research conducted by the remainder of Henderson’s investment professionals via the Henderson Research Hub
  • The Governance and Responsible Investment (GRI) team provides advice and guidance on a range of ESG issues affecting existing and potential fund investments, market trends and development of ESG themes
  • The GRI team also assists with engaging with company management on ESG and SRI issues

External

  • Henderson uses a wide range of external specialist ESG research, including IVIS, CDP, Directors Deals, MSCI, EIRIS, Trucost, ISS and broker research, Strategist research.
OMW F&C Responsible UK Equity Income Ethically Balanced Life UK Equity Income 28/09/2005
Kames Global Sustainable Equity Fund Sustainability Themed OEIC/Unit Trust Global Equity 20/04/2016 More Info (click to view)

SRI / Ethical Overview

We launched our first ethical equity fund in 1989 and since then have broadened our ethical capabilities to include ethical corporate bond and ethical cautious managed funds. Furthermore, we launched a Global Sustainable Fund in April 2016 to increase the options available for our clients. Today we are distinctive among fund providers in offering such a broad suite of ethical products. Below we’ve denoted some of the key characteristics of our ethical proposition:

  • We are committed to ethical investing
  • Sustainable companies make good investment
  • Our approach to sustainability is disciplined, clear and transparent.
  • Our ethical funds are rated by Morningstar OBSR

A 2015 survey named Kames Capital as one of only four ethical investment providers to be used by over 70% of financial advisers which are members of the Ethical Investment Association.

 

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP): £50.88 million as at 31/05/2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management: £1,748.84 million as at 31/05/2017
  • Total assets under management: £45,335 million as at 31/03/2017

 

SRI Policies (Primary strategy in bold)

  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).

SRI Features

-

Corporate Activity

  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.

Links

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SRI / Ethical Policy

Fossil fuel areas of exclusion: coal and tar sands.

Resources, Affiliations & Corporate Strategies

Our ESG Research team is responsible for the bottom up sustainability analysis of all of the companies that the fund invests in. The investment ideas are identified by the investment team and the sustainability analysis is undertaken by the ESG Research team, who make the final decision on whether the company is ranked as a Leader, Improver or Laggard. The fund cannot invest in Laggards.  Whilst the ESG Research team has the final say, there is a clear and open dialogue with the fund managers/analysts regarding the sustainability rating and both parties leverage their knowledge together to fully understand the nuance and ultimately get the right outcome.  Sustainability KPI’s are always identified in order to track sustainability improvement and engage with the company. These KPI’s are then tracked by the ESG Research team, who can upgrade and downgrade stocks appropriately.

It should be noted that the ESG Research team is one of the most experienced in the UK market and that co-manager Craig Bonthron has been managing global environmental and sustainable equity mandates for over 9 years.

 

Charishare Restricted Acc (Blackrock Investment Managers UK Ltd) Ethically Balanced OEIC/Unit Trust UK Equity 29/05/1997
RLP Jupiter Ecology Pn Environmentally Themed Pension Global Equity 26/03/2010
Henderson Global Care Managed A Ethically Balanced OEIC/Unit Trust Global Mixed Asset 01/03/1996 More Info (click to view)

SRI / Ethical Overview

The Global Care Managed Fund is a multi-asset fund and is split broadly 40% international, 40% UK equities and 20% global fixed income. The fund’s objective is to achieve above average long-term capital growth by investing in a mix of assets including UK and overseas equities and fixed interest securities. The Henderson Global SRI Equities team manages the international sleeve of the portfolio and retains overall responsibility for asset allocation decisions. The UK sleeve is managed by the Henderson Global Equity Income team and the global fixed income sleeve is managed by the Henderson Fixed Income team. The international and UK portions of the Fund follow the investment processes of the Global Care Growth Fund and Global Care UK Income Fund respectively.

 

The fund’s ESG principals are centered around both Sustainability and Corporate responsibility:

Sustainability: the long-term social and environmental challenges facing the world are reshaping the economic landscape. Whatever industry or geography a business is in, an environmental and sustainable approach will increasingly be required and rewarded by investors. Additionally, new investment opportunities will be created for those companies providing sustainability solutions.

 

Corporate responsibility: how companies manage their responsibilities in the marketplace, the workplace, in the community and the environment is now an important dimension of business practice, and thus, financial performance. SRI analysis adds value to investment by generating insights into the overall quality of management in the face of changing risks and expectations.

 

SRI / themed / ethical assets under management – overview

 

As of 31.3.2017 Henderson had £962m in SRI strategies of which Nick and Hamish had responsibility for £783m.

 

  • Fund Size (GBP):   £247m at 31.3.2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £962m at 31.3.2017
  • Total value of assets covered by responsible ownership policy:   All of Henderson’s £103.1bn in AuM is covered by the responsible ownership policy
  • Total assets under management:   Henderson had AuM of over £103.1bn at 31.3.2017

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.
  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.
  • Fracking and tar sands excluded Fund avoids companies involved in fracking and tar sands - which are controversial oil and gas extraction practices
  • Gambling avoidance policy This fund avoids companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy This fund avoids companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Eurosif transparency This fund has met 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.
  • Sustainability themed This fund pays significant attention to sustainability issues either as its primary strategy or alongside other ethical criteria and approaches. This means that environmental and social challenges and opportunities are likely to influence stock selection decisions.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.
  • Faith friendly These funds are likely to have attributes that some faith based investors may welcome such as opposition to armaments, gambling and alcohol.
  • Strictly screened ethical fund The managers of this fund aim for it to be managed as having a high level of negative ethics led avoidance. They may refer to it as 'dark green' - meaning it excludes lots of companies, relative to other ethical options.
  • Aims to generate positive impacts This fund aims to help deliver positive social or environmental impacts or outcomes. Strategies and approaches vary. Some funds measure outcomes others do not. See fund literature for further information.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper
  • Clean energy themed This fund invests in clean technology / clean energy companies. See fund information for further details.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Responsible Ownership policy for non SRI funds This fund manager applies 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 is not limited to ethical or SRI options.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • 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
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager 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 This company has reviewed or is currently reviewing (or in other ways 'actively managing') their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the light of climate change related concerns and the company's view of its anticipated impact on the companies they invest in.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

The Global Care Managed fund is comprised of three investment sub funds – international equities, UK equities and global fixed income. The international equities sub fund is managed according to the investment principles of the Global Care Growth fund. The UK equities sub fund is managed according to the investment principles of the Global Care UK Income fund. The global fixed income sub fund is managed with a focus on best-in-class companies with respect to their ESG criteria and applying the same avoidance criteria as for the Global Care UK Income fund.

 

Henderson Global Care Growth Fund

The Global Care Growth fund employs an integrated approach to sustainable and responsible investment (SRI), combining positive and negative investment criteria, and considering both the products of a business (what it does) and the operations (how it does it).

 

Positive selection criteria

The positive criteria lead the managers 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 Sustainable Development Goals adopted by the United Nations in 2015.

 

The managers use a thematic framework to identify those businesses that are strategically aligned with the four megatrends of climate change, resource constraints, population growth and an ageing population, and by virtue of this offer the potential for sustainable revenue growth. Derived from the four megatrends, the fund has ten sustainability themes of which five are environmental and five are social. For every investment it must be possible to identify at least one of the following themes as a value driver to the business. For a more detailed explanation of our themes please refer to our Ten themes for sustainable investment document. https://az768132.vo.msecnd.net/documents/54768_2016_10_31_12_54_12_860.gzip.pdf.

 

Five environmental themes: Cleaner Energy, Sustainable Transport, Water Management, Environmental Services, Efficiency

 

Five social themes: Health, Sustainable Property & Finance, Knowledge & Technology, Safety, Quality of Life

 

ESG integration

Environmental, social and governance (ESG) research is undertaken for all investments. The managers believe companies with sound governance practices and strong stakeholder relations, that manage relevant environmental and social risks responsibly, have a greater propensity to create sustainable value for shareholders.

 

Company engagement

Company engagement forms an important part of the investment process. Meetings incorporate a

wide range of topics including environmental and social issues where relevant. The managers take an active approach to communicating their views to companies and seeking improvements in performance, including appropriate standards of corporate responsibility.

 

Avoidance criteria

In many ways the negative criteria are a reflection of the positive criteria. The fund seeks to avoid those businesses that stand to be disrupted by the environmental and social megatrends (and that therefore have unsustainable business models), and also avoid those that are involved in activities regarded as being contrary to the development of a sustainable economy and harmonious society.

 

All holdings in the fund 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.

 

Further detail can be found on the fund’s website: https://www.henderson.com/ukpi/fund/92/henderson-global-care-growth-fund.

 

Henderson Global Care UK Income fund

 

The Global Care UK Income fund seeks to invest in responsibly run businesses that exhibit good dividend growth and generate good capital returns over the long term. In order to achieve these aims the fund manager spends a considerable amount of time assessing the sustainability of a company’s long term business model. This involves identifying any factors, including material environmental, social and governance issues which may impact long term profit, cash flow and dividend growth. Company engagement also forms an important part of the investment process.

 

The avoidance criteria are the same as for the Global Care Growth fund, with the exception of meat & dairy production and animal testing for medical purposes. Further detail can be found on the fund’s website: https://www.henderson.com/ukpi/fund/94/henderson-global-care-uk-income-fund.

Resources, Affiliations & Corporate Strategies

INTERNAL research resources

 

Henderson wide

The managers of the Global Care Managed fund have access to research conducted by Henderson’s wider team of investment professionals via the Henderson Research Hub. The Governance and Responsible Investment (GRI) team also provide advice and guidance on a range of ESG issues affecting existing and potential fund investments, market trends and development of ESG themes. The GRI team also assists with engaging with company management on ESG issues.

 

Internal research is sourced from company meetings, company financial statements and also sell-side analysts. The investment team integrates ESG considerations into investment decision making and ownership practices. They undertake an evaluation of each investee company’s business and workplace standards, social impact, and corporate stewardship. They believe that sustainability and corporate responsibility (CR) plays a vital role in the long-term performance of a company.

 

EXTERNAL research resources

           

Vigeo EIRIS is the main source of management for the Funds’ exclusion criteria. Vigeo EIRIS is one of the largest sustainable, responsible and ethical research companies globally. The Vigeo EIRIS research team covers over 3,000 companies and provides the managers with detailed reports into a company’s activities, to ensure adherence to the Fund’s strict ethical criteria. Should an investment idea not be covered already, then Vigeo EIRIS conduct bespoke research on behalf of the portfolio managers.

 

Other sources of external research are:

 

  • MSCI, ISS, RepRisk, IVIS, CDP, TruCost, HOLT
  • Stock broker research
  • Strategist research

 

External resources such as MSCI and TruCost are used to populate the team’s monthly ESG exposure, benchmarking and risk monitoring report. This report shows the exposure of the portfolio to companies’ rated highest risk for environmental & social performance, ESG controversies, corporate governance issues and carbon exposure relative to the fund’s benchmark.

Aviva Premier Ethical Ethically Balanced Pension UK Equity 30/04/1996 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Premier Ethical" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

-

Corporate Activity

-

Links

-

SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Royal London Ethical Bond A Ret Negative Ethical OEIC/Unit Trust UK Equity 31/01/2007 More Info (click to view)

SRI / Ethical Overview

The Fund invests predominantly in investment grade UK corporate bonds which meet predefined ethical criteria. The policy of the Fund considers all of the following ethical issues: alcohol, armaments, gambling, pornography, tobacco, human rights, animal testing and the environment.

 

SRI / themed / ethical assets under management – overview

 

  • Fund Size (GBP):   £440.70m as of 31 May 2017.
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:    £11,793.22m as of 31 May 2017.
  • Total value of assets covered by responsible ownership policy:   £1,416.04m as of 31 May 2017       (Please note that this figure only includes our sustainable range, however, RLAM’s Responsible Investment Policy will detail how this is an over-arching approach across most of the firm’s assets).
  • Total assets under management:   £104,507.32m as of 31 May 2017.

 

SRI Policies (Primary strategy in bold)

  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.
  • Gambling avoidance policy This fund avoids companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy This fund avoids companies that derive significant income from pornography. See fund details for further information.
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

  • RSMR Rated Fund rating agency 'Rayner Spencer Mills Research' have awarded this fund 'rated' status.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • UK Stewardship Code signatory
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

Our ethical investment process begins with screening for eligible investments, which is conducted by specialist independent consultancy EIRiS (Ethical Investment Research Services). With over 25 years’ experience, EIRiS is a leading provider of research into the environmental, social and governance (ESG) and ethical performance of companies. RLAM’s ethical framework combines the avoidance of companies involved in excluded activities with the identification of best of breed companies in permitted sectors.

Companies that generate over 10% of their turnover from any one or a combination of the following five categories are excluded:

Alcohol                               Brewing, distilling or selling alcoholic drinks

Armaments                      Manufacturing armaments or nuclear weapons, or associated strategic products

Gambling                          Operating betting shops, casinos or amusement arcades

Tobacco                            Growing, processing or selling tobacco products

Pornography                    Providing adult entertainment services

 

 

 

 

If a company generates more than 10% from any of one the excluded sectors (or 10% of any of the sectors combined), then it is likely that that company’s involvement in that excluded sector is a noteworthy part of their business and strategy.

 

Also, this threshold is deemed to be realistic and appropriate in terms of assessing a company, given that it may not be possible to always pinpoint the exact turnover derived from an excluded activity. This threshold ensures that a minimum of 90% of each holding meets the ethical criteria.

 

The screening process also identifies companies that have the opportunity to make a positive impact. Companies with inappropriate or inadequate policies or systems in the following areas are also excluded:

 

Environment                    Companies with a high environmental impact and no evidence of appropriate environmental management systems

Human rights                   Companies in strategic sectors operating in countries of concern with no evidence of policies or systems to manage human rights risks

Animal testing                 The Fund excludes companies that test cosmetics on animals or provide animal testing services. Our Ethical Bond Fund additionally excludes companies that test household products, other products (excluding medicines) and their ingredients on animals.

Resources, Affiliations & Corporate Strategies

As previously outlined, our ethical investment process screening is conducted by specialist independent consultancy EIRiS (Ethical Investment Research Services). With over 25 years’ experience, EIRiS is a leading provider of research into the environmental, social and governance (ESG) and ethical performance of companies.

 

When researching a bond we typically use the following sources of corporate information:

 

  • Audited and unaudited financial accounts
  • Ratings reports/analysis
  • Company meetings/presentations
  • Third party equity/credit research
  • Specific investor reports
  • Barclays Live – key tool for relative value assessment
  • Regulatory News Service – ‘Investigate’
  • The Credit team employs a range of models, both external and bespoke.

 

The Credit team also uses a number of external providers of information for ongoing surveillance. Principally these are:

 

  • Bloomberg, which is used for bond analytics and descriptive data, including bond documentation and access to equity research reports.
  • S&P, through their ‘Ratings Direct’ and ‘Capital IQ’ services. Ratings Direct provides up to date access to bond rating reports and research and other company and sector financial data across the rated bond universe and Capital IQ provides access to reported financial information of thousands of listed and unlisted companies. Usefully, we are able to embed the financial data provided by Capital IQ into bespoke financial models that provide inputs that are relevant to RLAM’s evaluation of credit. This represents very time effective and high quality provision of credit ratios to enhance the decision making process in higher profile areas of the corporate bond market.
  • Barclay’s Live database to help assess relative value across issuers and sectors and the production of issuer credit curves.

 

This external data is used to supplement RLAM’s research effort and, in particular, enables our Analysts to focus their primary analysis and financial modelling on lower profile corporate bonds that we consider to be less extensively researched by the wider market. Maintenance of research does not follow a prescriptive formula but will typically tend to follow the reporting timetable of our bond issuers (e.g. RMBS/covered bonds – monthly; CMBS – quarterly; corporates – semi-annual) supplemented by the team’s ongoing focus on market developments and the formal alerts outlined above. Whilst we believe a flexible and interactive approach is optimal and practical given our team size, RLAM has a large database of relevant and targeted credit information that can be accessed by all members of the team effectively.

 

RLAM is well served by the sell-side community, particularly in the secured space, as our counterparties know the level of embedded knowledge across the team, both in terms of stocks and underlying client requirements, and the likelihood of receiving a prompt evaluation of any proposal.

 

It is worth re-emphasising that, whether primary inputs have been internally derived or otherwise, we will never delegate the final decision as to whether a bond is selected in our portfolios, given our very different philosophical approach to valuation. In addition, as previously discussed, our team structure and overlap between the research and Fund manager functions ensures that the stock selection process outlined above is not undertaken by any individuals operating in isolation from the rest of the team. By contrast, this process benefits from continuous and ongoing interaction between the whole team, allowing all members of the team, with different and complementary skills and experience, to contribute to investment decisions.

 

RLAM Voting Policy:  

 

FNW Standard Life Ethical Negative Ethical Life UK Equity 13/12/2005
Aviva Conscience (xNM) Ethically Balanced Life UK Equity 31/08/1987
Threadneedle UK Social Bond Z Ret Acc Social Themed OEIC/Unit Trust UK Fixed Interest 04/12/2013 More Info (click to view)

SRI / Ethical Overview

The Threadneedle UK Social Bond Fund brings social investment into the mainstream with a unique market approach to social investing.  The Fund, launched in partnership with Big Issue Invest, aims to build a diversified portfolio of bonds issued by organisations to deliver a clear social outcome, primarily in the UK, as well as respectable financial returns in line with those generated by mainstream UK corporate bond funds.

By investing specifically in bonds that have a clear social outcome we are encouraging the issuance of new bonds thus helping provide a new source of capital to social sector organisations. 

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Measures positive impacts The fund aims to have a positive effect on society and/or the environment. Fund managers of this kind actively aim to measure the impact of their investments in order to ensure they are having the desired effect.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.

SRI Features

  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Sustainability themed This fund pays significant attention to sustainability issues either as its primary strategy or alongside other ethical criteria and approaches. This means that environmental and social challenges and opportunities are likely to influence stock selection decisions.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.

SRI / Ethical Policy

The core premise for the UK Social Bond Fund is that we believe that:

  • There is a significant investment opportunity for bonds to generate both attractive risk-adjusted financial returns and positive social outcomes.
  • Bonds with attractive yield, liquidity and social characteristics can deliver a diversified portfolio with daily liquidity.
  • Our partnership with Big Issue Invest validates and enhances the social outcome of the portfolio.

The investment policy is to maximise exposure to socially beneficial activities and development, based on assessments produced under the Fund’s Social Assessment Methodology. This methodology uses a social universe derived from the constituents of the Merrill Lynch £ Non-Gilt Index (c.1,050 bonds), together with a select number of non-benchmark bonds. These are weighted and mapped across into the eight key social outcome fields. This forms a social universe of around 350 - 400 securities.

In addition, these bonds also need to have either yield or liquidity or both as shown in the diagram. We refine the pool of potential investments based on the combined analysis of our investment grade credit team (yield and liquidity) and our governance and responsible investment (GRI) team (degree of social impact and intensity). A proportion of the Fund will be in highly liquid but lower yielding instruments, with the remaining proportion in less liquid instruments and charity bonds.

From this universe of potential investments, the portfolio manager uses an innovative Social Assessment Methodology, to evaluate the ‘social intensity’ of qualifying bonds, with each security ranked as high, medium or low social intensity. Investments are taken from this universe and analysed by GRI team. The portfolio manager then takes these social aspects into account when building a diversified and socially-balanced portfolio, which meets the required liquidity and financial returns requirements.

The portfolio manager has ultimate responsibility for portfolio construction. The portfolio will be well-diversified, with a minimum of 80% in domestically-focused bonds. Securities will predominantly be investment grade, with some unrated bonds and smaller issues especially when they have high social value. 

Particular attention is paid to managing liquidity, through holding more liquid social investments and cash, for the purposes of servicing the daily liquidity requirements of the portfolio.

The Fund’s Social Advisory Committee plays a key role in monitoring the construction and ongoing management of the portfolio and meets formally each quarter, as well as on an ad hoc basis when appropriate. Its remit includes the application of the Social Assessment Methodology across the portfolio; advising the portfolio manager on the social intensity of existing and potential investments; and challenging, where appropriate, the social analysis and social footprint of the strategy’s portfolio.

Social Assessment Methodology

Big Issue Invest, working with our GRI team, has developed a Social Assessment Methodology that positively screens all bonds with a focus on the degree to which they deliver positive social outcomes across eight areas: affordable housing; education; employment and training; health and social care; financial inclusion; community services; transport and communication infrastructure; utilities and the environment.  To assess the overall social intensity of qualifying bonds we use the methodology framework to guide investment decisions from a social perspective. Potential investments are reviewed to assess their overall ‘social intensity’ also noting the demographic characteristics of the issuer.

Additional note: 

As a company, we have a long standing history of charitable giving and have our own Foundation. The Foundation, a dedicated entity through which the company provides support for charitable activities, receives a proportion of the profits from this Fund.

 

Resources, Affiliations & Corporate Strategies

Our main focus is on proprietary internal research where we use the analysis of our highly qualified investment professionals from the Fixed Income team, the Governance and Responsible investment team along with the Equity team to generate an investment advantage. We also receive information from digital media sources (e.g Bloomberg, Reuters, Moody’s etc), major brokers, smaller regional brokerage houses and other sources such as conferences, trade journals and other media e.g. newspapers and magazines. 

Simon Bond is the lead portfolio manager and has ultimate responsibility for investment decisions in the Fund. He is a senior portfolio manager in our investment grade credit team which has been managing investment grade bonds since the firm’s formation in 1994. Simon has a long association with social outcome related investing, having started his career analysing Housing Association bonds in the late 1980’s. He is part of the wider fixed income group that comprises 86 experienced fund managers with an average of 18 years’ industry experience. 

Our Governance and Responsible Investment team, led by Iain Richards, has an established environmental, social and governance approach that forms a screening process which is integrated into the overall investment approach used to manage the strategy. The Fund employs both negative screens and positive screens. The team has an average of 13 years’ industry experience.

Big Issue Invest acts as Social Advisor to the strategy, via the Social Advisory Committee. The Committee has six members, comprising three representatives from Big Issue Invest, two representatives from Columbia Threadneedle and an independent member. The Committee’s role is to advise, review and challenge the strategy’s investments from a social performance perspective. The Committee meets quarterly and also holds an annual meeting to review the portfolio and strategy’s investment methodology from a strategic perspective.

Additional note:

We are also a founding signatory to the UN backed Principles for Responsible Investment, as well as signatory to the UK Stewardship Code, the Extractive Industries Transparency Initiative and the Carbon Disclosure project. We are an active member of a number of other responsible investment initiatives including (amongst others): the UK Sustainable Investment and Finance Association, the European Social investment Forum, the Global Governance Forum.

Scottish Widows ThreadneedleUK Social Bond Pn S1 Social Themed Pension UK Fixed Interest 14/11/2016
Aviva Liontrust Sustainable Future Absolute Growth S1 Sustainability Themed Life Global Equity 24/06/2001
OMW Premier Ethical Pn A Ethically Balanced Pension UK Equity 08/06/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Premier Ethical" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Kames Ethical Corporate Bond EP Negative Ethical Pension UK Fixed Interest 05/05/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Corporate Bond" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Cler Med Ethical Pn Negative Ethical Pension Global Hedge 31/10/2000
Aegon Ethical Managed (Flexible Target) Pn range Negative Ethical Pension Global Mixed Asset 27/01/2016
Aviva Royal London Select Portfolio (40-85% Shares) Sustainability Themed Life Europe >50% UK Mixed Asset 05/04/2006
Aviva Ethical Distribution AL Acc Negative Ethical Life UK Mixed Asset 30/04/2008 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Invests via AXA ethical fund - negative screen bias, a distribution fund ABI Mixed Investment 20-60% shares

Resources, Affiliations & Corporate Strategies

OMW F&C Responsible UK Equity Growth Pn Ethically Balanced Pension UK Equity 15/11/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "BMO (F&C) Responsible UK Equity Growth" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

M&G PP Ethical Pn Ethically Balanced Pension UK Equity 08/12/1999
L&G Ethical Global Equity Index PMC Pn G17 Sustainability Themed Pension Global Equity 12/05/2004
EdenTree Amity International A Ethically Balanced OEIC/Unit Trust Global Equity 12/09/1999 More Info (click to view)

SRI / Ethical Overview

The Fund aims to achieve long term capital growth with a reasonable level of income through a diversified portfolio of international companies. The Amity International Fund seeks to invest in a portfolio of companies which make a positive contribution to society and the environment through sustainable and socially responsible practices. These Funds seek to avoid investment in certain areas such as companies which have a material involvement in alcohol, tobacco and weapon production, gambling and publication of violent or explicit materials.

 

 

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP):   £221.89m as at 31/05/2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £550m as at 31 December 2016
  • Total value of assets covered by responsible ownership policy:   100%
  • Total assets under management:   £2.5bn as at 31/05/2017

 

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Has a policy which states that the fund considers environmental issues (e.g. pollution, climate change, resource management, environmental impact)
  • Health & wellbeing policies Has a policy that sets out the fund's aim to support companies that offer positive lifestyle, health or 'wellbeing' related benefits.
  • Limits exposure to carbon intensive industries Aims to reduce or limit exposure to carbon intensive industries which are considered to be major contributors to climate change. Funds vary - but this is likely to mean a fund has below average levels of investment in areas such as oil & gas, mining or airlines. 'Best in sector' companies may, however, be allowable.
  • Measures positive impacts The fund aims to have a positive effect on society and/or the environment. Fund managers of this kind actively aim to measure the impact of their investments in order to ensure they are having the desired effect.
  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).
  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.
  • Social policy Considers social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact).
  • Governance policy Considers issues relating to corporate governance such as board structure, remuneration, bribery and/or corporate corruption.
  • Animal welfare policy The fund has a policy that requires specific animal welfare standards to be adopted by companies in order for them to be allowable for investment within the fund.
  • Nuclear policy Has a published policy that sets out the fund's position with regard to nuclear power. In most cases this is likely to mean avoidance of companies with significant involvement in the nuclear industry, although some funds may require absolute avoidance.
  • Animal testing policy The fund has criteria that guide when it can or can not invest in companies that are involved in testing their products on animals. This may mean the fund avoids pharmaceutical companies even where testing is required by law (for safety reasons).
  • Tobacco production avoided Does not invest in manufacturers or tobacco (or related) products. The fund, however, may invest in retailers of such products (e.g. supermarkets or hotels.)
  • Armaments manufacturers avoided Avoids companies that manufacture products intended specifically for military use. (Funds may, however, invest in manufacturers of products that are used by the military but are not specifically intended for military/defence use.)
  • Coal, oil &/or gas majors excluded This fund will not invest in the largest coal, oil and/or gas producing companies. Funds vary. Some may invest in smaller producers or companies where this is considered to be a relatively minor part of their business.
  • Climate change / GHG policy Considers climate change related issues such as greenhouse gas/carbon emissions. Strategies vary but funds that consider climate issues typically require the careful management of climate related risks (and opportunities) if they are to select a company for investment.
  • Invests in clean energy/renewables This fund invests in companies in the clean technology/renewable energy related industries. Fund strategies vary. In practice some may invest a small percentage in this area whereas others may have significant exposure to this area. Check fund literature for details.
  • Alcohol production excluded (new) This fund avoids companies that are involved in the production of alcohol. See fund literature for further information.
  • Fracking and tar sands excluded Fund avoids companies involved in fracking and tar sands - which are controversial oil and gas extraction practices
  • Gambling avoidance policy This fund avoids companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy This fund avoids companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • RSMR Rated Fund rating agency 'Rayner Spencer Mills Research' have awarded this fund 'rated' status.
  • Positive selection bias The ethical focus of this fund is around the consideration of the positive/good or useful things companies do. The fund may also have negative avoidance criteria - but this may not be the main ethical strategy applied by the fund managers.
  • Negative selection bias The ethical strategy of this fund relates primarily to avoidance criteria. In practice this means that positive company behaviours will not normally be allowed to override negative activities.
  • Eurosif transparency This fund has met 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.
  • Favours cleaner, greener companies This fund is likely to invest 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.
  • Favours companies with strong social policies This fund invests in line with positive strategies that relate to 'people' issues - such as human rights, labour standards and equal opportunities. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices.
  • Faith friendly These funds are likely to have attributes that some faith based investors may welcome such as opposition to armaments, gambling and alcohol.
  • Strictly screened ethical fund The managers of this fund aim for it to be managed as having a high level of negative ethics led avoidance. They may refer to it as 'dark green' - meaning it excludes lots of companies, relative to other ethical options.
  • Aims to generate positive impacts This fund aims to help deliver positive social or environmental impacts or outcomes. Strategies and approaches vary. Some funds measure outcomes others do not. See fund literature for further information.
  • Available via an ISA This fund is available via a tax efficient ISA product wrapper
  • Over 50% small/mid cap More than half of this funds assets are invested in smaller or medium sized companies.

Corporate Activity

  • ESG/SRI engagement Fund Manager 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. Focus will typically be on major holdings and highest risks/opportunities. This may apply to a single fund or a group of funds or other assets.
  • Responsible Ownership policy for non SRI funds This fund manager applies 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 is not limited to ethical or SRI options.
  • Integrates ESG factors into all/most fund research This fund manager researches environmental, social and governance issues when deciding whether or not to invest in a company. This applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Fund managers have in-house expertise that enables them to have in-house voting guidelines, review their own shareholder voting decisions, for example.
  • 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
  • Publish Responsible Ownership/Stewardship report Fund manager publishes information that sets out 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 Fund manager 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 This company has reviewed or is currently reviewing (or in other ways 'actively managing') their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the light of climate change related concerns and the company's view of its anticipated impact on the companies they invest in.
  • Regularly lead collaborative ESG initiatives This fund manager has told us they regularly initiate or help lead industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory This fund management company has signed up to the UN backed 'Principles of Responsible Investment' initiative.
  • Boutique/specialist fund manager This fund management company specialises in sustainable, responsible, ethical, ESG or responsible ownership related investment. This is central to their corporate strategy and influences all investment decision making. Note - different strategies may apply to different fund options. Check fund manager supplied links for further information.

SRI / Ethical Policy

Ethical Approach

 

EIM is a pioneer of Socially Responsible Investment (SRI) and launched its first SRI investment fund in 1988. We utilise both negative and positive screening within the investment process. In respect of negative screening, we avoid companies whose activities derive in excess of 10% of their pre-tax profit or turnover from alcohol production, gambling, pornographic and violent material, tobacco production, strategic armaments, animal testing and intensive farming.

 

We look for the positive aspects in potential investments to ensure we invest in companies that are making a positive contribution to society and the environment. These may cover good business and corporate governance practices and community relations. We also look for companies promoting good standards of education, environmental management and healthcare. We look favourably upon companies which promote human rights, good labour relations and urban regeneration. As well as our own in-house research (including special thematic reports) we use a range of sources, including independent data from Risk Metrics in respect of Environmental, Social and Governance (ESG) issues.

 

EdenTree employs both negative and positive screening to its stock selection process and engages with companies before, during and after investing. This process is integrated into our overall investment management process and we use the following ‘screens’ when considering the suitability of an investment.

 

Positive Screening

 

Our positive screening approach centres on what we define as the ‘Nine Pillars’ of responsible investing.  We are particularly focused on areas that provide the necessities of life such as healthcare, water, education and housing, or products and services that are sourced ethically and produced sustainably. We also favour ‘solutions-focused’ companies that are leading the way in technologies that may help solve some of the world’s most challenging problems, such as climate change, alternative energy or water conservation. In addition, we focus on business behaviour, expecting the companies we invest in to have a well-managed policy for promoting human rights, environmental protection, labour rights and business ethics.

 

Negative Screening

 

Our negative screens include alcohol production, gambling operations, pornographic or violent material or weapon production. We also consider animal testing, oppressive regimes and intensive farming in our criteria when evaluating a company.

 

Amity Panel Review

 

The Amity Panel meet with the fund management and research team 3 or 4 times each year to review the Amity Fund portfolios, the recent investment decisions and to discuss the latest Socially Responsible research and trends. The purpose of the Amity Socially Responsible Investment Advisory Panel is to:-

 

• Help to ensure that the EdenTree Amity Range of Funds meet the stated aims and objectives.

• Provide advice in the formulation of policy in the light of changing social and environmental issues.

 

The Amity Panel will provide advice to the SRI team in a number of ways

 

• Advising on emerging issues or topics relevant to SRI criteria.

• Provide advice and guidance on individual companies or sectors.

• Provide advice and guidance on engagement work.

 

The independent panel is made up of a number of industry experts, including:

 

• The Right Reverend Dr Nigel Peyton – The Bishop of Brechin

• William Oulton – Global Head of Responsible Investments, First State Investments

• George Prescott – ex Ecclesiastical Deputy CEO and CFO, former ABI board member

• Helen Crosby – Sustainability Expert.

• Julie McDowell – Independent Consultant

 

The SRI team is responsible for ESG research and advising Fund Managers. The team has access to a number of external resources for decision making. We have appointed Sustainalytics as our ESG data provider which serves as a starting point for our ESG research. This is complemented by NGO sources, company reports, market news and SRI initiatives. The SRI team also directly meets with companies to discuss sustainability and governance issues.

Resources, Affiliations & Corporate Strategies

There is an in-house team responsible for the execution of our SRI policy; they focus on research, engagement and proxy voting.

 

 All UK proxy voting decisions (includes Guernsey, Jersey and Isle of Man) are taken and executed in-house, signed off by a Fund Manager. We take IVIS (Institutional Voting Information Service) provided by the Investment Association to inform thinking. We have appointed Glass Lewis & Co. to be our sole discretionary research and proxy execution provider in all jurisdictions other than the United Kingdom (including Guernsey, Jersey and the Isle of Man), delegating to it the responsibility for the instruction and execution of international proxy voting at all general and special international company meetings.

 

The team shares responsibility for company engagement, whether it is in house or in partnership with SRI organisations or other investors.

Scot Eq Kames Ethical Corp Bond Pn Negative Ethical Pension Europe >50% UK Fixed Interest 15/01/2007 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Corporate Bond" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

L&G Kames Ethical Equity Pn G25 Negative Ethical Pension UK Equity 12/04/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Equity" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Has a policy that states the fund considers 'ethical' issues (e.g.armaments, tobacco, gambling and/or pornography). These vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

-

Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Liontrust Sustainable Future European Growth Pn S2 Sustainability Themed Pension Europe Ex-UK Equity 05/04/2001 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Liontrust Sustainable Future European Growth" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Sustainability policy Considers issues relating to the sustainability agenda (e.g. resource usage, environmental impact and/or social issues such as equal opportunities, human rights and adherence to recognised codes).

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

SJP Ethical Ethically Balanced Life Global Equity 02/11/1998
Scot Wid Environmental Pn S2 Environmentally Themed Pension UK Equity 28/07/2000 More Info (click to view)