WHEB Listed Equity (Corporate Activity)
SRI / Ethical Overview
What differentiates our fundamental analysis from our competitors’ is that we integrate sustainability and financial analysis of companies at every stage of the analytical process. Our single investment team carries out a holistic analysis of potential investments and we do not rely on an outsourced data provider for an ESG rating score. We believe this enables us to identify qualities, trends, risks and opportunities which are under-researched by mainstream analysts. The team applies such ‘integrated analysis’ when assessing a company as a potential long term investment within a framework focused on market attractiveness, competitive position, value chain analysis, growth strategy and management quality. Our analysis considers the range of environmental, social and governance factors together with strategic and financial analysis to derive a score which reflects a company’s business strength, its quality (both sustainable and financial) and its market position. The stock profile and company score is used as a basis for the team to debate individual and comparative stock fundamentals.
Our integrated company analysis helps us to protect the fund from companies that are poorly positioned to deliver market out-performance over the long-term. Our research considers the robustness of risk management systems, governance processes, the extent of any involvement in controversial issues or activities and overall company alignment with sustainability issues and themes. Based on this analysis, we are able to form a view of a company’s quality and suitability for the fund. If the company is, in our view, exposed to excessive reputational risk, or has significant activity in areas that are not consistent with the philosophy of the fund, then it is unlikely to be selected for investment.
More information on our approach to ESG issues and to broader positive ‘impact’ is available in our Impact Report
Our ESG integration principles apply to equity assets in all geographic regions.
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.
- ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
- Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
- Integrates ESG factors into all/most fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
- Vote all* shares at AGMs/EGMs This fund manager votes or aims to vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' - where fund managers consider - and express their views on - the key business issues effecting the companies they part own. (*Allowance is made for exceptional situations such as when shares are in the process of being sold.)
- In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
- Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
- UK Stewardship Code signatory Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave as responsible 'company owners'.
- Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
- Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
- Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
- Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
- PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.
SRI / Ethical Policy
Information on these topics can be found on the FP WHEB Sustainability Fund entry in the OEIC/Unit Trust product category.
Resources, Affiliations & Corporate Strategies
We use ISS for research on governance and voting.
Each analyst carries out stewardship and governance activities on the stocks for which they are responsible, under the guidance of Seb Beloe, Head of Research.
Decision making is carried out collectively by the team, led by Fund Manager, Ted Franks.
We are involved with and support a range of industry initiatives and thought leadership groups, including UNPRI, IIGCC, UKSIF, EUROSIF, FRC Stewardship Code, CDP, Tomorrows Capital Markets, Sustainable Stock Exchanges and International Integrated Reporting Framework. For more information, see http://www.whebgroup.com/about-us/thought-leadership/