Stewart Investors Worldwide Sustainability B GBP Acc (OEIC/Unit Trust)
SRI / Ethical Overview
The Stewart Investors sustainability portfolios aim to generate long-term, risk-adjusted returns for clients by investing in companies which are positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate. Investment decisions around sustainability are based on three key points: Identifying companies who manage sustainability risks and opportunities and those with a positive sustainability impact; Inclusion of environmental, social and corporate governance matters in investment research; Engaging directly with companies on identified sustainability issues. At the heart of the Stewart Investors philosophy is the principle of stewardship. We are active owners and stewards of the companies in which we invest.
Our emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing and while we do no formal negative screening, we are unlikely to invest in companies operating in high risk sectors, because of their poor long-term sustainable development positioning.
SRI / themed / ethical assets under management – overview
- Fund Size (GBP): 549.2 million as at 30 April 2018
- Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds: 11,174 million as at 31 March 2018
- Total value of assets covered by any additional ESG or responsible ownership policy: N/A
- Total assets under management: 21.1 billion as at 31 March 2018
SRI Policies (Primary strategy in bold)
- 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.
- 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.
- Positive social impact theme Find funds that specifically state that they aim to deliver positive social (ie people related) impacts and/or outcomes
- Positive environmental impact theme Find funds that specifically set out to help deliver positive environmental impacts, benefits or outcomes
- Plastics policy / reviewing plastics Find funds that are specifically managing or reviewing how they manage issues relating to the over use plastics (particularly single use plastics) as part of their investment processes
- RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
- 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.
- 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
- Responsible ownership / stewardship policy Find funds that have a policy that sets out what they do with regard to responsible investment ownership - also known as 'stewardship'. This typically relates to issues such as dialogue with companies and shareholder voting.
- 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.)
- Combines norms based exclusions with other SRI criteria Find funds that make significant use of internationally agreed 'norms' (eg United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process ALONGSIDE additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
- Combines ESG strategy with other SRI criteria Find funds that have an ESG strategy (which is typically focuses on avoiding companies that post environmental, social or governance related risks) with additional criteria such as positive and/or negative screens or engagement/stewardship strategies.
- Employ external oversight or advisory committee Find funds that have a external committee that helps steer or advise fund managers on SRI policy or strategy related issues. These people may be paid for their time but are not employees of the fund manager.
- 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.
- 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 full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
- Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
- PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.
- Boutique/specialist fund manager Find options offered by smaller, more specialist fund management companies with a significant (or entire) emphasis on sustainable, responsible, ethical, ESG or responsible ownership related investment strategies. Note - strategies vary significantly. Check fund manager supplied links for further information.
- 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 responsible corporate taxation Fund management company is working with the companies it invests in to encourage more responsible corporate taxation
- 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
- Full SRI policy information available on request Information on all selected filter options will be supplied by the fund manager if you ask them to do so
SRI / Ethical Policy
The principle of stewardship is central to Stewart Investors’ investment philosophy and has been since 1988. All the Stewart Investors’ investment strategies strive to integrate sustainability considerations into every investment decision. It is not treated as an optional bolt-on. The Sustainable Funds Group within the wider investment team takes this one step further by focusing on long-term sustainable development as a key driver of the investment process. Sustainability is an integral component of the investment process, and is viewed as a driver of returns in common with consideration of other investment factors.
We believe our job is to entrust our clients’ capital to good quality companies with strong management teams and sound long-term growth prospects.
Each investment is a decision to purchase not just a piece of paper or an electronic Bloomberg ticker, but part of a real business with all the rights and responsibilities that go with this ‘share’ of the ownership of the company. We take these rights and responsibilities seriously. We also believe the way we behave as investment professionals and the role we play in the broader industry are important for our own sustainability.
We seek to invest only in good quality companies. We focus on the quality of management, franchise and financials. By analysing the sustainable development performance and positioning of companies we can better measure less tangible elements of quality and identify less obvious risks. We invest in those companies we believe are particularly well positioned to deliver positive long-term returns in the face of the huge sustainable development challenges facing all countries today. Our emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing.
We are long-term investors. We strive to make investment decisions with a minimum five-year time horizon. We have an absolute return mind-set, defining risk as losing client money, rather than deviation from any benchmark index. We focus as much on the potential downside of our investment decisions as on the anticipated upside. The identification of long-term sustainable development risks thus becomes an extremely important way of managing risk. In addition, our willingness to differ substantially from index weightings, both country and company, means we are not obliged to be invested in any company or country if we have particular sustainability concerns.
Resources, Affiliations & Corporate Strategies
The emphasis is very much on the Stewart Investors team of analysts to identify and analyse companies, and sustainability and investment issues. The primary source of sustainability related information is one-on-one meetings with senior management. We undertake approximately 1400 such meetings each year across Stewart Investors. We are particularly interested in companies which embrace the underlying spirit of sustainability, rather than simply taking a compliance driven, box-ticking approach. Assessing the attitude and priorities of senior management is crucial.
We augment internal research with the use of external research. We drive and tender research to a range of researchers, from investment banks to non-government organisations (NGOs) and independent consultants that we believe will contribute to and enhance our investment decision making over time. Some themes that we have tendered include:
- Diversity in corporate Asia;
- Sales practices of Asian pharmaceuticals;
- GEM leaders in packaging solutions;
- US remuneration practices;
- ESG leaders in mining; and
- Fossil fuel dependent capital equipment companies.
Our current and previous tenders can be viewed on our website. http://www.stewartinvestors.com/en/research-tenders/
Please refer to our website for further information – www.stewartinvestors.com