Fund Size: £699.00m

Total screened & themed / SRI assets: £49415.00

Total Responsible Ownership assets: £174795.00

Total assets under management: £224615.00

As at: 31/07/24

Contact: lrichards@pictet.com

Overview

Filters

Fund information

Policy

We believe that our food systems are the single biggest lever we have available to address both our most pressing environmental and social challenges simultaneously.

The nutrition theme lies at the intersection of five megatrends. We believe that the secular growth of these megatrends are drivers of the long-term performance of companies within the Nutrition theme superior to that of the global economy. By actively selecting the best stocks out of a broad and dynamic investment universe, we intend to construct a portfolio with superior risk/return characteristics compared to global equities.

Focus on health: In 2013, around 20% of all deaths across the globe could be attributed to poor diets. The increased focus of both governments and consumers on the benefits of food with higher nutritional value is having a positive global impact on health.

• Demographic development: By 2030, the world’s urban population is predicted to swell by 1.4 billion, led by increases in China and India. Although urbanisation can improve people’s quality of life, offer economies of scale and reduce the cost of delivering basic services, the dislocation of food production from where it is needed could lead to new challenges when it comes to feeding humanity.
• Globalisation: Global interconnectedness and people’s growing taste for foods from different cultures are driving increased worldwide trade in food produce. The value of global exports of agricultural products has risen at twice the rate of economic growth since the 1960s.
• Sustainability: Up to 30 per cent of all the food the world produces goes to waste, at a loss of over USD 750 billion – more than Switzerland’s GDP in 2014. A sustainable solution must be found to produce, distribute and store food more effectively.
• Technological development: Technological innovation supports supply-side production increases through the development of precision agriculture, advances in plant health, and more environmentally friendly solutions on the farm.

As a consequence, we believe that the nutrition value chain is likely to offer attractive and sustainable investment opportunities for decades to come.

Process

Starting from a global equity database of listed companies, we identify an initial universe of companies active in Nutrition-related activities. The companies’ business models must be related to activities in the food value chain (i.e. generate a significant portion of their enterprise value, sales or EBITDA from activities improving quality, access to, or sustainability of food produce.

We identify an initial universe of listed companies that are helping to improve quality, access to, or sustainability of food production.

Defining the theme ensures that only companies with sufficient exposure to Nutrition-related activities are eligible for investment. We include companies in the investable universe only if a significant portion of the sales (or Enterprise Value, EBIT or EBITDA) is derived from nutrition-related activities (“purity” to the theme).

The Nutrition strategy exclude activities that do not improve the future of nutrition (i.e. food necessary for health and growth) from the calculation of a company’s purity. This applies to activities such as the production of unhealthy snacks, carbonated soft drinks, alcoholic beverages, non-certified palm oil or red meat.

By applying the positive screen, we narrow the universe down from 40,000 to 200 companies.

When defining the investment universe of Thematic strategies, we systematically exclude stocks that have negative impacts on the environment or society. For Nutrition, we especially exclude companies that have negative side effects on human or planetary health such as alcohol, tobacco production or pesticides. If a company’s revenues generated by such activities are above the threshold, the company is excluded from the universe.

We also exclude companies in severe material breach of UN Global Compact Principles on human rights, labour standards, environmental protection and anti-bribery/corruption.

Exclusions are based on reliable sources gathered from reputable third-party research providers. Pictet AM retains full discretion over exclusions and always reserves the right to deviate from third party information on a case by case basis.

We monitor the exposure to all activities that might be perceived as controversial by some investors. We use Sustainalytics as our external data provider and enhance it with company disclosures and our own research.

Resources, Affiliations & Corporate Strategies

Pictet Asset Management has a dedicated ESG Team which leads and co-ordinates implementation of our responsible investment policy, including ESG integration in investment processes, ownership practices, risk management and reporting tools. The ESG Team reports directly to Sébastien Eisinger, Managing Partner Pictet Group, Co-CEO Pictet Asset Management and Head of Investments.

Key responsibilities include:

Investments

• Selection and due-diligence of external data providers in collaboration with investment teams and other B/Ls
• Development of proprietary assessment methodologies (eg sector-specific “E&S Deep Dives”, sovereign issuers)
• Integration of relevant ESG datasets in IT systems and definition of quality checks
• Training and awareness raising of investment teams

Active Ownership

• Definition of engagement strategy and proxy voting policy
• Co-ordinate targeted engagements and participation in collaborative initiatives
• Consensus building between investment teams on specific resolutions

Pictet Asset Management has been a signatory of the UNPRI since 2007. In addition, Pictet Asset Management actively participates in several investor initiatives aimed at sharing best practices between asset managers and owners and encouraging corporate disclosure on ESG issues. We are notably involved in the IIGCC (Institutional Investors Group on Climate Change), SSF (Swiss Sustainable Finance) and similar organisation in the UK, Germany and Spain.

Pictet Group and / or Pictet Asset Management supports and actively participates in international and national initiatives, organisations and partnerships including the below (which indicates Pictet’s involvement, year joined and key areas of focus) :

• FNG, SpainSIF: Member (2006) - Transparency on ESG
• UNPRI: Signatory (2007) - Transparency on ESG
• Copenhagen Institute for Futures Studies (CIFS): Member, Research Partnership: Megatrends Research (2007) - Interdisciplinary academic disciplines
• CDP: Member (2007) - Carbon
• Swiss Climate Foundation: Corporate sponsor (2008) - Climate
• Sustainable Finance Geneva (SFG): Institutional Partner (Pictet Group), President Strategy and Surveillance Committee (2008) - Promotion of sustainable finance
• EFAMA (European Fund and Asset Management Association): Member of the Stewardship Market Integrity & ESG Investment Standing Committee (2010) - Fund and Asset Management
• Climate Bond Initiative: Member of the Standards Board (2013) - Climate
• IIGCC (Institutional Investors Group on Climate Change): Member of the Adaptation & Resilience Working Group (2013) - Climate
• FTSE Environmental Markets: Member of the Advisory Committee (2013) - Environment
• Swiss Sustainable Finance (SSF): Founding member (2014) - Promotion of the integration of sustainability in the financial industry
• JP Stewardship Code: Signatory (2014) - Stewardship standards
• Stockholm Resilience Centre (SRC): Research Partnership: Planetary Boundaries Framework (from 2014-ongoing), Mistra Biodiversity Finance programme (from 2022) (2014) - Core focus is to advance research in the frontier of biosphere-based sustainability science, applying a social ecological approach and resilience thinking
• Investment Association: Member of the Sustainability and Responsible Investment Committee (2018) - Stewardship and Corporate governance
• Climate Action 100+: Collaborative Engagement (2018) - Climate
• Access to Nutrition Initiative (ATNI): Signatory (Pictet Group) (2018) - Delivery of nutritious, affordable foods.
• Empower: Partnership (2019) - Youth at Risk
• UNEP Finance Initiative: Signatory (Pictet Group) (2019) - Environment
• Task Force on Climate-related Financial Disclosures (TCFD): Signatory (2020) - Consistent climate-related financial risk disclosures
• FAIRR: Member (2021) - Animal agriculture
• ICGN (International Corporate Governance Network): Member (2021) - Governance
• Science Based Targets Initiative (SBTI): Signatory (Pictet Group) (2021) - Climate
• Net Zero Asset Managers Initiative: Signatory (Pictet Group) (2021) - Climate
• ESG Data Convergence Project: Steering Committee member (Pictet Group) (2021) - ESG metrics
• UN Principles on Responsible Banking: Signatory (Pictet Group) (2021) - Sustainable/responsible banking
• UK Stewardship Code 2020: Signatory (2022) - Stewardship standards
• Institute of International Finance (IIF): Research Partnership: Bonds that build back better (2022) - Green, transition, social, sustainability & sustainability-linked bonds
• Responsible Investing Association (RIA): Member (2022) - Canada's industry association for responsible investment
• Ceres Valuing Water Finance Initiative: Signatory (Pictet Group) (2022) - Water
• Finance for Biodiversity Foundation: Member (Pictet Group); participants in the Impact Assessment and Engagement Working Groups. (2022) - Biodiversity
• Taskforce for Nature-related Financial Disclosures (TNFD): Member of TNFD Forum (Pictet Group) (2022) - Risk management and disclosure framework on nature-related issues
• UN Global Compact: Signatory (Pictet Group) (2022) - Global sustainability principles

Source: Pictet Asset Management, [April 2023]

Other industry associations:

• Asset Management Association Switzerland (AMAS): Member (Pictet Group), Member of the Distribution, Taxes Specialist Committees (1993) - Swiss Asset Management industry development
• German Investment Funds Association (BVI): Member (2004) - German Asset Management industry development
• International Capital Markets Association (ICMA): Member (xx) Securities market

Furthermore, Pictet, together with Swiss Sustainable Finance, was leading an initiative to put pressure on index providers to remove controversial weapon manufacturers from mainstream indices. The initiative, launched in August 2018, secured the backing of 174 signatories controlling over USD 9.7 trillion and including international asset owners and managers (as of January 2020). This initiative has now been closed due to inclusion of controversial weapons exposure disclosures in draft RTS and EU Benchmarking regulation.

Literature

• Fund overview & literature (including factsheet)
• PAM Responsible Investment Policy

Last amended: 25/01/24 10:46