Fund Name | SRI Style | Product | Region | Asset Type | Launch Date | |
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Sarasin Responsible Global Equity Fund |
Sustainability Select | OEIC/Unit Trust | Global | Equity | 01/06/2011 | |
Total assets under management: £18745.70 As at: 31/03/23 Contact: Christopher.cade@sarasin.co.uk |
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OverviewThe Sarasin Responsible Global Equity fund is an active thematic investment strategy designed as a core global holding for the ‘concerned’ investor. It provides broad global equity exposure while setting a higher threshold on environmental, social and governance (ESG) issues:
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FiltersFund informationSustainabilityEnvironmental policy Sustainability policy Limits exposure to carbon intensive industries Resource efficiency policy or theme Sustainability theme or focus Waste management policy or theme Favours cleaner, greener companies Sustainability focus Report against sustainability objectives Encourage more sustainable practices through stewardship Nature & BiodiversityDeforestation / palm oil policy Plastics policy / reviewing plastics Unsustainable / illegal deforestation exclusion policy Climate Change & EnergyCoal, oil & / or gas majors excluded Climate change / greenhouse gas emissions policy Invests in clean energy / renewables Fracking and tar sands excluded Fossil fuel reserves exclusion Energy efficiency theme Require net zero action plan from all/most companies Encourage transition to low carbon through stewardship activity Human RightsHuman rights policy Child labour exclusion Responsible supply chain policy or theme Social / EmploymentSocial policy Health & wellbeing policies or theme Labour standards policy Favours companies with strong social policies Meeting Peoples' Basic NeedsWater / sanitation policy or theme Demographic / ageing population theme Ethical Values Led ExclusionsEthical policies Animal welfare policy Animal testing exclusion policy Tobacco and related product manufacturers excluded Armaments manufacturers avoided Alcohol production excluded Gambling avoidance policy Pornography avoidance policy Animal testing - excluded except if for medical purposes Civilian firearms production exclusion Banking & FinancialsPredatory lending exclusion Governance & ManagementGovernance policy Anti-bribery and corruption policy Avoids companies with poor governance Digital / cyber security policy Encourage board diversity e.g. gender Encourage TCFD alignment for banks & insurance companies UN sanctions exclusion Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy ESG factors included in Assessment of Value (AoV) report How The Fund WorksBalances company 'pros and cons' / best in sector Strictly screened ethical fund Positive selection bias Negative selection bias Combines ESG strategy with other SRI criteria ESG weighted / tilt SRI / ESG / Ethical policies explained on website Impact MethodologiesPositive environmental impact theme Positive social impact theme Invests in social solutions companies Labels & AccreditationsRSMR rated (OEIC funds only) Intended Clients & Product OptionsIntended for investors interested in sustainability Intended for clients who want to have a positive impact Available via an ISA (OEIC only) Bespoke SRI / ESG portfolios available (DFMs) Fund management company informationAbout The BusinessESG / SRI engagement (AFM company wide) Responsible ownership / stewardship policy or strategy (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) Boutique / specialist fund management company Integrates ESG factors into all / most fund research In-house diversity improvement programme (AFM company wide) ResourcesIn-house responsible ownership / voting expertise Employ specialist ESG / SRI / sustainability researchers Use specialist ESG / SRI / sustainability research companies ESG specialists on all investment desks (AFM company wide) Collaborations & AffiliationsPRI signatory Climate Action 100+ or IIGCC member Fund EcoMarket partner GFANZ member (AFM company wide) AccreditationsUK Stewardship Code signatory (AFM company wide) PRI A+ rated (AFM company wide) Engagement ApproachRegularly lead collaborative ESG initiatives (AFM company wide) Encourage responsible corporate taxation (AFM company wide) Company Wide ExclusionsControversial weapons avoidance policy (AFM company wide) Tobacco avoidance policy (AFM company wide) Fossil fuel exclusion policy (AFM company wide) Do not invest in companies with fossil fuel reserves Climate & Net Zero TransitionEncourage carbon / greenhouse gas reduction (AFM company wide) Net Zero commitment (AFM company wide) Working towards a ‘Net Zero’ commitment (AFM company wide) Net Zero - have set a Net Zero target date (AFM company wide) TransparencyPublish full voting record (AFM company wide) Publish responsible ownership / stewardship report (AFM company wide) Full SRI policy information available on request Net Zero transition plan publicly available (AFM company wide) Sustainability transition plan publicly available (AFM company wide) |
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PolicyOur responsible investment policy – embedded in the Sarasin Responsible Global Equity Fund – integrates both ethics and principles of stewardship.
We consider ourselves to be stewards of our clients’ assets, a mind-set that is guided by a commitment to think like owners of the companies in which we invest, rather than simply holders of the shares. We have enhanced the UN’s Sustainable Development Goals and developed our own stewardship principles, which apply to all strategies that we manage. Our Stewardship approach has three core pillars:
Our core process does not systematically exclude any company from our investment universe unless it is involved with illegal weapons (cluster bombs, landmines, biological and chemical weapons). However, Sarasin Responsible Global Equity Fund features an additional layer of ‘values-based’ scrutiny, whereby ‘ethical’ overlays are made to our core process.
This excludes companies from our investment universe based on two further levels of analysis:
We ensure no investments are made in companies that derive a material amount of their business (normally 5% to 10% of sales) from activities deemed to be socially harmful. Examples include: adult entertainment, gambling, tobacco, alcohol, armaments, civilian firearms, tar sands and thermal coal.
We apply a rigorous subjective screen to exclude companies that persistently engage in practices that cause needless social and environmental harm, or where we perceive egregious governance failures, and where we believe there is no potential for our engagement to improve practices. Here we are not focused on financial materiality. |
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ProcessOur aim is to deliver enduring value for our clients across market cycles. When we invest on behalf of our clients, we look to the long-term prospects of a company. We purchase shares where there is a case for enduring value creation, and where this is currently underappreciated by the market.
We also believe that responsible companies will tend to create more durable economic value. Specifically, we favour businesses that articulate compelling long-term strategies, and take seriously their responsibilities to their customers, supply chain, staff, local communities, the environment, and their shareholders.
Once we become shareholders on behalf of our clients, we believe it is important to build lines of communications with the executives and the Board of Directors. Stewardship is as much about ongoing responsible ownership as to the considered approach to selecting investee companies.
We also believe that our clients’ long-term interests are not best served by a narrow focus on relative performance against a market index. The service we offer goes beyond beating a benchmark: first and foremost, we start with our clients’ needs and take a holistic approach. We would not, for instance, deploy capital in a company whose success involves causing significant harm elsewhere, which could damage our clients’ interests. Where we believe we can play a positive role in boosting broader market returns through improved government policies or market practices we will seek to catalyse change.
We aim to invest in companies that benefit from our ‘global themes’, or societal trends such as digitalisation, automation, ageing, emerging consumers and climate change. Further, we seek companies that are able to drive long-term performance through credible strategies to transform these strengths into enduring value, and demonstrating robust governance structures that will protect shareholders’ and creditors’ interests. Environmental, governance and social factors are considered alongside other value drivers in determining a company’s ‘investment case’ and ‘risks to investment’. Companies’ long-term success depends on strategies that sustainably deliver goods or services valued by customers, such that companies earn an attractive return, maintain their license to operate and prosper. A company’s relations with core stakeholders, from employees, to suppliers, to regulators, to local communities to other groups that are impacted by (and may impact) the company’s operations, as well as its environmental performance, are important considerations.
ESG is a required part of our analysis, and where we identify potential material impacts, this must be reflected within our valuation and modelling. This, therefore, has an impact on portfolio construction as it is part of the fair value and fundamental assessment of a company, which is considered in the investment decision and position sizing.
Once we have bought a stake in a company, we stay close to it. We monitor the business’ strategic outlook and performance, its critical value drivers to ensure their persistence, and our conviction in the stock’s long-term value proposition. Engagement and voting are key considerations throughout our research process in order to communicate with management on ESG and other issues and press where we see a need for change. A considered approach to voting is vital not just because it is a key avenue through which we can express our views, but also because it supports our relationships with the company’s Board of Directors and executives.
The vast majority of our ESG analysis is proprietary analysis. We do use a range of providers to supplement this proprietary work, including MSCI, ISS as well as various ESG networks like ICGN, ACGA, alongside sell-side brokers and independent research input. All external data provided assists with our overall research process but in no way replaces or precludes the need for proprietary ESG and stewardship research. Our process is founded on the robustness and soundness of our own research prior to reliance on the data of third parties. For ethical screening, we use MSCI data. We also initiate, sponsor and participate in academic work and discussion to identify and investigate early opportunities, themes and trends. |
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Resources, Affiliations & Corporate StrategiesInternal Resources All of our analysts and portfolio managers consider ESG factors when discussing stock ideas and building an investment case. Thus, we consider the entire team an ESG resource.
The stewardship specialists are directly responsible for engagement efforts, and work with the analysts to help them develop their ESG analysis and ratings for stocks.
Whilst the analysts own their ratings, this must be approved by the stewardship team to ensure joint accountability. It is important to note that our stewardship specialists are part of the global equity team, and are involved in team discussions and decisions.
We utilise our own framework and ratings systems to represent our proprietary ESG analysis. This analysis is bottom-up and driven by extensive primary research carried out by our analysts, supplemented with ESG data from MSCI, ISS and other sources.
Affiliations and Memberships In addition to the UN PRI, we are signatories to the 2020 UK Stewardship Code – and passed the Financial Reporting Council’s assessment for this in September 2021s. Other memberships / initiatives including those listed below, are often the forum in which we work to improve ESG standards and taxonomy:
ENVIRONMENTAL
SOCIAL
GOVERNANCE
We also support The Local Authority Pension Fund Forum (LAPFF).
Many of these commitments provide us with a network of peers and supporters for key ESG related issues. It is important for us to remain engaged with group advocacy work, collaborative endeavours, such as engagements, but also to keep aware of best practice.
Often, we find these networks to be useful sources of data and information either on a broad ESG related issue or on company specific metrics that may not be found in other sources. While the majority of our company engagements are pursued on our own, as outlined in later responses, we will collaborate with other investors where we are seeking to escalate due to resistance from the board or executives. Often having a larger shareholding united on a matter of concern can be more impactful. Wherever we explore collaboration, we ensure the steps we take are consistent with local laws and regulations. In certain cases, these collaborations link into broader initiatives that we support, such as ICCR Covid-19 engagement; the Workforce Disclosure Initiative; the Ellen MacArthur global commitment on recycling; or Climate Action 100+. |
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DialshifterThis fund is helping to ‘shift the dial from brown to green’ by… …through our belief that the most crucial way in which we as a firm can have an impact on sustainability is through our stewardship work with investee companies. Responsible investment has the power to deliver enduring value to clients in a way that benefits society. Equally, wealth creation at society’s expense is likely to be ephemeral. Our approach has three tenets:
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… … pressing investee companies to align with the Paris climate goals:
We also promote policy through policy outreach and public statements. |
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Literature
Disclaimer: This document is for investment professionals only and should not be relied upon by private investors. This information has been issued by Sarasin & Partners LLP, a limited liability partnership registered in England & Wales with registered number OC329859, and which is authorised and regulated by the UK Financial Conduct Authority with firm reference number 475111. information on which the document is based has been obtained from sources that we believe to be reliable, and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to their accuracy. All expressions of opinion are subject to change without notice. The value of your investments and any income derived from them can fall as well as rise and you may not get back the amount originally invested. If investing in foreign currencies, the return in the investor’s reference currency may increase or decrease as a result of currency fluctuations. Past performance is not a reliable guide to future returns and may not be repeated. Neither Sarasin & Partners LLP nor any other member of the J. Safra Sarasin Holding Ltd group accepts liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this document or any part of its contents. The use of this document should not be regarded as a substitute for the exercise by the recipient of his or her own judgement. Sarasin & Partners LLP and/or any person connected with it may act upon or make use of the material referred to herein and/or any of the information upon which it is based, prior to publication of this document. © 2023 Sarasin & Partners LLP – all rights reserved. Proprietary and confidential. Do not distribute without written permission. Last amended: 13/06/23 10:01 |
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05/03/2024