As at: 30/09/21

Contact: contactus@premiermiton.com

Overview

Filters

Fund information

Policy

The fund focus on companies that act responsibly, those with a strong Environmental, Social and Governance (ESG) profile and those that are part of long term themes that have a positive influence on society and the environment. The managers will analyse a company on a wide range of responsible factors including specific ESG criteria and will use this information to ensure it meets the required standards. At least 90% of the fund’s assets will meet both ESG and responsible investing criteria and theme alignment. The fund managers will not invest in companies that they believe have a negative societal or environmental impact.

Further details are available in the Fund Responsible Investing Policy available on our website at: https://corporate-premiermiton.huguenots.co.uk/srp/lit/7qe3rG/Ethical-policy-and-committee-of-reference_Premier-Miton-Responsible-UK-Equity-Fund_14-12-2021.pdf

Process

The fund managers focus on companies that act responsibly, those with a strong Environmental, Social and Governance (ESG) profile and those that are part of long term themes that have a positive influence on society and the environment. The managers will analyse a company on a wide range of responsible factors including specific ESG criteria and will use this information to ensure it meets the required standards. At least 90% of the fund’s assets will meet both ESG and responsible investing criteria and theme alignment. The fund managers will not invest in companies that they believe have a negative societal or environmental impact.

ESG criteria

The analysis of companies will include the following ESG criteria:

• Corporate governance – female representation on boards, remuneration structure, efficacy of auditors, disclosures Management – tenue, capability, clarity of strategy and policies
• Environmental and social impact – carbon emissions, resource usage and intensity, supply chain management, business ethics

Excluding companies with negative impacts

The fund managers will not invest in companies that they believe have a negative societal or environmental impact, including those companies:

• with major tobacco interests
• with major business in gambling
• with major business involvement in fossil fuels
• involved in violent or pornographic material
• that promote the irresponsible use of alcohol
• that damage the environment
• that contravene human rights
• involved in animal cruelty or testing (except if required by regulators for testing in a specific jurisdiction) that pursue aggressive tax avoidance policies
• that manufacture armaments

The fund managers focus on fundamental research of individual companies. Broad economic conditions will have an influence on that analysis rather than being the major driver of the decision making process.

The research includes detailed analysis of a company’s financial strength and competitive position. The financial strength will be determined by the analysis of profitability and cash generation with the aim of selecting companies that are financially strong enough to prosper in changing economic environments. A company’s competitive position will be assessed through analysis of its range of products or services, the nature of the industry in which it operates, intellectual property rights and patent protection amongst a range of other factors.

The portfolio of investments will be actively managed and will be spread across a number of industries, sectors and different sized companies to reduce investment risk. Companies that satisfy the investment criteria typically operate in faster growing sub-sectors of the economy that should be less affected by changing economic conditions.

Once a company has been identified as a potential investment, a range of valuation measures are employed with the aim of purchasing the shares at an attractive price.

Once purchased, the company is monitored to ensure that the investment case remains robust and the valuation of the shares is not too high. Should either of those factors not be met, the shares will be considered for disposal. Similarly, should the company fail to maintain the necessary standard of responsible or ESG or exclusion criteria, it will be divested.

Resources, Affiliations & Corporate Strategies

In-House Resources

Premier Miton’s Head of Responsible Investing is part of the investment team and brings significant experience and skills to further enhance our responsible investing approach and to ensure that we are well positioned to manage current and prospective clients’ money in a world that is increasingly focusing on sustainability. Responsible investing activities are directed by Premier Miton’s Chief Investment Officer with implementation led by our Head of Responsible Investing supported by an RI analyst alongside the investment team. Oversight of activities, as well as reviewing the related policies, is provided by Premier Miton’s investment and product governance structures.

External Resources

The fund managers subscribe to a number of independent providers of ESG data and research including Ethical Screening, ISS (Governance Quality Score, Climate Solutions, Fossil Fuels and Extractives Norms-Based Research and Proxy Voting Research), Sustainalytics ESG Risk Scores, CDP global disclosure data, Transition Pathway initiative data and Bloomberg.

Memberships and Affiliations

Premier Miton is a signatory to or participant in a number of stewardship and responsible investing related initiatives and industry bodies:

• UN PRI - We became a signatory to the PRI in January 2020, and we are committed to upholding its principles and supporting the investment industry in acting more responsibly. Our first PRI Assessment was undertaken in 2021 where we received a score of 3/5 stars for Investment & Stewardship Policy. We find this reporting process a useful benchmark as we further enhance our approach to responsible investing. We believe that significant progress has been made since our first assessment and look forward to updating our reporting in the next cycle due in 2023.
• Net Zero Asset Managers - We became a signatory to the Net Zero Asset Managers initiative (NZAM) in November 2022 to support the goal of net zero carbon emissions by 2050 or sooner. We are developing our net zero strategy which will guide us in reducing both our operational emissions as well as our portfolio emissions from the companies we invest in.
• Investor Forum - In 2022 Premier Miton became a member of the Investor Forum, a formalised group of institutional investors that facilitate collective engagement on material issues with listed UK companies. The aim is to position stewardship at the heart of the investment decision-making process by facilitating dialogue and creating long term solutions that help build trust between companies and their shareholders. As members, we will be strengthened in our ability to engage with and influence investee companies on environmental, social and governance matters.
• Climate Action 100+ - In December 2021 Premier Miton joined Climate Action 100+, a global investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. As signatories, our aim is to mitigate investment exposure to climate related risks and help secure ongoing sustainable returns for investors through collaborative engagement activities that hold select companies to account on their disclosure and climate related commitments.
• Carbon Disclosure Programme (CDP) - In 2020 we participated for the first time in CDP by submitting a climate change disclosure for Premier Miton Group plc. The aim of this work is to set an internal benchmark for climate risk management and to highlight areas where we need to improve. For our third year of completion in 2022 we achieved a score of ‘B.’ This is above the ‘C’ global average and ‘B-‘ average for financial services companies. Within our overall score, we achieved an ‘A’ for Governance, ‘A’ for Risk Management Processes and ‘A-‘ for Business Strategy, Financial Planning & Scenario Analysis.
• Votes Against Slavery - Modern slavery is a pervasive risk to business, supply chains, society and our economy. Rathbones convened the ‘Votes Against Slavery’ collaborative initiative to coordinate the response of the investment community and help provide the necessary accountability for and compliance to the UK Modern Slavery Act. Over 20 investment firms representing £3.2 trillion have since joined this initiative and collectively challenge FTSE350 companies that have failed to meet their reporting requirements. We have worked with this collaborative initiative since 2021 to engage with relevant companies held in our portfolios.
• UK Stewardship Code - We are also delighted that our last application to the Financial Reporting Council has been accepted and we subsequently remained a signatory to the UK Stewardship Code in 2022.
• Investment Association – We support the work of the Investment Association, participating in a number of committees and working groups, including the Sustainable and Responsible Investment Committee and attending the Sustainable Finance Disclosure Regulation Implementation Forum, Task Force on Climate-related Financial Disclosures (TCFD) Implementation Forum and inputting into other groups as required.
• IIGCC - We joined the Institutional Investors Group on Climate Change in February 2023 to support our activities associated with the Net Zero strategy, including corporate engagement and public policy engagement.

Literature

• Fund overview & literature (including factsheet)
• Fund Responsible Investing Policy
• Fund Non-Financial Objectives Report

Last amended: 12/07/23 05:36