As at: 30/11/23

Overview

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Policy

The Jupiter Ecology Fund sits within the Environmental Solutions strategy. The range of funds seek to generate long term capital appreciate and income by investing in listed equity and fixed income securities that focus on making a positive impact towards environmental and sustainable objectives. We seek to do this through investment in organisations focussed on solving one, or both, of the two main environmental challenges of our time: climate change and natural capital depletion.

ESG is therefore intrinsic to the Funds’ investment objectives and philosophy.  We believe that sustainability challenges such as climate change will play an increasingly pivotal role in global development which will generate multi-decade, structural growth opportunities for companies focussed on providing solutions.

In addition to framing the thematic investment universe, wider ESG factors play an important role in understanding the risk profiles of potential investments.  We believe that an enhanced understanding of ESG risk factors provides a stronger assessment of risk and opportunity and therefore leads to improved financial returns for the portfolio.

We put this into practice through our ESG signature, which is composed of thematic solutions analysis layered on top of traditional ESG integration.

In addition to framing the thematic investment universe, wider ESG factors play an important role in understanding the risk profiles of potential investments. We believe that an enhanced understanding of ESG risk factors provides a stronger assessment of risk and opportunity and therefore leads to improved financial returns for the portfolio.

The strategy’s thematic solutions investment process incorporates negative screening and norms-based screening but starts with positive screening for exposure to six environmental themes related to climate change and natural capital-related solutions. The achievement of these environmental objectives are a formal part of our investment strategy, and we engage in impact measurement of our contribution to these objectives.

Having identified the environmental challenges to be addressed, the starting point for the analysis methodology is to establish an investment universe of opportunities that align to one or more of our environmental solution themes: Circular Economy, Clean Energy, Green Mobility, Green Buildings & Industry, Sustainable Agriculture & Land Ecosystems and Sustainable Oceans & Freshwater Systems.

The primary ESG analysis is therefore thematic, centring on a revenue-focussed approach that aligns with the European Taxonomy for Sustainable Investment. The investment universe is defined by companies that typically receive more than half of their revenues from products or services that address one or more of our themes. Typically, the Funds are composed of companies that generate well in excess of this level.

In addition to these criteria, the investment process considers and engages upon adverse impacts including but not limited to the categories of greenhouse gas emissions, biodiversity impacts, social and employee matters, human rights and anticorruption and bribery. We make use of proprietary and third-party research to exclude investment into activities and operations contradicting the principles of the United Nations Global Compact. A potential holding qualifies provided it contributes to one of six solution themes which reflects the leading global frameworks in this space: the Paris Climate Agreement, the World Forum on Natural Capital, and the Post-2020 Global Biodiversity Framework.

As a result, the incorporation of climate transition risks and opportunities is inherent to the Environmental Solutions investment approach. By virtue of a holding’s contribution to one of our six themes companies’ business models tend to not only show resilience to transition risks, but are positioning to benefit from transition opportunities: their products and services are helping to drive and enable the transition to a low-carbon economy.

Process

The Environmental Solutions strategy seeks to generate long term capital appreciate and income by investing in listed equity and fixed income securities that focus on making a positive impact towards environmental and sustainable objectives. We seek to do this through investment in organisations focussed on solving one, or both, of the two main environmental challenges of our time: climate change and natural capital depletion.

ESG is therefore intrinsic to the Funds’ investment objectives and philosophy.  We believe that sustainability challenges such as climate change will play an increasingly pivotal role in global development which will generate multi-decade, structural growth opportunities for companies focussed on providing solutions.

Our thematic solutions investment process incorporates minimum standards (negative and norms-based screening) but starts with positive screening for exposure to six environmental themes related to climate change and natural capital-related solutions. The achievement of these environmental objectives are a formal part of our investment strategy, and we engage in impact measurement of our contribution to these objectives.

In addition to these criteria, the investment process considers and engages upon adverse impacts including but not limited to the categories of greenhouse gas emissions, biodiversity impacts, social and employee matters, human rights and anticorruption and bribery. We make use of proprietary and third-party research to exclude investment into activities and operations contradicting the principles of the United Nations Global Compact.

Having identified the environmental challenges to be addressed, the starting point for the analysis methodology is to establish an investment universe of opportunities that align to one or more of our environmental solution themes: Clean Energy, Green Mobility, Green Buildings & Industry, Sustainable Agriculture & Land Systems, Sustainable Oceans & Freshwater Systems, and Circular Economy.

The primary ESG analysis is therefore thematic, centring on a revenue-focused approach that aligns with the European Taxonomy for Sustainable Investment. The investment universe is defined by companies that typically receive more than half of their revenues from products or services that address one or more of our themes and which also meet our minimum standards for investment. Having established this, we then undertake wider ESG analysis for all investments and this concludes with impact measurement for our annual impact reports.

Towards the wider ESG integration, we are supported day-to-day Jupiter’s Stewardship Team and formally by the quarterly stewardship committee. ESG is also integrated into the semi-annual fund manager review process with the CIO Office, as well as the quarterly Risk and Challenge meetings.

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 annual stewardship policy and stewardship report formalise our responsible and sustainable investment process across all asset classes. These documents outline how we integrate ESG into the investment process, monitor investee companies, when and how we choose to engage – and, where relevant, escalate our engagements – ESG controls, as well as how we assess stewardship outcomes and exert active ownership, including via proxy voting. 

Our most recent stewardship report includes statements from our Chairman, CEO, and Chief Investment Officer discussing the accompanying actions to ensure our investment beliefs, strategy and culture enable effective stewardship. For example, stewardship is a formal component of each fund manager’s objectives.

Our fund managers take the lead on stewardship and integrate ESG analysis within their investment approach, supported by Jupiter’s Stewardship Team.  Our Stewardship Committee, a sub-committee of the Executive Committee, meets quarterly and is responsible for review of Jupiter’s policies on stewardship and engagement, ensuring adherence to our stewardship obligations. It considers potential systemic risks to which Jupiter may be exposed, for example in relation to climate change and stakeholder alignment. It also coordinates and reviews engagement across asset classes in which the firm invests, and debates whether we are receiving an adequate response. The Stewardship Committee members include the CIO, Head of Stewardship, and fund manager representatives across asset classes and geographies, including Environmental Solutions.

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.

ESG Engagement

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

Literature

• Fund overview & literature (including factsheet)
• ESG & Stewardship

Last amended: 20/02/24 07:54