Fund Name | SRI Style | Product | Region | Asset Type | Launch Date | |
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BNY Mellon Sustainable Global Equity Fund |
ESG Plus | OEIC/Unit Trust | Global | Equity | 22/01/2018 | |
Fund Size: £68.19m Total screened & themed / SRI assets: £3633.63 Total Responsible Ownership assets: £83318.10 Total assets under management: £83318.10 As at: 31/03/23 Contact: Ryan Grey, Sales - Intermediary (UK) ryan.grey@bnymellon.com |
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OverviewThe Fund is an actively managed, high conviction strategy which invests in sustainable, responsibly managed companies. Our definition of active sustainable investing has the aim of:
(1) The MSCI AC World NDR performance benchmark is used as a comparator for this strategy. The strategy does not aim to replicate either the composition or the performance of the performance benchmark.
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FiltersFund informationSustainabilityLimits exposure to carbon intensive industries Sustainability theme or focus UN Global Compact linked exclusion policy Sustainability focus Encourage more sustainable practices through stewardship Transition focus Climate Change & EnergyClimate change / greenhouse gas emissions policy Invests in clean energy / renewables Clean / renewable energy theme or focus Energy efficiency theme Require net zero action plan from all/most companies Paris aligned fund strategy Encourage transition to low carbon through stewardship activity Social / EmploymentFavours companies with strong social policies Ethical Values Led ExclusionsAnimal welfare policy Tobacco and related product manufacturers excluded Armaments manufacturers avoided Alcohol production excluded Gambling avoidance policy Pornography avoidance policy Civilian firearms production exclusion Governance & ManagementAvoids companies with poor governance Encourage board diversity e.g. gender UN sanctions exclusion Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy Asset Size & MetricsInvests in small, mid and large cap companies Invests mostly in large cap companies How The Fund WorksBalances company 'pros and cons' / best in sector Limited / few ethical exclusions* Positive selection bias ESG weighted / tilt SRI / ESG / Ethical policies explained on website Intended Clients & Product OptionsIntended for investors interested in sustainability 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) Vote all* shares at AGMs / EGMs (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 Collaborations & AffiliationsPRI signatory Climate Action 100+ or IIGCC member Fund EcoMarket partner TNFD forum member (AFM company wide) Investment Association (IA) member AccreditationsUK Stewardship Code signatory (AFM company wide) Engagement ApproachRegularly lead collaborative ESG initiatives (AFM company wide) Engaging on climate change issues Engaging with fossil fuel companies on climate change Engaging to reduce plastics pollution / waste Engaging to encourage responsible mining practices Engaging on biodiversity / nature issues Engaging on human rights issues Engaging on labour / employment issues Engaging on diversity, equality and / or inclusion issues Engaging on governance issues Engaging on responsible supply chain issues Engaging to encourage a Just Transition Company Wide ExclusionsControversial weapons avoidance policy (AFM company wide) 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) Carbon transition plan published (AFM company wide) Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide) In-house carbon / GHG reduction policy (AFM company wide) Net Zero - have set a Net Zero target date (AFM company wide) Committed to SBTi / Science Based Targets Initiative TransparencyPublish full voting record (AFM company wide) Publish responsible ownership / stewardship report (AFM company wide) Full SRI policy information on company website Full SRI policy information available on request Net Zero transition plan publicly available (AFM company wide) |
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PolicyWe are aware that failure to consider ESG insights is likely to give an incomplete picture of the merits and risks of an investment opportunity. We believe that companies with good governance and a focus and strong track record of managing environmental and social issues are more likely to prove to be successful investments. Thus, we seek to consider the following factors, such as:
Red lines/hard exclusions** The Fund is subject to a set of exclusion criteria referred to as the ‘Red Lines’. These Red Lines include companies that are deemed to be harmful from an environmental or social perspective. The red lines consist of:
Precautionary pool For areas that have been identified as having controversies or the potential to cause harm (such as fossil fuels other than thermal coal, animal welfare, conventional defence, and nuclear power) but are not covered by the red lines, sustainable portfolio managers are alerted, when considering such investments, to review the controversial activity through what is referred to as the “precautionary pool”. The precautionary pool includes companies that have been flagged in relation to their involvement in heavy-emitting industries, hold exposures to activities that are red lined, but at lower revenue thresholds, and areas such as nuclear power and animal welfare, where there may be nuances in the investment case that are deemed important to be highlighted. The following types of businesses may be captured within the precautionary pool:
More information regarding the Fund’s ESG activities can be accessed via this link: https://www.newtonim.com/uk-institutional/special-document/ri-report-sustainable-global-equity/.
**We use a combination of external ESG service providers (currently MSCI, Sustainalytics and Vigeo Eiris).
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ProcessThe investment process for this Fund starts with the research process. Fundamental research is the lifeblood of Newton, and our multidimensional research platform aims to deliver insights in pursuit of better outcomes for our clients. One of the key inputs to our research process is our thematic research framework, which can help to shape our research agenda and support our portfolio construction. Our themes provide valuable inputs which help us to achieve long-term perspective and navigate a world in flux. They can alert the members of our investment team to the new We believe that themes – which represent powerful transformational ‘micro’ and ‘macro’ shifts across economies and industries – are only growing in importance, and that their influence on our investment landscape has never been greater. Themes can provide our investment team with a long-range lens to clearly view the structural changes that are taking place across the globe, and to look beyond often rigid classifications like sectors or countries of domicile. They can alert the team to the new opportunities that change creates and help us to identify the emerging risks that threaten to impair the value of investments. Guided by our themes, our analysts and portfolio managers aim to find the best investment ideas within their investment universe. Material and relevant ESG issues, risks and opportunities are considered in the process. When determining whether a company engages in "sustainable business practices," we consider which area of focus it falls under:
Portfolio construction The global opportunities team is responsible for the Sustainable Global Equity Fund, with Nick Pope and Paul Markham being responsible for this strategy. Our portfolio construction process is driven by bottom-up stock selection and exhibits high levels of active share. The portfolio managers are aware of the benchmark when they construct portfolios, but they have a high degree of freedom to deviate from it if their assessment of the fundamental opportunities and risks warrants it. Our active risk tends to come from stock selection; although at times of high conviction, sector and country allocation can be an important driver of returns. Our process is designed to facilitate natural debate and provides a powerful combination of perspectives from our specialist and generalist investment professionals challenging one another and it can help to maximise the scrutiny of interesting ideas. We believe our process strikes a good balance between accountability and high-conviction investing on the one side with team-based collaboration and collegial thinking on the other. The portfolio managers draw upon the output of our fundamental equity analysts and conduct their own research to ensure that the portfolio is composed of stocks in which we have strong conviction. Portfolios are constructed holistically, with no regional, sector or benchmark constraints and with the ability to invest anywhere. Sector and regional allocations may result as much from a series of stock selection decisions as from more top-down considerations. Diversification is achieved through having fewer than 50 stocks, with exposure to a variety of economies and industries. The portfolio managers carefully consider risk in the portfolio and make qualitative judgements on the impact new positions, exiting from current positions or existing market conditions would have on the overall portfolio. Newton does not have an investment committee that makes allocation decisions for portfolios. Final investment decisions for the Newton Sustainable Global Equity strategy are the responsibility of the lead portfolio managers.
Implementation of sustainable investment philosophy The sustainable investment philosophy is implemented consistently by NIM as follows:
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Resources, Affiliations & Corporate StrategiesRI Team Newton has a dedicated team of full-time RI analysts. The four-person team is embedded within Newton’s global research team and is led by Newton's head of sustainable investing, Andrew Parry. Andrew is responsible for developing our sustainable investment offering and communicating our approach to responsible investment to our global client base. The RI team further includes Ian Burger, head of responsible investment, and two RI analysts (Lloyd McAllister and Rebecca White). Additionally, Sakshi Bahl, an employee of BNY Mellon Operations India (based in Pune), provides research support to Newton’s RI team.
The RI team collaborates closely with the rest of our centralised global research team (which also consists of thematic, quant and strategy analysts as well as equity industry and credit analysts) to ensure that ESG risks and opportunities are fully understood and factored into the investment case for a company. The team also engages with portfolio managers to contribute to investment decisions, particularly within the sustainable strategy range.
List of Newton’s RI related memberships
PRI membership Newton have been a signatory of the UN Principles of Responsible Investment (PRI) since 2007, and we are ranked A+ across all areas of the PRI’s annual assessment.
Collaboration Where appropriate and aligned with the interests of our clients, we work with others across our industry and civil society (including other investors, industry bodies, non-governmental organisations, academics and other specialists) to ensure good oversight and regulation, and to drive the positive change that leads to better outcomes for stakeholders. This makes us better-informed and engaged participants in the broad dialogue on social and environmental issues.
In addition to our annual engagement priorities discussed in part one of the document, broad areas of focus for collaboration include promoting climate resilience, supporting diversity and inclusion, and preventing acts of modern slavery and human trafficking.
Among the many organisations with which we play an active role are the UN PRI, the International Corporate Governance Network, the Workforce Disclosure Initiative, the Transition Pathway Initiative, The Institutional Investors Group on Climate Change, and the Investment Association’s Stewardship Working Group. . Please Note: PRI A+ rated (AFM Company Wide): We were rated A+ in 2020 but recently PRI has changed their types of ratings. Please refer to our latest scores are detailed on our website here: https://www.newtonim.com/uk-institutional/responsible-investment/
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DialshifterOur organization is helping to support the Paris Climate Agreement and the Race to Net Zero by...
NIM became a signatory to the Net Zero Asset Managers Initiative in March 2021. We have published details of our approach here: https://www.newtonim.com/uk-institutional/insights/net-zero/. We have aligned ourselves with an independent methodology produced by the Science Based Targets initiative (SBTi). We are committing to having 50% of our financial emissions covered by credible net-zero plans by 2030, with the aim of reaching 100% by 2040. We seek to meet these headline targets via a range of transparent measures around investments in climate ‘solution providers’, engagement with fossil-fuel companies to support their energy transition and advocating for supportive government and industry regulation. |
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Literature
Dislaimer IMPORTANT INFORMATION BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and its subsidiaries. Issued in the UK by BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Conduct Authority. Assets under management (AUM) relates to the combined assets managed by the Newton Investment Management group. From 1 September 2021, Newton group of companies includes Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA). For a full list of risks applicable to this Fund, please refer to the Prospectus or other offering documents. Please refer to the prospectus and the KID/ KIID before making any investment decisions. Documents are available in English and an official language of the jurisdictions in which the Fund is registered for public sale. Go to www.bnymellon.com. Benchmark: The Fund will measure its performance against the MSCI AC World NR Index as a comparator benchmark (the"Benchmark"). The Fund will use the Benchmark as an appropriate comparator because it includes a broad representation of the asset class, sectors and geographical areas in which the Fund predominantly invests. The Fund is actively managed, which means the Investment Manager has absolute discretion to invest outside the Benchmark subject to the investment objective and policies disclosed in the Prospectus. While the Fund's holdings may include constituents of the Benchmark, the investment weightings in the portfolio are not influenced by the Benchmark. The investment strategy does not restrict the extent to which the Investment Manager may deviate from the Benchmark. The Fund is a sub-fund of BNY Mellon Investment Funds, an open-ended investment company with variable capital (ICVC) with limited liability between sub-funds. Incorporated in England and Wales: registered number IC27. The Authorised Corporate Director (ACD) is BNY Mellon Fund Managers Limited (BNY MFM), incorporated in England and Wales: No. 1998251. Registered address: BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Authorised and regulated by the Financial Conduct Authority. Fund performance calculated as total return, including reinvested income net of UK tax and charges, based on net asset value. All figures are in GBP terms. The impact of an initial charge (currently not applied) can be material on the performance of your investment. Further information is available upon request. Returns may increase or decrease as a result of currency fluctuations. Costs incurred when purchasing, holding, converting or selling any investment, will impact returns. Costs may increase or decrease as a result of currency and exchange rate fluctuations.
RISK WARNING - Objective/Performance Risk: There is no guarantee that the Fund will achieve its objectives. A complete description of risk factors is set out in the Prospectus in the section entitled "Risk Factors". Last amended: 06/10/23 09:36 |
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05/04/2024