Charity Assets Trust Acc (Charities)
SRI / Ethical Overview
Ruffer integrates environmental, social and governance (ESG) issues throughout the investment process. Ruffer’s ESG framework is led by Franziska Jahn-Madell, Director for Responsible Investment.
As an absolute return manager, with a relatively concentrated portfolio of equity holdings, we endeavour to holistically understand a company’s risks and opportunities including relevant ESG considerations. We conduct our own research, actively manage investments and operate freely, without the straightjacket of relative returns or market benchmarks. The majority of our investments are in traditional asset classes, such as equities, bonds, currencies and in-house funds.
The Charity Assets Trust has an ethical screening policy which restricts investment in alcohol, armaments, gambling, pornography and tobacco.
Please note: this fund is only available to charities.
SRI / themed / ethical assets under management – overview
- Fund Size (GBP): £95.3m as at 31 May 2018
- Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds: £95.3m as at 31 May 2018
- Total value of assets covered by any additional ESG or responsible ownership policy: £1.2b as at 31 December 2017
- Total assets under management: £22.4b as at 31 May 2018
SRI Policies (Primary strategy in bold)
- 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.
- 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.
- 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.
- Negative selection bias Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
- Faith friendly Find funds that have attributes that commonly suit the aims of investors of faith - although they may not be specifically marketed as being only for religious investors. Strategies vary (as do investor aims). 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.
- Limited/few ethical exclusions* Funds with this label tend to avoid fewer companies than other ethical funds or other options with avoidance criteria. Strategies vary. The fund may only avoid companies in one or two areas (eg only exclude tobacco or armaments companies) or they may exclude only the very worst companies when measured against internationally accepted standards (across potentially a range of areas). Read fund literature for further information.
- 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 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.
- 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.
- 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.
- 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.
- 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.
- 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
- 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
(a) The Fund also adopts certain ethical investment policy restrictions in relation to the asset allocation of the Fund. The Fund has a screening process which restricts investment by the Fund in the following sectors:
(b) The screening policy is implemented as follows:
(i) Alcohol – companies deriving more than 10% of their turnover through the sale or production of alcoholic beverages are excluded for investment purposes.
(ii) Armaments – companies deriving more than 10% of their turnover from strategic military sales and the development of indiscriminate weaponry are excluded for investment purposes.
(iii) Gambling – companies deriving more than 10% of their turnover through gambling are excluded for investment purposes.
(iv) Pornography – companies involved in the production, publication or distribution of pornography are excluded for investment purposes. Telecommunication companies will not be covered by this exclusion.
(v) Tobacco – companies deriving more than 10% of their turnover through the production or sale of tobacco related products are excluded for investment purposes.
Resources, Affiliations & Corporate Strategies
Ruffer integrates environmental, social and governance (ESG) issues throughout the investment process. Ruffer’s ESG framework is led by Franziska Jahn-Madell, Director for Responsible Investment and our team has recently been expanded to include a second analyst, Alexia Palacios. Our ESG team partners closely with analysts in Ruffer’s Research Team, with two analysts (Des Brennan – Research Director, Tristan Matthews – Research Analyst) having been appointed as ESG specialists, to help fully incorporate ESG considerations into our investment theses.
As an absolute return manager, with a relatively concentrated portfolio of equity holdings, we endeavour to holistically understand a company’s risks and opportunities including relevant ESG considerations. It is important to emphasise that these considerations are important in recognising opportunities, such as identifying companies which have made positive progress on addressing corporate governance issues in Japan or companies which are successfully transitioning to a low carbon economy. We conduct our own research, actively manage investments and operate freely, without the straightjacket of relative returns or market benchmarks. The majority of our investments are in traditional asset classes, such as equities, bonds, currencies and in-house funds.
We subscribe to MSCI ESG Research which we use to inform our initial research. Additionally, we also consult reports from the Sustainability Accounting Standards Board (SASB) and other relevant sources at the idea generation stage. We also take corporate governance recommendations reports by ISS into account which is our current proxy voting provider.
ESG is understood to be one layer in the risk assessment carried out prior to and during our investment.
ESG considerations are discussed, where relevant
- at the idea generation stage and included in the initial stock note provided to portfolio managers
- in subsequent stock review meetings
- in later stage conviction reviews
- in macro thinking on ESG issues
When ESG risks are identified we will endeavour to draft an active stewardship plan which may include some or all of the following activities: strategic voting, co-filing shareholder resolutions, engagement with the holding company, joining a collaborative engagement group.
Ruffer is supporter of the IIGCC and is a founding investor signatory of the five year collaborative engagement initiative Climate Action 100+. Through the working groups for this initiative we will engage with BP, Exxon Mobil, Imperial Oil, Phillips 66 and Royal Dutch Shell, and initial progress has been made in communicating the engagement objectives and timeline with these companies. We are also an active supporter of the Transition Pathway Initiative (TPI), an asset owner led initiative, which assesses how companies are preparing for the transition to a low-carbon economy. We have used the initiative’s assessment to engage with companies in the fossil fuel sector in 2017.