Schroder BSC Social Impact Trust
SRI Style:
Social Style
SDR Labelling:
Sustainability Impact label
Product:
Investment Trust
Fund Region:
UK
Fund Asset Type:
Equity
Launch Date:
22/12/2020
Last Amended:
Jan 2024
Dialshifter (
):
Fund Size:
£90.30m
(as at: 31/12/2022)
Total Screened Themed SRI Assets:
£90.30m
Total Responsible Ownership Assets:
£825.00m
Total Assets Under Management:
£915.30m
ISIN:
GB00BF781319
Contact Us:
Objectives:
The Company’s investment objective is to deliver measurable positive social impact as well as long term capital growth and income, through investing in a diversified portfolio of private market impact funds, co-investments alongside impact investors and direct investments in order to gain exposure to private market Social Impact Investments.
Sustainable, Responsible
&/or ESG Overview:
The Company invests in impact driven organisations benefiting vulnerable and disadvantaged people in areas of high need, including housing, health, social care, education & skills. All investments must demonstrate significant and measurable positive outcomes, as well as robust processes for managing impact and mitigating impact risks.
The Company’s strategy is based on first developing a deep understanding of the social issue and the sustainable enterprise solutions that can bring about change. It then designs and improves investment routes that can bring together the needs of enterprises and investors. In the process of building these investment routes, the Company actively engages with managers to understand and support the development of their impact approach. By taking an impact-driven approach the Company signals that impact matters to other investors. BSC believes sustainable solutions can more readily attract capital and ultimately grow to have the largest impact on people's lives.
Primary fund last amended:
Jan 2024
Information directly from fund manager.
Fund Filters
Sustainability - General
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Fund has a strategy that focuses on sustainability issues in the property sector - they may eg use GRESB / BREEAM scores to inform investment decisions.
Environmental - General
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Climate Change & Energy
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Funds that hold companies in the clean energy and renewable energy sectors (at the time research was supplied). Fund strategies vary, in particular the proportion of investment in these areas may vary significantly. Check fund literature for details.
The fund manager excludes companies with indirect involvement in fossil fuel exploration. For example they would be expected to exclude banks and insurance companies that are effectively enabling new coal, oil and or gas reserves to be discovered and in due course extracted through the provision of necessary finance or services.
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/
Social / Employment
Find individual funds that have a written diversity policy – where the fund manager will aim to select companies with a carefully considered, sound approach to diversity. This should ideally cover a range of issues including gender, ethnicity, disability, beliefs, sexual orientation, etc.
Ethical Values Led Exclusions
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Human Rights
Find funds with policies that exclude companies or other assets where regimes are not democratic, or where people may be oppressed. May use eg. Freedom House research. Strategies vary. See fund literature for further information.
The fund has a policy which excludes assets with involvement in Modern Slavery
Meeting Peoples' Basic Needs
Find funds that invest in social housing property freeholds. Strategies vary. See fund literature for further information.
Find funds that have significant investment in social housing or similar assets.
Find funds that invest in ‘social bonds’ which raise funds for the purpose of financing projects with positive social (people related) outcomes.
Governance & Management
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Fund Governance
Find funds that have an external committee that helps steer or advise fund managers on SRI policy or strategy related issues. These people may be paid for their time but are not employees of the fund manager.
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
Asset Size
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies.
Targeted Positive Investments
Find funds that invest >25% of their capital towards companies where a major part of their business is focused on helping to address environmental or social challenges.
Find funds that invest >50% of their capital in companies where a major part of their business is focused on helping to address environmental or social challenges.
Impact Methodologies
Funds that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Funds that are specifically marketed as ‘Impact investments funds' will work to deliver both financial performance and specific, measurable positive, real world social and/or environmental benefits. Strategies vary.
Find funds that specifically state that they aim to deliver positive social (i.e. people related) impacts and/or outcomes.
Find funds that invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
50% of fund assets are regarded by the fund manager as being significantly focused on providing solutions to environmental or social challenges. Strategies vary.
How The Fund Works
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
Unscreened Assets & Cash
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation.
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Finds funds designed to meet the needs of individual investors with an interest in ‘Impact investment funds’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Labels & Accreditations
Find funds that have chosen to adopt one of the Financial Conduct Authority (FCA) SDR labels. Please note: there are a range of reasons why potentially relevant funds may not use an SDR label eg. adopting a label may be work in progress, the manager may not yet be allowed to do so because of the product type, a manager may feel their fund is insufficiently aligned to SDR requirements. Read fund literature and / or our blogs for further information.
Fund Management Company Information
About The Business
Find fund management companies (or subsidiaries) that specialise in - or focus entirely on - investing in assets that are helping to deliver positive environmental and / or social impacts.
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Find fund management companies that aim to align all their investments (across all funds) to help meet the aims of the UN Sustainable Development Goals.
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Find fund management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide).
Collaborations & Affiliations
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Resources
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Engagement Approach
Asset manager has a responsible ownership / stewardship strategy which means they are working to encourage the shift to more sustainable business practices in ways that respect and are sensitive to social issues and the impact change has on people effected by the changes that are taking place. https://www.transitionpathwayinitiative.org/ https://transitiontaskforce.net/
Asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
Company Wide Exclusions
Find fund management companies that avoid investment in tobacco (manufacturing) companies across all their assets.
Find fund management companies that avoid investment in fossil fuel companies (e.g. coal, oil and gas) across all of their funds. (and/ or other assets.)
Transparency
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Sustainable, Responsible &/or ESG Policy:
The Company’s core goal is to deliver positive impact for people alongside strong financial returns for investors. High quality assessment and management of environmental, social and governance (“ESG”) risks and impacts is fundamental to achieving this goal.
Big Society Capital’s Responsible Investment Policy details the approach the Company takes to assess and manage risk across its social impact investment portfolio. This Policy is integrated in the Company’s investment process from due diligence to portfolio management.
The Policy complements the Company’s dedicated impact assessment and management approach (focused on many aspects of Social and Environmental risk), Organisational Due Diligence approach and ongoing intermediary support via the Building Blocks Framework (covering aspects of Governance risks amongst others). The Policy is underpinned by nine core responsible business principles and can be found on the website here.
In addition to the core principles above, Big Society Capital considers material risks by sector drawing on external frameworks were appropriate. For example, Big Society Capital has been active in the development of the Sustainability Reporting Standard for Social Housing (esgsocialhousing.co.uk).
The Responsible Investment Policy applies to Big Society Capital’s conduct as a business and in its making and management of its investments.
Fund managers in the core portfolio that receive investment and the charities and social enterprises these Fund Managers in turn invest into are required to sign up to these or a similar set of principles and exclusion list.
Process:
ESG factors are incorporated into all stages of the Company’s investment process and decision-making. As part of the origination process, deal teams identify material ESG areas for the specific prospective investment.
These issues are presented, together with other areas for further exploration, to the Company’s Investment Committee for formal approval before further diligence is conducted. In the due diligence stage, deal teams draw on several sources of data, including bespoke proprietary tools, to form a view on whether any significant ESG risks are present. The findings of this analysis are presented alongside the overall investment recommendation to the Company’s Investment Committee for final approval. Where any significant risks are identified, this will include a proposed mitigation or monitoring plan.
Following the approval of an investment, the Company requires investees to adopt and adhere to Big Society Capital’s Responsible Business Principles or an equivalent standard, as well as ensure their own investees do so. Where formal legal agreement is not possible or practicable, the deal team is required to conduct a gap or equivalency analysis of the investee’s existing policies and processes to ensure they meet the Company’s required standard.
Guidance and training to the investment team is provided by the impact team to ensure consistent application and implementation of BSC’s ESG approach.
Big Society Capital takes a fundamental approach to investment analysis, including of impact and ESG. It draws on a range of information sources (both qualitative and quantitative) which are most appropriate for the investment under consideration, taking into account as is applicable the business model, industry, and issue area.
Big Society Capital does not use third party ESG data or rating providers as it does not believe these are well suited to its core investments as they are largely private markets with a focus on relatively smaller companies that these providers cover.
Big Society Capital will continue to review the appropriateness of external frameworks and emerging best practice on the use of ESG data.
Resources, Affiliations & Corporate Strategies:
Big Society Capital's Chief Investment Officer Jeremy Rogers is the sponsor of the ESG process with operational oversight by the Head of Impact and Head of Investment Management. Impact and ESG are fully integrated into the BSC investment process and across the investment team. Deal owners are responsible for analysing and managing the financial and impact outcomes & ESG risks for an investment. The Impact Team provides specific support to BSC's deal teams on complex investment and strategic reviews of areas or asset classes along impact and ESG lines. Big Society Capital hired an ESG and EDI Manager in 2022 to support deal teams in the implementation of this approach.
Listed below are the related affiliations and involvement with groups and frameworks that inform BSC’s impact management and ESG approach:
Impact Management Project Framework
Big Society Capital adopts the Impact Management Project framework as the emerging global standard for managing and articulating social impact. The Company aims to demonstrate measurable positive outcomes through transparent reporting, aligned with the UN Sustainable Development Goals and the Impact Management Project. Given Big Society Capital’s focus is on creating positive, intended impact for people, Big Society Capital has prioritised playing an active role in supporting and championing the Impact Management Project including as an Advisory Board member, as well as the Operating Principles for Impact Management (outlined further below).
Using the Impact Management Project’s ABC framework as a basis, the Company's investments are expected to be "high impact" on the basis that they are expected to sit within "Category C", "Contribute to Solutions".
The Company also assesses all investments, considering the five dimensions of impact set out by the Impact Management Project detailed as follows:
- What: Important positive outcomes, meaningful to those experiencing the issue and addressing at least one SDG. Typically demonstrated by the provision of essential services, including affordable housing, education and training, health, care and rehabilitation
- Who: Beneficiaries, who are underserved in relation to the respective outcome and/or vulnerable individuals. Typically demonstrated by focusing on more economically deprived areas and marginalised groups, for example women and children at risk of domestic abuse
- How much: Significant depth of impact, in making meaningful improvements for people, and/or high scale of impact, through reaching a large number of people. Typically demonstrated by provision of intensive and/or sustained long-term services, such as affordable housing (depth) or provision of energy efficiency and fuel poverty services to thousands of lower income households (scale)
- Contribution: Significant improvement or additional benefit as a result of investment and activities. Typically demonstrated by interventions that have a clearly defined capital need, which will enable delivery of high-impact solutions at improved scale, quality and cost
- Risks: Fund managers must assess and mitigate the risks that may prevent the intended outcomes occurring. Typically demonstrated by fund managers and enterprises with strong track records and networks, and robust impact management processes.
Operating Principles for Impact Management
Big Society Capital has been a signatory to the Operating Principles for Impact Management since March 2020. The nine Principles provide a framework that brings greater discipline and transparency around impact management practices to the impact investing market. Big Society Capital’s alignment with the Principles is documented and independently verified in its disclosure and verification statement[1].
UN Principles for Responsible Investment (PRI)
Big Society Capital is a signatory to the PRI. Key UN PRI principles applied by the Company include:
- Principle 1 – Big Society Capital has incorporated ESG issues into its investment analysis and decision making with bespoke tools to test its Principles outlined in the Responsible Investment Policy.
- Principle 2 – It is an active investor and has integrated ESG into its engagement approach to support improved outcomes from its fund managers.
- Principle 3 – It is seeking active disclosure on ESG issues for all listed direct and indirect investments for the Trust, and where ESG issues are material for those investments in its core mandate such as High Impact Housing.
Asset-class specific initiatives
Big Society Capital has been active in the development of the Sustainability Reporting Standard for Social Housing, which is applied to Company investments in the housing sector. The organisation also participates in asset class-wide initiatives, for example, the Equity Impact Project with respect to housing funds, as well as VentureESG and DiversityVC with respect to venture funds.
[1] https://bigsocietycapital.com/latest/aligning-our-impact-management-approach-impact-principles/
Literature
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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|---|---|---|---|---|---|---|---|---|
Schroder BSC Social Impact Trust |
Social Style | Sustainability Impact label | Investment Trust | UK | Equity | 22/12/2020 | Jan 2024 | |
ObjectivesThe Company’s investment objective is to deliver measurable positive social impact as well as long term capital growth and income, through investing in a diversified portfolio of private market impact funds, co-investments alongside impact investors and direct investments in order to gain exposure to private market Social Impact Investments.
|
Fund Size: £90.30m (as at: 31/12/2022) Total Screened Themed SRI Assets: £90.30m (as at: 31/12/2022) Total Responsible Ownership Assets: £825.00m (as at: 31/12/2022) Total Assets Under Management: £915.30m (as at: 31/12/2022) ISIN: GB00BF781319 Contact Us: sami.arouche@schroders.com |
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Sustainable, Responsible &/or ESG OverviewThe Company invests in impact driven organisations benefiting vulnerable and disadvantaged people in areas of high need, including housing, health, social care, education & skills. All investments must demonstrate significant and measurable positive outcomes, as well as robust processes for managing impact and mitigating impact risks. The Company’s strategy is based on first developing a deep understanding of the social issue and the sustainable enterprise solutions that can bring about change. It then designs and improves investment routes that can bring together the needs of enterprises and investors. In the process of building these investment routes, the Company actively engages with managers to understand and support the development of their impact approach. By taking an impact-driven approach the Company signals that impact matters to other investors. BSC believes sustainable solutions can more readily attract capital and ultimately grow to have the largest impact on people's lives.
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Primary fund last amended: Jan 2024 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Encourage more sustainable practices through stewardship
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
UN Sustainable Development Goals (SDG) focus
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Green / Sustainable property strategy
Fund has a strategy that focuses on sustainability issues in the property sector - they may eg use GRESB / BREEAM scores to inform investment decisions. Environmental - General
Limits exposure to carbon intensive industries
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details. Climate Change & Energy
Coal, oil & / or gas majors excluded
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Energy efficiency theme
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invests in clean energy / renewables
Funds that hold companies in the clean energy and renewable energy sectors (at the time research was supplied). Fund strategies vary, in particular the proportion of investment in these areas may vary significantly. Check fund literature for details.
Fossil fuel exploration exclusion – indirect involvement
The fund manager excludes companies with indirect involvement in fossil fuel exploration. For example they would be expected to exclude banks and insurance companies that are effectively enabling new coal, oil and or gas reserves to be discovered and in due course extracted through the provision of necessary finance or services.
TCFD reporting requirement (Becoming IFRS)
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/ Social / Employment
Diversity, equality & inclusion Policy (fund level)
Find individual funds that have a written diversity policy – where the fund manager will aim to select companies with a carefully considered, sound approach to diversity. This should ideally cover a range of issues including gender, ethnicity, disability, beliefs, sexual orientation, etc. Ethical Values Led Exclusions
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Alcohol production excluded
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Gambling avoidance policy
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Pornography avoidance policy
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Oppressive regimes (not free or democratic) exclusion policy
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Modern slavery exclusion policy
The fund has a policy which excludes assets with involvement in Modern Slavery Meeting Peoples' Basic Needs
Invests in social property (freehold)
Find funds that invest in social housing property freeholds. Strategies vary. See fund literature for further information.
Invests > 5% in social housing
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Invests > 5% in social bonds
Find funds that invest in ‘social bonds’ which raise funds for the purpose of financing projects with positive social (people related) outcomes. Governance & Management
Avoids companies with poor governance
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Encourage higher ESG standards through stewardship activity
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Fund Governance
Employ external (fund) oversight or advisory committee
Find funds that have an external committee that helps steer or advise fund managers on SRI policy or strategy related issues. These people may be paid for their time but are not employees of the fund manager.
ESG integration strategy
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature. Asset Size
Invests in small, mid and large cap companies / assets
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies. Targeted Positive Investments
Invests >25% of fund in environmental/social solutions companies
Find funds that invest >25% of their capital towards companies where a major part of their business is focused on helping to address environmental or social challenges.
Invests >50% of fund in environmental/social solutions companies
Find funds that invest >50% of their capital in companies where a major part of their business is focused on helping to address environmental or social challenges. Impact Methodologies
Aims to generate positive impacts (or 'outcomes')
Funds that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Measures positive impacts
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Described as an ‘impact investment fund’
Funds that are specifically marketed as ‘Impact investments funds' will work to deliver both financial performance and specific, measurable positive, real world social and/or environmental benefits. Strategies vary.
Positive social impact theme
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Invests in social solutions companies
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Aim to deliver positive impacts through engagement
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
Over 50% in assets providing environmental or social ‘solutions’
50% of fund assets are regarded by the fund manager as being significantly focused on providing solutions to environmental or social challenges. Strategies vary. How The Fund Works
Positive selection bias
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Negative selection bias
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Assets mapped to SDGs
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Focus on ESG risk mitigation
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies). Unscreened Assets & Cash
All assets (except cash) meet published sustainability criteria
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation. Intended Clients & Product Options
Intended for investors interested in sustainability
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Intended for clients who want to have a positive impact
Finds funds designed to meet the needs of individual investors with an interest in ‘Impact investment funds’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information. Labels & Accreditations
SDR Labelled
Find funds that have chosen to adopt one of the Financial Conduct Authority (FCA) SDR labels. Please note: there are a range of reasons why potentially relevant funds may not use an SDR label eg. adopting a label may be work in progress, the manager may not yet be allowed to do so because of the product type, a manager may feel their fund is insufficiently aligned to SDR requirements. Read fund literature and / or our blogs for further information. Fund Management Company InformationAbout The Business
Specialist positive impact fund management company
Find fund management companies (or subsidiaries) that specialise in - or focus entirely on - investing in assets that are helping to deliver positive environmental and / or social impacts.
Responsible ownership / stewardship policy or strategy (AFM company wide)
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
SDG aligned aims / objectives (AFM company wide)
Find fund management companies that aim to align all their investments (across all funds) to help meet the aims of the UN Sustainable Development Goals.
Integrates ESG factors into all / most (AFM) fund research
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM company wide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Diversity, equality & inclusion engagement policy (AFM company wide)
Find fund management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide). Collaborations & Affiliations
PRI signatory
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'. Resources
In-house responsible ownership / voting expertise
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards. Engagement Approach
Engaging to encourage a Just Transition
Asset manager has a responsible ownership / stewardship strategy which means they are working to encourage the shift to more sustainable business practices in ways that respect and are sensitive to social issues and the impact change has on people effected by the changes that are taking place. https://www.transitionpathwayinitiative.org/ https://transitiontaskforce.net/
Engaging on diversity, equality and / or inclusion issues
Asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets Company Wide Exclusions
Tobacco avoidance policy (AFM company wide)
Find fund management companies that avoid investment in tobacco (manufacturing) companies across all their assets.
Fossil fuel exclusion policy (AFM company wide)
Find fund management companies that avoid investment in fossil fuel companies (e.g. coal, oil and gas) across all of their funds. (and/ or other assets.) Transparency
Full SRI / responsible ownership policy information on company website
Find companies that publish information about their sustainable and responsible investment strategies on their company website. Sustainable, Responsible &/or ESG Policy:The Company’s core goal is to deliver positive impact for people alongside strong financial returns for investors. High quality assessment and management of environmental, social and governance (“ESG”) risks and impacts is fundamental to achieving this goal. Big Society Capital’s Responsible Investment Policy details the approach the Company takes to assess and manage risk across its social impact investment portfolio. This Policy is integrated in the Company’s investment process from due diligence to portfolio management. The Policy complements the Company’s dedicated impact assessment and management approach (focused on many aspects of Social and Environmental risk), Organisational Due Diligence approach and ongoing intermediary support via the Building Blocks Framework (covering aspects of Governance risks amongst others). The Policy is underpinned by nine core responsible business principles and can be found on the website here. In addition to the core principles above, Big Society Capital considers material risks by sector drawing on external frameworks were appropriate. For example, Big Society Capital has been active in the development of the Sustainability Reporting Standard for Social Housing (esgsocialhousing.co.uk). The Responsible Investment Policy applies to Big Society Capital’s conduct as a business and in its making and management of its investments. Fund managers in the core portfolio that receive investment and the charities and social enterprises these Fund Managers in turn invest into are required to sign up to these or a similar set of principles and exclusion list.
Process:ESG factors are incorporated into all stages of the Company’s investment process and decision-making. As part of the origination process, deal teams identify material ESG areas for the specific prospective investment. These issues are presented, together with other areas for further exploration, to the Company’s Investment Committee for formal approval before further diligence is conducted. In the due diligence stage, deal teams draw on several sources of data, including bespoke proprietary tools, to form a view on whether any significant ESG risks are present. The findings of this analysis are presented alongside the overall investment recommendation to the Company’s Investment Committee for final approval. Where any significant risks are identified, this will include a proposed mitigation or monitoring plan. Following the approval of an investment, the Company requires investees to adopt and adhere to Big Society Capital’s Responsible Business Principles or an equivalent standard, as well as ensure their own investees do so. Where formal legal agreement is not possible or practicable, the deal team is required to conduct a gap or equivalency analysis of the investee’s existing policies and processes to ensure they meet the Company’s required standard. Guidance and training to the investment team is provided by the impact team to ensure consistent application and implementation of BSC’s ESG approach. Big Society Capital takes a fundamental approach to investment analysis, including of impact and ESG. It draws on a range of information sources (both qualitative and quantitative) which are most appropriate for the investment under consideration, taking into account as is applicable the business model, industry, and issue area. Big Society Capital does not use third party ESG data or rating providers as it does not believe these are well suited to its core investments as they are largely private markets with a focus on relatively smaller companies that these providers cover. Big Society Capital will continue to review the appropriateness of external frameworks and emerging best practice on the use of ESG data. Resources, Affiliations & Corporate Strategies:Big Society Capital's Chief Investment Officer Jeremy Rogers is the sponsor of the ESG process with operational oversight by the Head of Impact and Head of Investment Management. Impact and ESG are fully integrated into the BSC investment process and across the investment team. Deal owners are responsible for analysing and managing the financial and impact outcomes & ESG risks for an investment. The Impact Team provides specific support to BSC's deal teams on complex investment and strategic reviews of areas or asset classes along impact and ESG lines. Big Society Capital hired an ESG and EDI Manager in 2022 to support deal teams in the implementation of this approach. Listed below are the related affiliations and involvement with groups and frameworks that inform BSC’s impact management and ESG approach:
Impact Management Project Framework Big Society Capital adopts the Impact Management Project framework as the emerging global standard for managing and articulating social impact. The Company aims to demonstrate measurable positive outcomes through transparent reporting, aligned with the UN Sustainable Development Goals and the Impact Management Project. Given Big Society Capital’s focus is on creating positive, intended impact for people, Big Society Capital has prioritised playing an active role in supporting and championing the Impact Management Project including as an Advisory Board member, as well as the Operating Principles for Impact Management (outlined further below). Using the Impact Management Project’s ABC framework as a basis, the Company's investments are expected to be "high impact" on the basis that they are expected to sit within "Category C", "Contribute to Solutions". The Company also assesses all investments, considering the five dimensions of impact set out by the Impact Management Project detailed as follows:
Operating Principles for Impact Management Big Society Capital has been a signatory to the Operating Principles for Impact Management since March 2020. The nine Principles provide a framework that brings greater discipline and transparency around impact management practices to the impact investing market. Big Society Capital’s alignment with the Principles is documented and independently verified in its disclosure and verification statement[1].
UN Principles for Responsible Investment (PRI) Big Society Capital is a signatory to the PRI. Key UN PRI principles applied by the Company include:
Asset-class specific initiatives Big Society Capital has been active in the development of the Sustainability Reporting Standard for Social Housing, which is applied to Company investments in the housing sector. The organisation also participates in asset class-wide initiatives, for example, the Equity Impact Project with respect to housing funds, as well as VentureESG and DiversityVC with respect to venture funds. [1] https://bigsocietycapital.com/latest/aligning-our-impact-management-approach-impact-principles/
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