Fund Name | SRI Style | Product | Region | Asset Type | Launch Date | |
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CT UK Sustainable Equity Fund (CT) (Threadneedle) |
Sustainability Select | OEIC/Unit Trust | UK | Equity | 30/10/2015 | |
Fund Size: £26.00m Total screened & themed / SRI assets: £552.00 Total Responsible Ownership assets: £24779.00 Total assets under management: £400144.00 As at: 31/12/20 |
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OverviewLaunched in October 2015, the Fund takes a novel approach in combining positive sustainable outcomes, ESG risk management and negative screening. It was awarded Best New Entrant, at Investment Week’s Sustainable Investment Awards 2016. Our philosophy outlines how we action our sustainable investment thesis: our strategy for delivering sustainable and financial benefits.
We reject market short-termism Given the impact of longer-term sustainable themes, short term profits do not reflect the fundamental value of a business. Conversely, short-term reduction in profits – e.g. due to investment in the delivery of sustainable solutions of the future that pay off only over the longer term – can provide financial gain.
We take a longer-term view towards a better future We look for sustainable businesses, those with products and services which benefit from and contribute to sustainable development, with sustainable economic returns and disciplined management. Given the greater capacity of smaller and mid-sized companies to innovate and exploit new markets, these form an important component of the Fund – the opportunity to drive innovation today towards a better future.
We look for companies exhibiting standards and discipline Understanding the internal standards and discipline within a business is vital within a holistic view of its approach to sustainability. This encompasses internal environmental, social and governance (ESG) factors, as well as financial stewardship. Leadership and improvement on these issues can signal future financial success, whilst creating a more sustainable, green and inclusive economy. . Please note: BMO GAM (EMEA) became part of Columbia Threadneedle Investments, the global asset management business of Ameriprise, on 8th November 2021. From 4th July 2022 the ‘Threadneedle’-named fund ranges of Columbia Threadneedle will transition to the CT prefix, providing consistency with the rebranding of BMO funds. |
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FiltersFund informationSustainabilityEnvironmental policy Sustainability policy Resource efficiency policy or theme Sustainability theme or focus Favours cleaner, greener companies UN Sustainable Development Goals (SDG) focus Nature & BiodiversityAvoids genetically modified seeds/crop production Climate Change & EnergyNuclear exclusion policy Coal, oil & / or gas majors excluded Climate change / greenhouse gas emissions policy Invests in clean energy / renewables Fracking and tar sands excluded Clean / renewable energy theme or focus Fossil fuel reserves exclusion Targeted Positive InvestmentsInvests >25% of fund in environmental/social solutions companies Invests >50% of fund in environmental/social solutions companies Human RightsHuman rights policy Child labour exclusion Responsible supply chain policy or theme Social / EmploymentSocial policy Health & wellbeing policies or theme Favours companies with strong social policies Meeting Peoples' Basic NeedsDemographic / ageing population theme Invests > 5% in social housing Ethical Values Led ExclusionsEthical policies Tobacco and related product manufacturers excluded Armaments manufacturers avoided Alcohol production excluded Gambling avoidance policy Pornography avoidance policy Governance & ManagementGovernance policy Anti-bribery and corruption policy Avoids companies with poor governance Encourage board diversity e.g. gender Fund GovernanceESG integration strategy Asset Size & MetricsOver 50% large cap companies Invests in small, mid and large cap companies Invests mostly in large cap companies How The Fund WorksBalances company 'pros and cons' / best in sector Strictly screened ethical fund Limited / few ethical exclusions* Positive selection bias Negative selection bias Norms focus Combines norms based exclusions with other SRI criteria Combines ESG strategy with other SRI criteria SRI / ESG / Ethical policies explained on website Assets mapped to SDGs Impact MethodologiesAims to generate positive impacts (or 'outcomes') Measures positive impacts Positive environmental impact theme Positive social impact theme Invests in environmental solutions companies Invests in social solutions companies Invests in sustainability / ESG disruptors Labels & AccreditationsEurosif Transparency Intended Clients & Product OptionsFaith friendly Available via an ISA (OEIC only) Fund management company informationAbout The BusinessESG / SRI engagement (AFM company wide) Responsible ownership policy for non SRI funds (AFM company wide) Responsible ownership / ESG a key differentiator (AFM company wide) Diversity, equality & inclusion engagement policy (AFM company wide) Vote all* shares at AGMs / EGMs (AFM company wide) Integrates ESG factors into all / most fund research SDG aligned aims / objectives (AFM company wide) ResourcesIn-house responsible ownership / voting expertise Employ specialist ESG / SRI / sustainability researchers Use specialist ESG / SRI / sustainability research companies Collaborations & AffiliationsPRI signatory UKSIF member UN Net Zero Asset Owners / Managers Alliance member AccreditationsUK Stewardship Code signatory (AFM company wide) Engagement ApproachRegularly lead collaborative ESG initiatives (AFM company wide) Encourage responsible corporate taxation (AFM company wide) Company Wide ExclusionsReview(ing)carbon / fossil fuel exposure for all funds (AFM company wide) Controversial weapons avoidance policy (AFM company wide) Climate & Net Zero TransitionEncourage carbon / greenhouse gas reduction (AFM company wide) TransparencyPublish full voting record (AFM company wide) Publish responsible ownership / stewardship report (AFM company wide) Full SRI policy information on company website |
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PolicyOur sustainable investment criteria comprise the following:
Sustainable themes We maintain a primary focus on companies exposed to sustainable themes through their products and services. These are best positioned to benefit from, and contribute to, a sustainable future. At minimum, these will comprise 75% of the Fund.
ESG quality An additional focus is on ESG quality – up to 25% of the Fund represents companies exhibiting best-in-class practices notwithstanding current exposure to sustainable products and services (although these companies must not materially detract from sustainable themes). ESG also provides a lens on quality and risk management across the Fund. We typically avoid companies with entrenched poor practices but may invest where we believe there is scope for related engagement to drive improvements.
Sustainable and ethical exclusions To underpin the Fund’s sustainability focus, we exclude companies offering unsuitable products and services i.e. those at odds with the fundamental concept of advancing sustainable development, inclusion of which we consider would not be consistent with the expectations of investors in the Fund: this is consistent with the criteria which have underpinned the Fund since launch. Our sustainable themes and the SDGs At a global level, the UN Sustainable Development Goals (SDGs)[1] outline a number of sustainable development priorities and aspirations looking out to 2030, for support by both the public and private sectors. At a local level, challenges such as demographic change, housing need, and making the UK economy more environmentally sustainable also require solutions. Together these necessitate significant investment in, and support of, sustainable products, services and practices – indicative of a positive policy and market environment for companies targeted by the Fund. [1] The SDGs were originally drafted for governments but have since been adopted by investment companies.
Our eight sustainable themes are aligned with the UN Sustainable Development Goals (SDGs), translated for use in an investment context. These themes are shown below, alongside a primary SDG with which they align (although we look across all SDGs when assessing companies in the Fund) and a relevant opportunity for UK equities.
When assessing a companies’ exposure to our themes we identify both current revenue exposure to the themes as well as strategy and innovation supporting delivery of sustainable outcomes. Importantly, we do not just consider positive exposure, but net exposure (positive less negative) across all products and services as they relate to the themes. As outlined above, 75% of the Fund must be positively exposed to these themes on a net basis. At minimum, all invested companies must be neutrally exposed or transitioning towards positive exposure to these themes (e.g. a food and beverages company repositioning their portfolio towards healthier food).
Depending on companies’ net revenue exposure, they are labelled as a sustainable outcome leader, advanced contributor, contributor, transition or neutral. Companies misaligned are excluded from the Fund.
For companies identified as no longer meeting the Sustainable Investment Guidelines, an appropriate action plan will be drawn up and an action plan comprising an exit strategy implements in the best interest of underlying investors.
ESG Quality Leadership and improvement on ESG and stewardship issues can signal future success, whilst creating a more sustainable, green and inclusive economy. Consequently, up to 25% of the Fund may represent companies selected for their strong ESG and stewardship practices.
ESG and stewardship also provide a lens on quality, risk management and the mitigation of negative impact – hence relevant for all companies in the Fund. We avoid companies with entrenched poor practices.
In identifying the strength of a company’s ESG and stewardship practices we take the following approach:
[1] Further information, including their full industry mapping of material factors, is available online.
To implement this approach, we undertake not only our own research but also use innovative tools. In particular our proprietary Responsible Investment (RI) model incorporates all the factors mentioned above and has been back tested to show positive results.
Active Ownership We also take the opportunity to engage with companies to better understand their perspectives, to offer input as responsible stewards and, as appropriate, to seek improvement in practices. This is particularly important for smaller companies, which typically have weaker governance arrangements as compared to larger peers.
Equally, we vote actively at company meetings and view this as a powerful way of sending signals to company management. Voting processes and policies reflect not only traditional governance issues, but also wider sustainability matters – such as company approaches to climate change and diversity.
For further information on our Responsible Investment approach across the firm, including engagement and our firm-wide voting policy, please see our Responsible Investment website (https://www.columbiathreadneedle.co.uk/en/investment-capabilities/governance-and-responsible-investment/).
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Process |
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Resources, Affiliations & Corporate StrategiesThe responsibility for our responsible investment activities lies with our Responsible Investment (RI) Team. Our RI Team is responsible for leading the research and assessment of environmental, social and corporate governance issues to support investment across Columbia Threadneedle. Colin Moore, our Global Chief Investment Officer, maintains oversight responsibility for our responsible investment initiatives and Kirk Moore, our Global Head of Research, maintains oversight for leading centralized research across the firm, including oversight of the global RI Team. The broad objective of the RI Team is to enhance investment performance across the firm by creating unique insights into company and industry risks and opportunities that are not otherwise uncovered through traditional analysis. The global RI Team is based in our London and Minneapolis offices, comprising 15 full time members, across three principal workstreams: (1) Thematic Research, with seven dedicated analysts, (2) Stewardship and Voting, with seven dedicated analysts, and (3) Policy with one dedicated analyst. Sources of Information to the RI team include: Broad ESG:
Broad Thematic
Issue or Market Specific :
The UK and RI teams work together to identify opportunities for the Fund. Assessment of companies’ sustainable outcomes is done by the RI team who produce bespoke research and assess ESG risk management and the active stewardship approach including voting. Financial analysis is undertaken by the UK equity team, drawing on the wider resources of the business, using their established investment process to identify companies with attractive valuations. Fund manager The Fund is co-managed by Sonal Sagar and James Thorne. Supported by the RI team, and the UK team, and mindful of the exclusionary criteria, the manager makes the final investment decision. General corporate affiliations We were a founding member of the UN PRI and remain actively involved in the organisation. In our last assessment from the PRI we received an A+ (the highest rating) for our overall approach to responsible investment, a score that has been maintained for the last four years. Other key memberships are those of: the United Kingdom Sustainable Investments and Finance Association (UKSIF), the European Sustainable Investment Forum (EUROSIF), the UK’s Investment Association, the UK’s Investor Forum, the UK Taskforce on Growing a Culture of Social Impact Investing and the Global Impact Investing Network. These memberships reflect our commitment to RI and impact investing across a range of markets, reflecting the geographic diversity of our investments, as well our significant holdings in UK-listed companies. Our Chief Investment Officer sits on the board of the Investor Forum, which seeks to contribute to long-term investment performance by promoting cultural change and enhancing shareholder stewardship in the UK. Similarly, we are also an active member of the UK Corporate Governance Forum, an investor network made up of asset managers and owners to discuss individual companies, industry and ESG developments, UKSIF, the Investment Association and the Investor Forum and are signatories to the UK Stewardship Code. We are also signatories to the CDP (formerly the Carbon Disclosure Project), including their forestry and water programmes. |
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LiteratureLast amended: 16/10/23 09:45 |
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