As at: 31/12/24

Contact: james.brennan@cazenovecapital.com

Overview

Filters

Fund information

Policy

The Responsible Multi-Asset Fund is designed for charities who want to align their investments with their charitable mission and invest for a better future.

Our intention is for the fund to have a positive impact on people and the planet. We will invest Avoiding harm through ESG integration and exclusions, Benefiting society through responsible business activities and Contributing to solutions through investing for impact. We will also use our influence to push for progress towards the UN Sustainable Development Goals (SDGs).

We make the following commitments to:

Avoid harm:

• screening policy excluding areas of significant social or environmental harm
• integrate environmental, social and governance factors within the investment selection process, across all asset classes
• support the Paris Agreement on Climate Change by reducing total portfolio emissions and by purchasing high quality carbon offsets

Benefit society:

•  select global leaders in sustainability that promote social and economic development through responsible business activity

Contribute to solutions:

• allocate capital to address environmental and social need through thematic and impact investments
• manage, measure and report the impact of the Fund on people and the planet

Influence:

• seek to influence companies, managers and policy makers through engagement and voting, to encourage businesses to make progress towards the SDGs
• collaborate with others to maximise our influence

Carbon offsetting

To support our efforts to have a positive impact on the planet we offset the portfolio’s carbon emissions on a quarterly basis, based on scope 1 and 2 carbon emissions from the equities.

We work with social enterprise Ecologi, to buy carbon credits from environmental projects across the world, with a focus on reforestation and conservation of biodiverse forests. We will report on the environmental projects and their impact within our annual impact report. The cost of the projects will be paid for by the firm and no charge is passed to investors. Details of the carbon credits purchased and projects supported can be seen here.

Exclusions

The fund will not invest in companies which fail to meet the responsible investment criteria defined as companies involved in the following activities:

• alcohol (>10% revenues)
• armaments (>10% revenues)
• fossil fuels: extraction, production and refining of coal, oil and gas (>10% revenues)
• gambling (>10% revenues)
• high interest rate lending (>10% revenues)
• human embryonic cloning (>10% revenues)
• indiscriminate weaponry (no tolerance)
• pornography (>3% revenues)
• tobacco (>10% revenues)

The exclusions policy reflects common concerns of charities. It will be reviewed regularly and may be amended as considered necessary.

To aid diversification we will incorporate the use of pooled funds and third-party managers. As screening policies may differ, we will select funds that currently exhibit no exposure to the above sectors and will continue to monitor the underlying holdings for compliance.

Measuring impact on people and planet

Further to incorporating ESG analysis into our investment selection and holding impact investments, we aim to quantify our approach on the planet and its people. This approach is designed to help trustees understand and demonstrate the impact of their investment portfolio to stakeholders, benchmarked against a global equity index.

We use our proprietary award-winning impact measurement tool, SustainEx, to measure these factors. The tool evaluates such metrics as a company’s tax contributions, the salaries they pay, levels of workforce diversity as well as other unpriced social burdens such as contribution to obesity, smoking or workplace discrimination to understand how positive or negative a company’s operations are. Alongside these measures, positive social benefits might include connectivity, innovation, financial inclusion or medical provisions.

Process

The role of internal and external data sources

We have invested an extensive amount into ESG data collection. Our primary providers are MSCI, Sustainlytics and Refinitiv. We also source data from unique sources such as employee opinions on Glassdoor website and customer reviews from sites such as Trustpilot. We have a dedicated data insights team who coordinate deliverance of this data into our proprietary ESG tools. While this data is useful as part of our assessment, we strongly believe that in order to create a holistic view of the sustainability of an investment a manager must complete a qualitative assessment, supported by proprietary ESG tools and direct dialog with underlying investments.

Proprietary ESG tools

Our Sustainable Investment Team has developed a number of proprietary ESG tools to help our investment managers and analysts identify, understand and manage ESG risks and opportunities. CONTEXT and SustainEx, our flagship tools, are outlined below.

CONTEXT looks at logical and wide-ranging data to assess how a company’s relationship with its stakeholders (customers, suppliers, regulators, environment, employees, communities) and calculates a score for each company. The score will vary across investment strategies – CONTEXT is interactive and highly customisable, enabling analysts to select the most material ESG factors for each sector, weight their importance and apply relevant metrics. Analysts are then able to compare companies based on the metrics selected, their own company assessment scores or adjusted rankings (by size, sector or region). The unique features of the tool give analysts the flexibility to make company specific adjustments to reflect their specialist knowledge.

SustainEx is our award-winning impact measurement tool. It scientifically combines measures of both the harm companies can do and the good they can bring to arrive at an aggregate measure of each firm’s social and environmental impact, allowing investors to target their ESG investments effectively. It quantifies the extent to which companies are in credit or deficit with the societies to which they belong, and the risks they face if the costs they externalise are pushed into companies’ own costs.

Resources, Affiliations & Corporate Strategies

We are committed to accelerating positive change, by allocating capital away from harmful businesses and towards those companies that contribute to solutions. Schroders has been named as one of the world’s most influential financial companies making a meaningful contribution to achieving the UN Sustainable Development Goals (Source: World Benchmarking Alliance). Furthermore, we have been awarded A+ for the last six consecutive years by the UNPRI assessment. By partnering with us, you are able to make a real difference.

We benefit from the resources of the award-winning sustainability team of dedicated ESG specialists, who coordinate our engagement, voting and sector research. Using our influence for good is a priority for us. We recognise that companies play a critical role in society and are exposed to, and can influence, social and environmental change. We report on all engagement activities within our quarterly sustainability reports, including more detailed reports for clients. We also disclose our voting activity publicly, including details of votes against management. The reports are publicly available on our website.

Furthermore, we look to expand our influence across the investment industry and to engage with all asset managers in whose funds we invest. We have provided a snapshot of our activities and capabilities in this area.

Literature

• Fund overview & literature (including factsheet)

Last amended: 15/04/24 10:46