Fund Size: £185.00m

Total screened & themed / SRI assets: £185.00

Total Responsible Ownership assets: £1000.00

Total assets under management: £25300.00

As at: 28/02/22

Overview

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Fund information

Policy

The Charity Assets Trust follows a detailed responsible investment policy which imposes restrictions on investment in: Tar sands, thermal coal, alcohol, armaments, gambling, pornography, and tobacco.

The fund also follows a proactive voting and engagement approach with companies held and the fund managers work closely with the Responsible Investment team to implement the stewardship policy.

We vote on all shareholdings in the fund. We also monitor the fund against UN Global Compact principles, MSCI’s ESG Metrics and its carbon intensity, using this to inform both the investment and engagement process. This policy has been shaped in conjunction with our investors and we believe it is effectively aligned with their objectives and concerns.

Process

The managers of the Charity Assets Trust will review each new idea (which has already been through our extensive in-house research process, see below) on a case by case basis. The merits of the investment case raised in the review process are considered alongside additional ESG metrics related to the responsible investment policy of the CAT. These include:

• Ethical screens: Against the ethical restrictions of the fund
• Carbon intensity: The weighted average carbon intensity of the company is recorded and the potential impact on the fund’s overall carbon intensity is assessed
• ESG rating: This is considered in the context of the company peers
• UN Global Compact screen: Detailing any MSCI red flags and ongoing controversies

If a company breaches the Charity Assets Trust ethical screen, it is immediately excluded from purchase within the fund; a block on our in-house dealing system that can only be lifted by compliance ensures that we cannot invest in such a stock accidently.  Where a stock passes the ethical criteria we have to provide evidence to compliance via MSCI ESG Manager, our third-party tool used to screen stocks, and store this evidence.  We also understand that a company at point of purchase may not breach the ethical policy of the fund but over time it may do, via acquisitions, launching of new products, poor business practices or more.  Therefore we review the holdings of the fund every quarter on MSCI to ensure they still comply with the ethical screen.

Where a company has serious ongoing controversies or consistent breaches of the UN Global Compact, further detail is obtained on the severity and potential impact of these matters. At this point, a stock which does not necessarily breach the Charity Assets Trust’s ethical screen may be excluded from purchase if certain ESG issues are deemed to seriously conflict with the fund’s purpose and priorities. Where an investment is made in a company with an ESG rating of B or CCC, or which fails to comply with the principles of the UN Global Compact, we are committed to engaging with management teams to better understand the issues.

If a stock is incorporated into portfolios, ESG risks and opportunities will then be raised in periodic conviction reviews as they continue to evolve. We look to engage with management of companies proactively, to continue to improve our understanding of the material ESG risks to the company, challenge their behaviour in relation to ESG and increase their awareness of regulatory and societal changes, all of which is likely to result in superior outcomes and returns for our clients. We do not short stocks, and therefore have a vested interest to work with management over the long term to improve their governance and oversight of ESG issues.

Resources, Affiliations & Corporate Strategies

ESG across the firm

Ruffer firmly believes that considering all relevant environmental, social and governance (ESG) factors associated with a company is vital to understanding its risks and opportunities. An advantage afforded by our single investment approach and in-house research is that ESG issues can be integrated throughout the investment process.

We have a dedicated team who coordinate Ruffer’s ESG framework, led by Franziska Jahn-Madell, Director for Responsible Investment. Franziska and her team of 3 sit across our in-house research and fund management teams. They are complemented by two senior research analysts appointed as ESG representatives and 8 ESG ‘champions’ across the portfolio management teams to ensure full cohesion and integration from investment idea to implementation within portfolios.

Stewardship

Direct communication with a company is a fundamental part of Ruffer’s investment effort. We meet with executives and board directors; we communicate with the company’s advisors; and we engage with other shareholders where appropriate. We regularly monitor and engage with companies on ESG issues including culture, board composition, succession planning, and remuneration, environmental and social responsibility that we perceive to affect their value. We generally support climate change related shareholder resolutions and have voted in matters concerning climate change, HFC emissions water scarcity and other environmental pollution.

In terms of collaborative engagement, we have joined the Transition Pathway Initiative and Climate Action 100+, which assess how companies are preparing for the transition to a low-carbon economy. Ruffer is also a signatory to the:

• UNPRI
• CDP (formerly the Carbon Disclosure Project)
• Climate Change initiatives – UNPRI signatory (rated A), IIGCC, TPI, Climate Action 100+ and a supporter of the ‘Aiming for A’ investor coalition
• UK Stewardship Code and Japan Stewardship Code

For greater detail on our commitment to responsible investing and our recent engagement, please visit https://www.ruffer.co.uk/About/Responsible-investing.

Literature

• Fund overview & literature (including factsheet)
• Fund ethical policy details
• Responsible Investing

Last amended: 11/01/24 12:33