Wellington Global Impact Fund
SRI Style:
Sustainable Style
SDR Labelling:
Not eligible to use label (out of scope)
Product:
SICAV/Overseas
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
08/12/2016
Last Amended:
Aug 2024
Dialshifter (
):
Fund/Portfolio Size:
£611.53m
(as at: 31/03/2026)
ISIN:
IE00BF5H4B91, IE00BYVQ3R21, IE00BN7J4C01, IE00BYX0WN13, IE00BD6PGZ66, IE00BGPNQX08, IE00BFZ58Q61, IE00BFZ58P54, IE00BD72Z263, IE00BLCH1Y61, IE00BDB47662
Contact Us:
Objectives:
Fund manager declined to supply an update - fund last updated August 24
Sustainable Investment Objective
The Global Impact Fund will seek to understand some of the world’s social and environmental problems and to identify and invest in companies that it believes are addressing these needs in a differentiated way through their core products and services. Through the portfolio’s investments, the Investment Manager seeks to improve access to, and the quality of, basic life essentials, reduce inequality and mitigate the effects of climate change.
The Fund expects to maintain a minimum of 90% of its net assets in companies which meet the above criteria and which are assessed to be Sustainable Investments. Sustainable Investments may contribute to either environmental or social objectives. Although the proportion of Sustainable Investments with environmental or social objectives may vary over time, the Investment Manager will maintain at least 10% in Sustainable Investments with an environmental objective and at least 20% in Sustainable Investments with a social objective.
Sustainable, Responsible
&/or ESG Overview:
The Global Impact approach seeks to generate attractive total returns by investing in innovative companies whose core products and services addresses some of the world’s major social and environmental challenges. As a long-term objective, the investment team seeks to outperform the broad equity markets as this often represents the funding source of an allocation to Global Impact.
We believe that…
- The world’s greatest problems present some of the world’s greatest investment opportunities.
- Addressing the largest social and environmental challenges will require significant investment. This investment creates the opportunity for companies to apply innovation and scale to growing end markets.
- The market often underestimates the magnitude and duration of growth and returns associated with this investment.
- Our discipled returns focus enables us to identify underappreciated value within our impact universe.
Primary fund last amended:
Aug 2024
Information directly from fund manager.
Fund Filters
Sustainability - General
Has policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See individual entry information.
Has a significant focus on sustainability issues
Aim to encourage higher sustainability standards through responsible ownership / stewardship / engagement / voting activity
Use the UN Global Compact to inform or help direct where they can or cannot invest. Will typically not invest in companies with significant breaches (low standards) - strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Aim to support the shift to a sustainable future. See eg https://www.transitionpathwayinitiative.org/
Publicly report performance against named sustainability objectives
Has a theme or investment strand focused on the shift to a circular economy - where products are reused and recycled not incinerated or dumped. See eg https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview
Environmental - General
Has a policy or theme that relates to managing natural resources more efficiently. Strategies vary. See individual entry information.
Aims to invest in companies with strong or market leading environmental policies and practices. Strategies vary. See individual entry information for more detail.
Climate Change & Energy
Avoid investment in major coal, oil and/or gas (extraction) companies. Strategies vary.
Avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary.
Avoid investing in companies / assets with coal, oil and gas reserves. See individual entry information for further details.
Invest (or may invest) in clean / renewable energy companies and other assets. The proportion directly or indirectly invested in renewable energy may vary over time.
Encourage the transition to lower carbon activities through asset selection and / or responsible ownership activity.
Has an energy efficiency theme - typically meaning that the manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invest in renewable energy companies and / or companies where renewable energy is a significant part of their business. Strategies vary.
Has a policy which describes the avoidance or limited investment in the nuclear industry. Strategies vary.
Excludes companies and other assets with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Social / Employment
Has policies or themes that set out their approach to health and wellbeing issues, typically aims to invest in companies with high standards - or encourage high standards.
Ethical Values Led Exclusions
Has policies that set out their position on ethical or 'personal values' based issues. Strategies vary.
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of tobacco products including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Avoids companies that manufacture weapons intended specifically for military use. Strategies vary - may or may not include non-strategic military products.
Has a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Avoids companies that produce alcohol. Strategies vary; some may allow a small proportion of revenue to come from this area.
Avoids companies with significant involvement in the gambling industry. Some may allow a small proportion of revenues to come from this area.
Meeting Peoples' Basic Needs
Have policies or themes that set out the position on investment in the water sector and/or sanitation. Strategies vary.
Has a responsible food production or agriculture theme or strand of investment. May have a single or many themes.
Healthcare and or medical theme or area of investment - may have a single or many themes
Gilts & Sovereigns
Does not invest in, or excludes, gilts and/or government bonds.
Banking & Financials
Can include banks as part of their holdings / portfolio.
May invest in insurance companies.
Governance & Management
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Has policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination.
Encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Product / Service Governance
Find fund / asset managers that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
Asset Size
Invests in a combination of small, medium and larger (potentially multinational) companies / assets.
Targeted Positive Investments
Invests >25% of their capital in companies where a major part of their business is focused on helping to address environmental or social challenges.
Invests >50% of their capital in companies where a major part of their business is focused on helping to address environmental or social challenges.
Impact Methodologies
Has policies that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary.
Aims to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Investments that aim to deliver positive impacts and measure those impacts may be referred to as 'Impact' - although impact measurement is not restricted to Impact investments. Strategies vary.
Investments which are specifically marketed as ‘Impact investments' and work to deliver both financial performance and specific, measurable positive, real world social and/or environmental benefits. Strategies vary.
Specifically sets out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Specifically states that they aim to deliver positive social (i.e. people related) impacts and/or outcomes.
Directs investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Specifically sets out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
Aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
Invests more than 50% of capital in assets which are regarded as being significantly focused on providing solutions to environmental or social challenges. Strategies vary.
Policy explains the ways in which the manager believes things need to change in order to deliver a more sustainable future, which they are working to help achieve.
How The Fund/Portfolio Works
Focuses on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Has principle approach to apply positive or negative ethical, social and / or environmental screens. Strictly screened investments are likely to exclude more companies than other related options. Strategies vary.
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Invests in assets which can be 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Investment selection process uses internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Invests in assets which have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) together with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Publish explanations of their ethical, social and/or environmental policies online (i.e. investment decision making strategies/ buy/sell &/or asset management strategies).
Does not use stock lending for performance or risk purposes.
Unscreened Assets & Cash
Holds between 70-79% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Holds between 80-89% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Holds at least 90% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Intended Clients & Product Options
Designed to meet the needs of individual investors with an interest in sustainability issues.
Designed to meet the needs of individual investors with an interest in ‘Impact investment’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies regarded as beneficial to people and / or the planet. Strategies vary.
Available via a tax efficient ISA product wrapper.
Only applicable for DFM’s & portfolio providers. Finds those that offer an SRI / ESG portfolio option
Only applicable for DFM’s & portfolio providers. Find service providers who offer multiple SRI / ESG portfolio options
Labels & Accreditations
Find options classified under Article 9 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 9 of the SFDR applies to financial products that have sustainable investment 'objectives' - including emissions reduction objectives. (These may currently be referred to as 'impact' funds or aiming to deliver clear, specific positive outcomes.) These rules do not currently apply in the UK so product managers may leave this field blank.
Fund Management Company Information
About The Business
Finds fund / asset management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Find fund / asset management companies that actively encourage higher 'environmental, social and governance' and / or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Find fund / asset managers that consider responsible ownership and ESG to be a key differentiator for their business.
Find options run by managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies across all or most funds, products and services.
Find fund / asset management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Find fund / asset management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide).
This fund / asset management company invests in companies which have recently listed on a stock exchange (which is important as it can help grow new businesses).
Fund / asset management company has investments in bonds designed to meet sustainability requirements - however these assets may not be 'ringfenced' for this purpose. See website for details.
Fund management entity offers unstructured intermediary training on sustainable investment (ie for financial advisers and wealth managers)
Collaborations & Affiliations
Find fund / asset management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Fund management entity is a member of the Investment Association https://www.theia.org/
Resources
Find fund / asset management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Find a fund / asset management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Find fund / asset management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
Accreditations
Find fund / asset managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where managers are encouraged to behave like responsible, typically longer term 'company owners'.
Engagement Approach
Fund / asset manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Fund / asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Fund / asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
The fund / asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
Fund / asset manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
Fund / asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Fund / asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
Fund / asset manager is working with the assets they hold to help stamp out modern slavery - where direct or indirect company employees are exploited for business benefits.
Fund / asset managers have stewardship strategies in place that focus on improving governance standards across investee assets
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards
Climate & Net Zero Transition
Fund / asset management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
This fund / asset management company has set a date by which they plan to achieve net zero greenhouse gas / CO2e emissions.
Find fund / asset management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions.
Finds organisations / fund management companies that are in the process of working out how to make a ‘net zero commitment’ - meaning that when that is finalised they will have started the process of reducing their total greenhouse gas emissions to 'zero'.
See https://sciencebasedtargets.org/
Transparency
Find fund / asset management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Find fund / asset management companies that publish information about their sustainable and responsible investment strategies on their company website.
Find fund / asset management companies that will supply information about their sustainable and responsible investment activity on request.
Fund / asset management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
Sustainable, Responsible &/or ESG Policy:
The Investment Manager will seek to identify the universe of these companies based on three primary impact categories: life essentials, human empowerment and the environment. Within these categories, the Fund will aim to diversify across impact themes including, but not limited to, the following:
- Life essentials — affordable housing; clean water and sanitation; health; and sustainable agriculture and nutrition
- Human empowerment — digital divide; education and job training; financial inclusion; and safety and security
- Environment — alternative energy; resource efficiency; and resource stewardship
The Investment Manager relies on a bottom-up process for identifying and analyzing potential companies for investment. This process, among other sources, relies on internal research, industry and thematic research, field research, industry and thematic conferences and discussions, news media, company meetings, filings, financials, sustainability reports and sell-side or other third-party subscription research. In defining the opportunity set, the Investment Manager takes into account both quantitative and qualitative considerations to fulfil each of the three impact criteria:
- Material: Impact activity must be central to the investee company. To determine this, the Investment Manager evaluates a company’s business units, product lines and services. Primary considerations are (a) the importance of the social problem being addressed and the alignment with our impact themes and (b) the materiality of impact activities to a company’s overall activity (which needs to account for 50% or more of revenues).
- Additionality: The Investment Manager evaluates each company’s value proposition, the specific needs it addresses, competitor product and services, and the degree to which alternative solutions already exist.
- Measurable key performance indicators (KPIs): The impact case must be quantifiable.
The Investment Manager uses company reports and proprietary models, to develop individualized KPIs to understand the nature of the impact generated by a portfolio company on an annual basis.
After a company meets the criteria for inclusion in the proprietary impact universe, only the companies that the Investment Manager believes have the most attractive risk/return profile and diversification properties are selected for inclusion in the portfolio. To evaluate this, the Investment Manager focuses on fundamental considerations, including, but not limited to analyzing the quality of the company's assets, the company's industry structure, and management's allocation of capital.
The Investment Manager believes identifying investment opportunities which generate a positive impact requires bottom-up fundamental research. However, the Fund also uses screening to ensure certain investments are excluded, in addition to the Exclusion Policy, further details of which can be found in the section of the Prospectus entitled Exclusions. These include companies principally involved in the following industries: tobacco, firearms, defence, nuclear, coal, petroleum, adult entertainment, gambling and alcohol as these are companies the Investment Manager believes run counter to, or undermine, the Fund’s sustainable investment objective.
Process:
The first step in our investment process is understanding if the company is an impact company. Our approach is “pure-play”, which means we only invest in companies whose mission it is to address environmental or societal problems. All our investments are material to our 11 impact themes and show “additionality” through economic moats, and addressing unmet needs (underserved demographics). All have measurable impact KPIs, published in our annual Global Impact KPI matrix and the Global Impact Annual report.
Once a company meets the criteria for inclusion in our proprietary impact opportunity set only the companies that we believe have the most attractive return potential and diversification properties are selected for inclusion in the portfolio.
We focus the analysis on three specific areas:
- Understanding the quality of assets and competitors’ ability to replicate them - this is highly aligned with “Impact Additionality” where we assess whether a company’s offering is unique and not easily replicated by other agents. and competitors’ ability to replicate them.
- Industry structure, how is it changing and what is its growth profile? This ties very well with the structural growth of our impact themes, and companies that at times are disrupting the in cumbent and bring new technology or business models.
- Capital allocation – what is the company’s policy and discipline? This supports our ESG work and underpins the long-term investment horizon.
To compare the attractiveness of potential investments, we estimate each stock’s upside using a proprietary discounted cash flow framework and set price targets for each stock. Here we reflect a broader set of potential outcomes for each company. In addition to a “base case” scenario, we also examine the “downside” and “upside” scenarios and assign a price/value. This allows us to better distil the 2-3 key drivers of for each company’s investment thesis and, when something changes, we are able to quickly determine whether to add on perceived weakness or indeed trim or exit a name in the context of these outcomes/price targets.
ESG Integration into the investment process:
We incorporate material environmental, social, and corporate governance (ESG) criteria into the analysis of individual companies. In our view, companies with positive ESG factors have the potential to outperform the market. We have also found many of these businesses to have more stable growth trajectories by reducing material ESG risks and creating competitive advantages. The team consults with the ESG analysts for insight on material factors of differentiation between companies within regional and sector peer groups. Furthermore, ESG analysis supports our ability to identify global best practices, prepare for company engagement and collaborate on new research inputs. However, companies are not automatically screened out solely based on ESG concerns; rather, the team seeks to ensure that we are appropriately compensated for all investment risks, either economic, financial, or ESG related and that these ESG risks do not compromise the initial intended impact goal.
Given the specific objective (addressing social and environmental problems) in our Global Impact approach and thus the investee companies’ emphasis on addressing “” & “S “issues in their business models, we do not tend to find material issues there in terms of their own business practices.
In the investment process, we consider the “E” and/or the “S” in the step 2 – the impact analysis – given the focus on environmental and social solutions. While we are evaluating a company’s investment potential, we incorporate ESG analysis into our fundamental evaluation and research. We strongly believe that impact companies with strong or improving ESG metrics have the potential to outperform over the long term.
In terms of portfolio construction, our goal in portfolio construction is to ensure that our Global Impact strategy is well-diversified with stock selection being the primary driver of active risk. To this end, our construction framework focuses on balancing investment conviction and liquidity.
The Global Impact team considers material environmental, social, and corporate governance (ESG) criteria as one set of factors among many that should be weighed appropriately to inform investment decision making. Core to our ESG integration philosophy is the belief that material ESG issues are strategic business issues that could impact the long-term value and success of the company and its investment returns. Therefore, we explicitly incorporate ESG analysis into our fundamental evaluation, as we believe that impact companies with strong or improving ESG metrics have the potential to outperform over the long term. However, the first step is driven by our impact framework.
Ultimately, Portfolio Manager Jason Goins is responsible for all investment decisions, including investment policy and strategy, portfolio construction and security selection. The members of the ESG team serve as critical thought partners for the Global Impact team. So, while there are not formal, structured daily touch points, there is a consistent level of contact and discussion. Specifically, the Global Impact team regularly conducts engagements alongside the relevant member of the ESG team. The ESG team’s research and ratings are widely accessible to the Global Impact team, which can help inform the team’s engagement agenda.
The Global Impact team is also supported by the Firm’s “Impact Investment Steering Group”. Members include impact investors from equity and fixed income asset classes. Investment Directors and Specialists as well as representation from our ESG Team and Sustainable Investing Team. The focus of the “Impact Investment Steering Group” is as follows:
- Determine what qualifies as an impact investment (company or issuer). It will define scope, rules and policies for inclusion in the impact opportunity set, which will determine eligibility for inclusion in the Impact Equity and Impact Bond portfolios (Universe Management)
- Maintain the list of impact themes and identify new ones as they emerge (Theme Management)
- Articulate the investment case for impact themes and ensure that each theme has a compelling investment case (Investment Relevance)
- Set policies for calculation of Key Performance Indicators (KPIs) at the security, issuer and portfolio level (Impact Measurement)
- Set policies for engagement with companies and issuers held in the portfolios (Engagement)
- Keep members current on sustainability research, distribute relevant research more broadly to Wellington colleagues, and discuss the possibility of engaging in research (Research).
In addition, the Global Impact team is supported by the Impact Measurement and Management (IMM) team. IMM is the formalized practice of quantitatively assessing how much positive social, environmental and economic impact is being generated by an investment or portfolio.
We use Wellington’s proprietary and fundamental ESG research and engage with the wider ESG team where discussion of issues can unlock additional value and improvement.
Resources, Affiliations & Corporate Strategies:
As of 31 March 2024, the Sustainable Investment Research Team consists of 23 members, including 8 ESG Research Analysts who have dedicated sector coverage and 2 ESG Research Associates. We have also identified 3 members dedicated to Private research and 6 members wholly focused on climate research as a part of our continually evolving resources in sustainability research.
The ESG Team focuses on research, stewardship including engagement and proxy voting, and integration of ESG factors into portfolio managers’ and analysts’ processes. The ESG Team does not independently manage any sustainable investment approaches, but rather supports client portfolios across our investment platform globally.
SDR Labelling:
Not eligible to use label (out of scope)
Key Performance Indicators:
Of the companies that meet the above impact criteria, only those that the Investment Manager believes have the most attractive risk/return profile and diversification properties are selected for inclusion in the portfolio. To evaluate this, the Investment Manager focuses on analyzing the quality of the company’s assets, the company’s industry structure and the management’s allocation of capital.
All companies in the portfolio have an individual and measurable impact KPI using a logic model framework aligned with our Impact thesis (how and why a desired change is expected to happen in a particular context, in this case, our investments).
A key performance indicator (KPI) is a single or set of quantifiable milestones that measure a company’s progress towards a particular objective. In the case of social impact, it measures progress towards one or more social impact goals as identified and actively sought by the investor. Developing and tracking a well-defined KPI brings awareness to the core impact case of a company, encourages accountability, and provides a differentiated perspective from traditional fundamental analysis. The practice of KPI development is inherently subjective with KPIs often varying between companies and industries depending on the stage and nature of the impact that is taking place. As further described, we have honed our own unique approach and methodology to developing, tracking, reporting, and applying KPIs that best fit with the nature and spirit of our impact portfolio.
Depending on the business model, transparency, and a firm’s awareness of their impact, the available data will fall somewhere along the logic chain:
The ultimate goal is the have a key performance indicator that represents the firm’s impact. At times this is reported, and at times it requires calculations and assumptions using a mosaic of information
This framework presents a linear path of capital from investment through desired impact outcome: inputs (resources going into a project), activities (what are the activities conducted by the company), outputs (what is produced through those activities), and outcomes/impact (changes or benefit that result from the activities). We built our taxonomy based on the IRIS taxonomy, which comes from the GIIN.
We continue to apply the key performance indicator (KPI) logic chain that we have used since launching our impact approach. The logic chain has worked especially well in showing security or company-level KPIs, which can then be aggregated at the theme and/or portfolio level.
We have also augmented this framework with tools that better demonstrate our progress and how we analyze it, highlight ESG risks and potential unintended consequences, and provide more detail regarding our engagements. This additional context, which is partially informed by the Impact Management Project Framework, is representative of our robust approach to understanding both the fundamental and impact investment case for each portfolio investment.
We use company reports and proprietary models based on conservative assumptions to develop initial key performance indicators (KPIs) to understand the nature of the impact generated by the company, its alignment with our themes, and progress over time.
We provide annual portfolio-level KPI reporting to investors in our Global Impact Fund where we quantify the key impact outcomes achieved for every holding in the portfolio.
In addition, in order to help our clients understand the impact their investments are having we publish an annual report that includes commentary discussing our investments and impact achieved over the prior year.
We seek to understand some of the world’s social and environmental problems and the opportunity to identify companies that for are uniquely addressing these needs. To do so, we conduct proprietary research and partner with the Wellington Management’s wide range of experts to understand the evolving challenges and investable solutions facing the world.
These impact themes were developed prior to the UN SDGs. While the portfolio has a high degree of alignment with the UN SDGs, we do not manage the portfolio to any targeted level of alignment regarding the UN SDGs.
For each company and issuer in our portfolios, we tag the goals we believe they align with, and, if appropriate, to any of the 169 underlying targets outlined by the UN. Not all companies or issuers can be tagged to an underlying target because the targets do not capture all impact categories, we consider critical, such as bridging the digital divide or providing cybersecurity products and services. Without exception, however, the companies and issuers we invest in offer what we consider to be much-needed solutions to many of the major challenges identified in the SDGs. Wellington is proud to continue supporting — and working toward — the UN SDGs, the world’s blueprint for securing a sustainable future for generations to come.
Voting Record
Disclaimer
Sustainability-related investment disclosure information
This financial product has a sustainable investment objective. Sustainability-related disclosure information is provided below.
Sustainable investment objective?
Yes - The portfolio will seek to understand some of the world’s social and environmental problems and to identify and invest in companies that it believes are addressing these needs in a differentiated way through their core products and services. Through the portfolio’s investments, the Investment Manager seeks to improve access to, and the quality of, basic life essentials, reduce inequality and mitigate the effects of climate change.
Does the portfolio apply binding Environmental (E) or Social (S) characteristics? Sustainable Investments
The portfolio will invest only in companies whose products or services meet the Investment Manager’s impact criteria. The universe of companies is based on three primary impact categories: life essentials, human empowerment and the environment. Companies will be assessed the following:
- Materiality: Impact activity must be central to the company. To determine this, the Investment Manager evaluates a company’s business units, product lines and services and anticipates the future trajectory of the business. Primary considerations are (a) the importance of the social problem being addressed and the alignment with our impact themes and (b) the materiality of impact activities to a company’s overall activity (which needs to account for more than 50% of revenues).
- Additionality: The Investment Manager evaluates each company’s value proposition, the specific needs it addresses, competitors’ products and services and the degree to which alternative solutions already exist.
- Measurable key performance indicators (KPIs): The impact case must be quantifiable. The Investment Manager uses company reports and proprietary models to develop individualised KPIs to understand the nature of the impact generated by the company, its alignment with the portfolio’s impact themes and its progress over time.
- Environmental and Social practices
Companies with involvement in the following industries are excluded from the portfolio: tobacco, firearms, defense, nuclear, coal, petroleum, alcohol, adult entertainment and gambling. The Investment Manager believes these companies’ activities run counter to or undermine the portfolio’s sustainable investment objective.
Does the portfolio apply other exclusions?
Yes - The portfolio applies the Wellington Management exclusions policy which covers:
- Manufacture of nuclear weapons
- Controversial weapons
- Thermal coal extraction or thermal coal-based power generation
- Production and generation of oil sands (also known as tar sands)
- Production, distribution, retail, or supply of tobacco related products
Is there a framework for assessing governance?
Yes - The Investment Manager evaluates the governance metrics of investee companies in accordance with Wellington Management Group’s Global Governance Assessment Policy, more information can be found at the ‘further information’ links below.
Does the portfolio consider Sustainability Risks?
Yes - The assessment of sustainability risks through the analysis of ESG factors is part of the portfolio’s investment process as, in the Investment Manager’s view, sustainability risks can materially affect an issuer’s financial performance and competitiveness.
Further information is available at www.wellington.com/en-us/institutional/legal/sfdr
Disclaimer
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| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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Wellington Global Impact Fund |
Sustainable Style | Not eligible to use label (out of scope) | SICAV/Overseas | Global | Equity | 08/12/2016 | Aug 2024 | |
ObjectivesFund manager declined to supply an update - fund last updated August 24
Sustainable Investment Objective The Global Impact Fund will seek to understand some of the world’s social and environmental problems and to identify and invest in companies that it believes are addressing these needs in a differentiated way through their core products and services. Through the portfolio’s investments, the Investment Manager seeks to improve access to, and the quality of, basic life essentials, reduce inequality and mitigate the effects of climate change. The Fund expects to maintain a minimum of 90% of its net assets in companies which meet the above criteria and which are assessed to be Sustainable Investments. Sustainable Investments may contribute to either environmental or social objectives. Although the proportion of Sustainable Investments with environmental or social objectives may vary over time, the Investment Manager will maintain at least 10% in Sustainable Investments with an environmental objective and at least 20% in Sustainable Investments with a social objective. |
Fund/Portfolio Size: £611.53m (as at: 31/03/2026) ISIN: IE00BF5H4B91, IE00BYVQ3R21, IE00BN7J4C01, IE00BYX0WN13, IE00BD6PGZ66, IE00BGPNQX08, IE00BFZ58Q61, IE00BFZ58P54, IE00BD72Z263, IE00BLCH1Y61, IE00BDB47662 Contact Us: #ClientGroupInvestorServicesEMEA@wellington.com |
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Sustainable, Responsible &/or ESG OverviewThe Global Impact approach seeks to generate attractive total returns by investing in innovative companies whose core products and services addresses some of the world’s major social and environmental challenges. As a long-term objective, the investment team seeks to outperform the broad equity markets as this often represents the funding source of an allocation to Global Impact. We believe that…
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Primary fund last amended: Aug 2024 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Has policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See individual entry information.
Sustainability focus
Has a significant focus on sustainability issues
Encourage more sustainable practices through stewardship
Aim to encourage higher sustainability standards through responsible ownership / stewardship / engagement / voting activity
UN Global Compact linked exclusion policy
Use the UN Global Compact to inform or help direct where they can or cannot invest. Will typically not invest in companies with significant breaches (low standards) - strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Transition focus
Aim to support the shift to a sustainable future. See eg https://www.transitionpathwayinitiative.org/
Report against sustainability objectives
Publicly report performance against named sustainability objectives
Circular economy theme
Has a theme or investment strand focused on the shift to a circular economy - where products are reused and recycled not incinerated or dumped. See eg https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview Environmental - General
Resource efficiency policy or theme
Has a policy or theme that relates to managing natural resources more efficiently. Strategies vary. See individual entry information.
Favours cleaner, greener companies
Aims to invest in companies with strong or market leading environmental policies and practices. Strategies vary. See individual entry information for more detail. Climate Change & Energy
Coal, oil & / or gas majors excluded
Avoid investment in major coal, oil and/or gas (extraction) companies. Strategies vary.
Fracking & tar sands excluded
Avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary.
Fossil fuel reserves exclusion
Avoid investing in companies / assets with coal, oil and gas reserves. See individual entry information for further details.
Clean / renewable energy theme or focus
Invest (or may invest) in clean / renewable energy companies and other assets. The proportion directly or indirectly invested in renewable energy may vary over time.
Encourage transition to low carbon through stewardship activity
Encourage the transition to lower carbon activities through asset selection and / or responsible ownership activity.
Energy efficiency theme
Has an energy efficiency theme - typically meaning that the manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invests in clean energy / renewables
Invest in renewable energy companies and / or companies where renewable energy is a significant part of their business. Strategies vary.
Nuclear exclusion policy
Has a policy which describes the avoidance or limited investment in the nuclear industry. Strategies vary.
Fossil fuel exploration exclusion - direct involvement
Excludes companies and other assets with direct involvement in fossil fuel exploration (eg coal, oil and gas companies) Social / Employment
Health & wellbeing policies or theme
Has policies or themes that set out their approach to health and wellbeing issues, typically aims to invest in companies with high standards - or encourage high standards. Ethical Values Led Exclusions
Ethical policies
Has policies that set out their position on ethical or 'personal values' based issues. Strategies vary.
Tobacco & related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Tobacco & related products - avoid where revenue > 5%
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of tobacco products including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Avoids companies that manufacture weapons intended specifically for military use. Strategies vary - may or may not include non-strategic military products.
Civilian firearms production exclusion
Has a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Alcohol production excluded
Avoids companies that produce alcohol. Strategies vary; some may allow a small proportion of revenue to come from this area.
Gambling avoidance policy
Avoids companies with significant involvement in the gambling industry. Some may allow a small proportion of revenues to come from this area. Meeting Peoples' Basic Needs
Water / sanitation policy or theme
Have policies or themes that set out the position on investment in the water sector and/or sanitation. Strategies vary.
Responsible food production or agriculture theme
Has a responsible food production or agriculture theme or strand of investment. May have a single or many themes.
Healthcare / medical theme
Healthcare and or medical theme or area of investment - may have a single or many themes Gilts & Sovereigns
Gilts / government bonds - exclude all
Does not invest in, or excludes, gilts and/or government bonds. Banking & Financials
Invests in banks
Can include banks as part of their holdings / portfolio.
Invests in insurers
May invest in insurance companies. Governance & Management
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Anti-bribery & corruption policy
Has policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination.
Encourage board diversity e.g. gender
Encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Encourage higher ESG standards through stewardship activity
Aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Product / Service Governance
ESG integration strategy
Find fund / asset managers that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature. Asset Size
Invests in small, mid & large cap companies / assets
Invests in a combination of small, medium and larger (potentially multinational) companies / assets. Targeted Positive Investments
Invests >25% in environmental / social solutions companies
Invests >25% of their capital in companies where a major part of their business is focused on helping to address environmental or social challenges.
Invests >50% of fund in environmental / social solutions companies
Invests >50% of their capital in companies where a major part of their business is focused on helping to address environmental or social challenges. Impact Methodologies
Aims to generate positive impacts (or 'outcomes')
Has policies that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary.
Measures positive impacts
Aims to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Investments that aim to deliver positive impacts and measure those impacts may be referred to as 'Impact' - although impact measurement is not restricted to Impact investments. Strategies vary.
Described as an ‘impact investment’
Investments which are specifically marketed as ‘Impact investments' and work to deliver both financial performance and specific, measurable positive, real world social and/or environmental benefits. Strategies vary.
Positive environmental impact theme
Specifically sets out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Positive social impact theme
Specifically states that they aim to deliver positive social (i.e. people related) impacts and/or outcomes.
Invests in environmental solutions companies
Directs investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Invests in social solutions companies
Invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Invests in sustainability / ESG disruptors
Specifically sets out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
Aim to deliver positive impacts through engagement
Aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
Over 50% in assets providing environmental or social ‘solutions’
Invests more than 50% of capital in assets which are regarded as being significantly focused on providing solutions to environmental or social challenges. Strategies vary.
Publish ‘Theory of Change’ explanation
Policy explains the ways in which the manager believes things need to change in order to deliver a more sustainable future, which they are working to help achieve. How The Fund/Portfolio Works
Positive selection bias
Focuses on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Strictly screened ethical investment
Has principle approach to apply positive or negative ethical, social and / or environmental screens. Strictly screened investments are likely to exclude more companies than other related options. Strategies vary.
Significant harm exclusion
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Assets mapped to SDGs
Invests in assets which can be 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Combines norms based exclusions with other SRI criteria
Investment selection process uses internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Combines ESG strategy with other SRI criteria
Invests in assets which have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) together with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
SRI / ESG / Ethical policies explained on website
Publish explanations of their ethical, social and/or environmental policies online (i.e. investment decision making strategies/ buy/sell &/or asset management strategies).
Do not use stock / securities lending
Does not use stock lending for performance or risk purposes. Unscreened Assets & Cash
Assets typically aligned to sustainability objectives 70 - 79%
Holds between 70-79% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives 80 – 89%
Holds between 80-89% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives > 90%
Holds at least 90% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets. Intended Clients & Product Options
Intended for clients interested in sustainability
Designed to meet the needs of individual investors with an interest in sustainability issues.
Intended for clients who want to have a positive impact
Designed to meet the needs of individual investors with an interest in ‘Impact investment’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies regarded as beneficial to people and / or the planet. Strategies vary.
Available via an ISA (OEIC only)
Available via a tax efficient ISA product wrapper.
Portfolio SRI / ESG options available
Only applicable for DFM’s & portfolio providers. Finds those that offer an SRI / ESG portfolio option
Multiple SRI / ESG portfolio options available
Only applicable for DFM’s & portfolio providers. Find service providers who offer multiple SRI / ESG portfolio options Labels & Accreditations
SFDR Article 9 fund / product (EU)
Find options classified under Article 9 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 9 of the SFDR applies to financial products that have sustainable investment 'objectives' - including emissions reduction objectives. (These may currently be referred to as 'impact' funds or aiming to deliver clear, specific positive outcomes.) These rules do not currently apply in the UK so product managers may leave this field blank. Fund Management Company InformationAbout The Business
Responsible ownership / stewardship policy or strategy (AFM companywide)
Finds fund / asset management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
ESG / SRI engagement (AFM companywide)
Find fund / asset management companies that actively encourage higher 'environmental, social and governance' and / or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Responsible ownership / ESG a key differentiator (AFM companywide)
Find fund / asset managers that consider responsible ownership and ESG to be a key differentiator for their business.
Responsible ownership policy for non SRI / sustainable options (AFM companywide)
Find options run by managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies across all or most funds, products and services.
Integrates ESG factors into all / most research (AFM companywide)
Find fund / asset management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM companywide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Diversity, equality & inclusion engagement policy (AFM companywide)
Find fund / asset management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide).
Invests in newly listed companies (AFM companywide)
This fund / asset management company invests in companies which have recently listed on a stock exchange (which is important as it can help grow new businesses).
Invests in new sustainability linked bond issuances (AFM companywide)
Fund / asset management company has investments in bonds designed to meet sustainability requirements - however these assets may not be 'ringfenced' for this purpose. See website for details.
Offer unstructured intermediary sustainable investment training
Fund management entity offers unstructured intermediary training on sustainable investment (ie for financial advisers and wealth managers) Collaborations & Affiliations
PRI signatory
Find fund / asset management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Investment Association (IA) member
Fund management entity is a member of the Investment Association https://www.theia.org/ Resources
In-house responsible ownership / voting expertise
Find fund / asset management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Employ specialist ESG / SRI / sustainability researchers
Find a fund / asset management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Use specialist ESG / SRI / sustainability research companies
Find fund / asset management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors. Accreditations
UK Stewardship Code signatory (AFM companywide)
Find fund / asset managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where managers are encouraged to behave like responsible, typically longer term 'company owners'. Engagement Approach
Engaging on climate change issues
Fund / asset manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Engaging with fossil fuel companies on climate change
Fund / asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Engaging to reduce plastics pollution / waste
Fund / asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Engaging on biodiversity / nature issues
The fund / asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
Engaging on human rights issues
Fund / asset manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
Engaging on labour / employment issues
Fund / asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Engaging on diversity, equality & / or inclusion issues
Fund / asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
Engaging to stop modern slavery
Fund / asset manager is working with the assets they hold to help stamp out modern slavery - where direct or indirect company employees are exploited for business benefits.
Engaging on governance issues
Fund / asset managers have stewardship strategies in place that focus on improving governance standards across investee assets
Engaging on responsible supply chain issues
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards Climate & Net Zero Transition
Net Zero commitment (AFM companywide)
Fund / asset management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
Net Zero - have set a Net Zero target date (AFM companywide)
This fund / asset management company has set a date by which they plan to achieve net zero greenhouse gas / CO2e emissions.
In-house carbon / GHG reduction policy (AFM companywide)
Find fund / asset management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions.
Working towards a ‘Net Zero’ commitment (AFM companywide)
Finds organisations / fund management companies that are in the process of working out how to make a ‘net zero commitment’ - meaning that when that is finalised they will have started the process of reducing their total greenhouse gas emissions to 'zero'.
Committed to SBTi / Science Based Targets Initiative
See https://sciencebasedtargets.org/ Transparency
Publish responsible ownership / stewardship report (AFM companywide)
Find fund / asset management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Full stewardship / responsible ownership policy information on company website
Find fund / asset management companies that publish information about their sustainable and responsible investment strategies on their company website.
Full stewardship / responsible ownership policy information available on request
Find fund / asset management companies that will supply information about their sustainable and responsible investment activity on request.
Publish full voting record (AFM companywide)
Fund / asset management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards. Sustainable, Responsible &/or ESG Policy:The Investment Manager will seek to identify the universe of these companies based on three primary impact categories: life essentials, human empowerment and the environment. Within these categories, the Fund will aim to diversify across impact themes including, but not limited to, the following:
The Investment Manager relies on a bottom-up process for identifying and analyzing potential companies for investment. This process, among other sources, relies on internal research, industry and thematic research, field research, industry and thematic conferences and discussions, news media, company meetings, filings, financials, sustainability reports and sell-side or other third-party subscription research. In defining the opportunity set, the Investment Manager takes into account both quantitative and qualitative considerations to fulfil each of the three impact criteria:
The Investment Manager uses company reports and proprietary models, to develop individualized KPIs to understand the nature of the impact generated by a portfolio company on an annual basis. After a company meets the criteria for inclusion in the proprietary impact universe, only the companies that the Investment Manager believes have the most attractive risk/return profile and diversification properties are selected for inclusion in the portfolio. To evaluate this, the Investment Manager focuses on fundamental considerations, including, but not limited to analyzing the quality of the company's assets, the company's industry structure, and management's allocation of capital. The Investment Manager believes identifying investment opportunities which generate a positive impact requires bottom-up fundamental research. However, the Fund also uses screening to ensure certain investments are excluded, in addition to the Exclusion Policy, further details of which can be found in the section of the Prospectus entitled Exclusions. These include companies principally involved in the following industries: tobacco, firearms, defence, nuclear, coal, petroleum, adult entertainment, gambling and alcohol as these are companies the Investment Manager believes run counter to, or undermine, the Fund’s sustainable investment objective. Process:The first step in our investment process is understanding if the company is an impact company. Our approach is “pure-play”, which means we only invest in companies whose mission it is to address environmental or societal problems. All our investments are material to our 11 impact themes and show “additionality” through economic moats, and addressing unmet needs (underserved demographics). All have measurable impact KPIs, published in our annual Global Impact KPI matrix and the Global Impact Annual report. Once a company meets the criteria for inclusion in our proprietary impact opportunity set only the companies that we believe have the most attractive return potential and diversification properties are selected for inclusion in the portfolio. We focus the analysis on three specific areas:
To compare the attractiveness of potential investments, we estimate each stock’s upside using a proprietary discounted cash flow framework and set price targets for each stock. Here we reflect a broader set of potential outcomes for each company. In addition to a “base case” scenario, we also examine the “downside” and “upside” scenarios and assign a price/value. This allows us to better distil the 2-3 key drivers of for each company’s investment thesis and, when something changes, we are able to quickly determine whether to add on perceived weakness or indeed trim or exit a name in the context of these outcomes/price targets. ESG Integration into the investment process: We incorporate material environmental, social, and corporate governance (ESG) criteria into the analysis of individual companies. In our view, companies with positive ESG factors have the potential to outperform the market. We have also found many of these businesses to have more stable growth trajectories by reducing material ESG risks and creating competitive advantages. The team consults with the ESG analysts for insight on material factors of differentiation between companies within regional and sector peer groups. Furthermore, ESG analysis supports our ability to identify global best practices, prepare for company engagement and collaborate on new research inputs. However, companies are not automatically screened out solely based on ESG concerns; rather, the team seeks to ensure that we are appropriately compensated for all investment risks, either economic, financial, or ESG related and that these ESG risks do not compromise the initial intended impact goal. Given the specific objective (addressing social and environmental problems) in our Global Impact approach and thus the investee companies’ emphasis on addressing “” & “S “issues in their business models, we do not tend to find material issues there in terms of their own business practices. In the investment process, we consider the “E” and/or the “S” in the step 2 – the impact analysis – given the focus on environmental and social solutions. While we are evaluating a company’s investment potential, we incorporate ESG analysis into our fundamental evaluation and research. We strongly believe that impact companies with strong or improving ESG metrics have the potential to outperform over the long term. In terms of portfolio construction, our goal in portfolio construction is to ensure that our Global Impact strategy is well-diversified with stock selection being the primary driver of active risk. To this end, our construction framework focuses on balancing investment conviction and liquidity. The Global Impact team considers material environmental, social, and corporate governance (ESG) criteria as one set of factors among many that should be weighed appropriately to inform investment decision making. Core to our ESG integration philosophy is the belief that material ESG issues are strategic business issues that could impact the long-term value and success of the company and its investment returns. Therefore, we explicitly incorporate ESG analysis into our fundamental evaluation, as we believe that impact companies with strong or improving ESG metrics have the potential to outperform over the long term. However, the first step is driven by our impact framework. Ultimately, Portfolio Manager Jason Goins is responsible for all investment decisions, including investment policy and strategy, portfolio construction and security selection. The members of the ESG team serve as critical thought partners for the Global Impact team. So, while there are not formal, structured daily touch points, there is a consistent level of contact and discussion. Specifically, the Global Impact team regularly conducts engagements alongside the relevant member of the ESG team. The ESG team’s research and ratings are widely accessible to the Global Impact team, which can help inform the team’s engagement agenda. The Global Impact team is also supported by the Firm’s “Impact Investment Steering Group”. Members include impact investors from equity and fixed income asset classes. Investment Directors and Specialists as well as representation from our ESG Team and Sustainable Investing Team. The focus of the “Impact Investment Steering Group” is as follows:
In addition, the Global Impact team is supported by the Impact Measurement and Management (IMM) team. IMM is the formalized practice of quantitatively assessing how much positive social, environmental and economic impact is being generated by an investment or portfolio. We use Wellington’s proprietary and fundamental ESG research and engage with the wider ESG team where discussion of issues can unlock additional value and improvement. Resources, Affiliations & Corporate Strategies:As of 31 March 2024, the Sustainable Investment Research Team consists of 23 members, including 8 ESG Research Analysts who have dedicated sector coverage and 2 ESG Research Associates. We have also identified 3 members dedicated to Private research and 6 members wholly focused on climate research as a part of our continually evolving resources in sustainability research. The ESG Team focuses on research, stewardship including engagement and proxy voting, and integration of ESG factors into portfolio managers’ and analysts’ processes. The ESG Team does not independently manage any sustainable investment approaches, but rather supports client portfolios across our investment platform globally. SDR Labelling:Not eligible to use label (out of scope) Key Performance Indicators:
Of the companies that meet the above impact criteria, only those that the Investment Manager believes have the most attractive risk/return profile and diversification properties are selected for inclusion in the portfolio. To evaluate this, the Investment Manager focuses on analyzing the quality of the company’s assets, the company’s industry structure and the management’s allocation of capital. All companies in the portfolio have an individual and measurable impact KPI using a logic model framework aligned with our Impact thesis (how and why a desired change is expected to happen in a particular context, in this case, our investments). A key performance indicator (KPI) is a single or set of quantifiable milestones that measure a company’s progress towards a particular objective. In the case of social impact, it measures progress towards one or more social impact goals as identified and actively sought by the investor. Developing and tracking a well-defined KPI brings awareness to the core impact case of a company, encourages accountability, and provides a differentiated perspective from traditional fundamental analysis. The practice of KPI development is inherently subjective with KPIs often varying between companies and industries depending on the stage and nature of the impact that is taking place. As further described, we have honed our own unique approach and methodology to developing, tracking, reporting, and applying KPIs that best fit with the nature and spirit of our impact portfolio. Depending on the business model, transparency, and a firm’s awareness of their impact, the available data will fall somewhere along the logic chain:
The ultimate goal is the have a key performance indicator that represents the firm’s impact. At times this is reported, and at times it requires calculations and assumptions using a mosaic of information This framework presents a linear path of capital from investment through desired impact outcome: inputs (resources going into a project), activities (what are the activities conducted by the company), outputs (what is produced through those activities), and outcomes/impact (changes or benefit that result from the activities). We built our taxonomy based on the IRIS taxonomy, which comes from the GIIN. We continue to apply the key performance indicator (KPI) logic chain that we have used since launching our impact approach. The logic chain has worked especially well in showing security or company-level KPIs, which can then be aggregated at the theme and/or portfolio level.
We have also augmented this framework with tools that better demonstrate our progress and how we analyze it, highlight ESG risks and potential unintended consequences, and provide more detail regarding our engagements. This additional context, which is partially informed by the Impact Management Project Framework, is representative of our robust approach to understanding both the fundamental and impact investment case for each portfolio investment.
We use company reports and proprietary models based on conservative assumptions to develop initial key performance indicators (KPIs) to understand the nature of the impact generated by the company, its alignment with our themes, and progress over time. We provide annual portfolio-level KPI reporting to investors in our Global Impact Fund where we quantify the key impact outcomes achieved for every holding in the portfolio.
In addition, in order to help our clients understand the impact their investments are having we publish an annual report that includes commentary discussing our investments and impact achieved over the prior year.
We seek to understand some of the world’s social and environmental problems and the opportunity to identify companies that for are uniquely addressing these needs. To do so, we conduct proprietary research and partner with the Wellington Management’s wide range of experts to understand the evolving challenges and investable solutions facing the world.
These impact themes were developed prior to the UN SDGs. While the portfolio has a high degree of alignment with the UN SDGs, we do not manage the portfolio to any targeted level of alignment regarding the UN SDGs.
For each company and issuer in our portfolios, we tag the goals we believe they align with, and, if appropriate, to any of the 169 underlying targets outlined by the UN. Not all companies or issuers can be tagged to an underlying target because the targets do not capture all impact categories, we consider critical, such as bridging the digital divide or providing cybersecurity products and services. Without exception, however, the companies and issuers we invest in offer what we consider to be much-needed solutions to many of the major challenges identified in the SDGs. Wellington is proud to continue supporting — and working toward — the UN SDGs, the world’s blueprint for securing a sustainable future for generations to come. Voting RecordDisclaimerSustainability-related investment disclosure information This financial product has a sustainable investment objective. Sustainability-related disclosure information is provided below. Sustainable investment objective? Yes - The portfolio will seek to understand some of the world’s social and environmental problems and to identify and invest in companies that it believes are addressing these needs in a differentiated way through their core products and services. Through the portfolio’s investments, the Investment Manager seeks to improve access to, and the quality of, basic life essentials, reduce inequality and mitigate the effects of climate change. The portfolio will invest only in companies whose products or services meet the Investment Manager’s impact criteria. The universe of companies is based on three primary impact categories: life essentials, human empowerment and the environment. Companies will be assessed the following:
Companies with involvement in the following industries are excluded from the portfolio: tobacco, firearms, defense, nuclear, coal, petroleum, alcohol, adult entertainment and gambling. The Investment Manager believes these companies’ activities run counter to or undermine the portfolio’s sustainable investment objective. Yes - The portfolio applies the Wellington Management exclusions policy which covers:
Yes - The Investment Manager evaluates the governance metrics of investee companies in accordance with Wellington Management Group’s Global Governance Assessment Policy, more information can be found at the ‘further information’ links below. Yes - The assessment of sustainability risks through the analysis of ESG factors is part of the portfolio’s investment process as, in the Investment Manager’s view, sustainability risks can materially affect an issuer’s financial performance and competitiveness. Disclaimer This material has been prepared exclusively for use with professional, accredited or institutional investors, wholesale clients and non-retail investors for general information purposes only and does not take into account the investment objectives, financial situation or needs of any particular person. By accepting this material, you acknowledge and agree that this material is provided for your use only and that you will not distribute or otherwise make this material available to any person. This material and its contents may not be reproduced or distributed, in whole or in part, without the express written consent of Wellington Management. This document is intended for marketing purposes only. It is not an offer to anyone, or a solicitation by anyone, to subscribe for units or shares of any Wellington Management Fund (“Fund”). Nothing in this document should be interpreted as advice, nor is it a recommendation to buy or sell securities. Investment in the Fund may not be suitable for all investors. Any views expressed in this document are those of the author at the time of writing and are subject to change without notice. Fund shares/ units are made available only in jurisdictions where such offer or solicitation is lawful. The Fund only accepts professional clients or investment through financial intermediaries. Please refer to the Fund offering documents for further risk factors, pre-investment disclosures, the latest annual report (and semi-annual report), and for UCITS Funds, the latest Key Investor Information Document (KIID) or Key Information Document (KID) before investing. For each country where UCITS Funds are registered for sale, the prospectus and summary of investor rights in English, and the KIID / KID in English and an official language, are available at www.wellington.com/KIIDs. For share/unit classes registered in Switzerland, Fund offering documents in English can be obtained from the local Representative and Paying Agent — BNP Paribas Securities Services, Selnaustrasse 16, 8002 Zurich, Switzerland. Wellington Management Funds (Luxembourg) and Wellington Management Funds (Luxembourg) III SICAV are authorised and regulated by the Commission de Surveillance du Secteur Financier and Wellington Management Funds (Ireland) plc is authorized and regulated by the Central Bank of Ireland. The Fund may decide to terminate marketing arrangements for shares/units in an EU Member State by giving 30 working days’ notice.
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