Jupiter Ecology Inc (OEIC/Unit Trust)
SRI / Ethical Overview
The objective of the Fund is to achieve long-term capital appreciation together with a growing income consistent with a policy of protecting the environment.
The Fund's investment policy is to invest worldwide in companies which demonstrate a positive commitment to the long-term protection of the environment.
SRI / themed / ethical assets under management – overview
- Fund Size (GBP): £573.6million at 30 June 2018
- Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds: £928m at 31 March 2018
- Total assets under management: £928m at 31 March 2018
SRI Policies (Primary strategy in bold)
- Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
- Limits exposure to carbon intensive industries Find environmental, sustainable investment, ethical fund and other options that aim to significantly reduce or limit exposure to carbon intensive industries (ie sectors which are major contributors to climate change). Funds vary - strategies may involve excluding sectors such as coal, oil & gas, mining or airlines - or may indicate a 'best in sector' approach is taken. See fund literature for details.
- Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
- Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.
- Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.
- Governance policy Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices.
- Animal welfare policy Find ethical fund options that have policies that require specific animal welfare standards to be adopted by investee companies in order for them to be considered for inclusion within the fund.
- Nuclear exclusion policy Find ethical funds (and other options) that have a published policy that sets out the fund's position on avoiding or limiting exposure to nuclear power. See fund literature for details of their policy.
- Animal testing exclusion policy Find ethical investment options that avoid companies that are involved in testing their products on animals. Ethical fund strategies vary - some exclude all companies that test on animals, others allow companies that test for medical purposes or where required by law. Read fund details for fund specific information.
- Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
- Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
- Coal, oil &/or gas majors excluded Find sustainable investment and ethical fund options that avoid significant involvement in coal, oil and/or gas producing companies. Funds vary. See individual fund literature to confirm details.
- Climate change / GHG policy Find sustainable investment and ethical fund options that pay significant attention to climate change related issues such as greenhouse gas/carbon emissions. Strategies vary, see fund literature for individual fund information.
- Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.
- Alcohol production excluded This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
- Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
- Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.
- Human rights Find funds that consider human rights practices when approving companies for investment. Such funds will require decent standards of human rights to be demonstrated - which typically means adherence to international norms as a minimum standard.
- Deforestation / palm oil policy Find funds that have policies in place that ensure they do not invest in companies that are significantly involved in deforestation, this typically relates to palm oil plantations.
- Water / sanitation policy Find funds that have policies that focus on the the water industry and/or sanitation.
- Positive social impact theme Find funds that specifically state that they aim to deliver positive social (ie people related) impacts and/or outcomes
- Responsible supply chain policy or theme Find funds that have policies or a themed that considers the responsible management of supply chain related issues (these may relate to employment, product sourcing, sustainability or other issues)
- Positive environmental impact theme Find funds that specifically set out to help deliver positive environmental impacts, benefits or outcomes
- Positive selection bias Find funds where their main 'ethical approach' is to invest in companies that are considered to be positive/good or useful to people and/or the environment. The fund may also have negative avoidance criteria - see fund details to read more about fund strategies.
- Eurosif transparency Find funds that meet the standards of the EUROSIF transparency Code. This means that they are a leading fund in terms of openness and transparency, publishing - for example - extensive information about where they invest and how they deal with companies.
- Sustainability themed Find funds where there is a significant emphasis on sustainability issues either as its primary strategy or as a core strategy that compliments other criteria. (This may apply to a number of different SRI Styles). Such funds will consider environmental and social issues when making stock selection decisions. Read fund literature for further information.
- Favours cleaner, greener companies Find funds that aim to nvest in companies with strong environmental policies and practices. This may mean it invests in smaller companies offering market leading environmental services or products and/or larger companies that are working towards the improved management of their negative impacts. Read fund literature for further information.
- Favours companies with strong social policies Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
- Strictly screened ethical fund Find funds that have a high level of negative ethical avoidance. These funds are likely to exclude more companies than other ethical (and SRI) fund options. Read fund literature for further information.
- Aims to generate positive impacts Find funds that aim to help deliver positive social or environmental impacts or outcomes through their investment decisions - which typically involves holding companies that are viewed as being necessary or beneficial. Strategies and approaches vary. A small number of funds have recently started to measure outcomes (see 'Measures Impacts' in the Policy filter). This is a new area - so most funds do not do this yet. See fund literature for further information.
- Available via an ISA Find funds that are available via a tax efficient ISA product wrapper
- Clean energy themed Find funds that invest in clean technology / clean energy companies. See fund information for further details.
- Over 50% small/mid cap Find funds where more than half of the funds' assets are invested in smaller or medium sized companies (ie below around £5 -10 billion).
- ESG integration strategy Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. (These typically relate to improved risk management.)
- Measures positive impacts Find funds that measure the positive effect of their investment decision making on society and/or the environment. (This may involve eg carbon saved or jobs supported.) Managers aim to quantify the benefits they deliver (relative to other strategies or other benchmarks) to ensure they are delivering positive benefiting. This is a new and evolving area. See fund literature for information
- ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
- Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
- Integrates ESG factors into all/most fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
- Vote all* shares at AGMs/EGMs This fund manager votes or aims to vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' - where fund managers consider - and express their views on - the key business issues effecting the companies they part own. (*Allowance is made for exceptional situations such as when shares are in the process of being sold.)
- In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
- Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
- UK Stewardship Code signatory Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave as responsible 'company owners'.
- Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
- Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
- Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
- PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.
- UKSIF member The fund management company is a member of UKSIF - the UK Sustainable Investment and Finance association
- Climate Action 100+ or IIGCC member Involved in collaborative institutional investor initiatives that are encouraging companies to address climate change (ie reduce carbon emissions)
- Encourage board diversity eg gender Fund managers encourage the companies they invest in to have more diverse board structures (eg more women on boards)
- Encourage carbon / GHG reduction The fund management company is working with the companies it invests in to encourage reductions of carbon dioxide and other greenhouse gas emissions.
- Employ specialist ESG/SRI/sustainability researchers The fund management company directly employs specialist ESG/SRI/sustainability researchers or analysts
- Use specialist ESG/SRI/sustainability research companies The company makes use of expert external research
- In house carbon/GHG reduction policy The fund management company is working to reduce its own carbon/greenhouse gas emissions.
- Specialist SRI / positive impact fund management company Find fund management companies that specialise in - or focus entirely on - delivering positive impacts or SRI related fund management options
SRI / Ethical Policy
The portfolio has a thematic global growth bias. It typically invests in businesses which provide an environmental solution. Particular areas of focus include environmental infrastructure, resource efficiency and demographics.
1. Infrastructure: companies which derive revenue from the ownership, provision of assets, development and maintenance of infrastructure. The investment focus is on environmental resources, low carbon solutions, transportation, pollution abatement and waste management.
There has been a marked increase in global infrastructure spend in recent years as emerging market economies look to support rapid growth and mature economies seek to modernise. Patterns in both emerging and developed markets have trended towards infrastructure of lower environmental impact (for example: less pollution, alternative energy sources etc.) in recognition of its longer term economic benefits. This is creating opportunities for businesses involved in renewable energy generation, smart electrical grids, clean and wastewater systems, engineering consultants, transport infrastructure and communication networks.
2. Resource Efficiency: companies which derive revenue from the provision of technologies, products and services related to more efficient, safe and superior usage of natural environmental resources and energy.
Increased global demand for natural resources has stimulated significant investment in resource efficiency (for example: lower impact methods of using existing resources such as energy, water and land, as well as resource recycling). This is presenting opportunities for businesses involved in energy and water efficiency, wastewater recycling, air pollution technology, recycling (from residential waste to commercial scale industrial metals) and sustainable agriculture and land management.
3. Demographics: companies which derive revenue from the provisions of technology, products and services which enhance human wellbeing, consumer choice, communication and transportation whilst minimising environmental impacts.
Rising populations and changing demographic patterns around the world create unique challenges when it comes to environmental and economic sustainability. Ageing populations are putting pressure on healthcare, for example, and at the same time a growing global population is affecting agriculture and food production. These challenges have created opportunities for businesses that are providing sustainable, low impact solutions in sustainable consumption, public transport, health, agriculture and education.
These investment areas are not mutually exclusive and are evolving. Therefore, some companies in which the Fund invests may fall into more than one category. The team believes the investment universe is now in excess of 1,000 environmental solutions companies.
Research is undertaken to help ensure that the Fund’s investments are consistent with its policy of seeking to invest worldwide in companies that demonstrate a positive commitment to the long-term protection of the environment. Therefore, prior to investment each company must be approved as one that provides an environmental solution at the core of its business. This process is referred to as ‘positive’ screening as it determines whether a company can be included in the portfolio.
In addition, each company must also pass a ‘negative’ screen. Companies fail a negative screen if they derive over 10% of turnover from armaments, alcoholic drinks, tobacco, pornography, nuclear power or gambling. Given the Fund’s investment themes, it is rare for candidate companies to pass the positive screen but fail the negative screen. The negative screens therefore do not typically constrict the Fund’s investment universe.
Both elements of the research are undertaken by Jon Wallace and Mark Evans. This research is overseen by a dedicated Sustainability Review Committee, chaired by Jupiter’s Chief Investment Officer. The Committee meets on a quarterly basis in order to review the screening analysis in the previous quarter.
Resources, Affiliations & Corporate Strategies
In House RI/ESG Research
Jupiter has a dedicated Environment & Sustainable team focusing on the responsible investing products we offer and giving input and advice to the fund managers of the other strategies we offer. The research produced by our Environment & Sustainable analysts is shared widely with other investment teams.
Jupiter’s Governance Research (GR) team is embedded within the fund management department with a reporting line directly to the CIO. The GR team work in partnership with our fund managers on voting and engagement matters. The team’s responsibilities also include the monitoring of companies, client engagement, proxy voting operations, assessing industry consultations and contributing the development of internal policy and generating engagement ideas.
Jupiter’s ESG investment approach is fund manager led and this gives the fund managers the flexibility to integrate their ESG analysis into their investment approach. We believe that only through integration at a fund manager level can ESG issues truly be analysed and aid securities analysis through risk identification and mitigation as well as alpha generation.
Jupiter is a signatory to the United Nations Principles for Responsible Investment (UNPRI). At Jupiter, engagement with companies on ESG issues is carried out through face-to-face meetings, teleconferences and written communications which help inform our investment analysis and decision-making processes. We seek to invest in companies that are well managed, with high standards of corporate behaviour, responsibility and governance, which create an appropriate culture to enhance long-term shareholder value. We look to ensure appropriate disclosure on ESG issues both directly through its engagement with companies, and through it participation in investor initiatives. Jupiter participates in a number of key investment industry bodies including the Investment Management Association, the National Association of Pension Funds and UKSIF, the sustainable investment and finance association. We also participate in a number of joint investor networks and initiatives to promote sustainable investment and good governance, including the following:
Carbon Disclosure Project (CDP) – Jupiter is a founding signatory of CDP, which was launched in 2000 and conducted its first survey in 2003. CDP conducts a survey, which charts how the world's largest companies are addressing the challenges of climate change. The survey rates companies on the depth and scope of their disclosures and the quality of their reporting.
CDP Water Disclosure Project – Jupiter is a founding signatory to this new project that aims to help institutional investors better understand the business risks and opportunities associated with water scarcity and other water-related issues by increasing the availability of high quality information on this issue. The CDP Water Disclosure 2010 information request was sent to more than 300 of the world’s largest companies in sectors that are water intensive or are particularly exposed to water-related risk.
Investor Statement on a Global Agreement on Climate Change – The Statement was launched by the Institutional Investors Group on Climate Change (IIGCC) in 2006 and Jupiter became a signatory in 2008. The statement, supported by investment institutions, concludes that clear, credible long-term policy signals are critical for investors to integrate climate change considerations into their decision-making process and to support investment flows into a low-carbon economy.
Climate Communiqué’s – Bali 2007; Poznan 2008; Copenhagen 2009, Cancun 2010 – Jupiter has been a signatory of all four Communiqué’s, which call on world leaders to agree “an ambitious, robust and equitable global deal on climate change that responds credibly to the scale and urgency of the crisis facing the world today”.
Jupiter provides bespoke quarterly voting reports to institutional clients detailing meetings voted on, votes against management and reasons for doing so.
Jupiter is a Member of:
- UKSIF (the UK Sustainable Investment and Finance Association) – since 2001
- The 30% Club investor group – since 2009
- Green Bond Principles (GBP) – since 2016
- Investor Forum – since its launch in 2014
- Diversity Project – since 2017
Jupiter is a Respondent to:
- The UNPRI – since 2008
- EUROSIF European SRI Transparency Code – since 2001
- Carbon Disclosure Project – since 2000
Jupiter is a Signatory to:
- UNPRI (Jupiter is rated "A+" for “Strategy & Governance” as well as "A" for both "Listed Equity – Incorporation“ and "Listed Equity – Active Ownership) – since 2008
- UK Stewardship Code – since 2011
- Statement of Support for Task Force on Climate Related Financial Disclosures – since 2017
- Japan Stewardship Code – February 2018
- LGPS Transparency Code – April 2018