Schroder European Climate Transition Fund
SRI Style:
Sustainability Tilt
SDR Labelling:
Sustainability Improvers label
Product:
OEIC
Fund Region:
Europe ex UK
Fund Asset Type:
Equity
Launch Date:
02/05/2012
Last Amended:
Jan 2025
Dialshifter (
):
Fund Size:
£24.17m
(as at: 31/10/2024)
Total Screened Themed SRI Assets:
£78483.00m
(as at: 30/09/2024)
Total Responsible Ownership Assets:
£663766.00m
(as at: 30/09/2024)
Total Assets Under Management:
£777359.00m
(as at: 30/09/2024)
ISIN:
GB00B7CM2R31, GB00B8VX2T67, GB00B9DLYT99, GB00B9GTQ502, GB00BJRSTV36, GB00B6S00Y77, GB00B7FHV230, 7, GB00BDRZNP45, GB00B79FC312, GB00BDRZNM14, GB00BF782S34, GB00B6QR3M93, GB00B94WQJ53, GB00B75ZTX45, GB00BJRSTW43,
Contact Us:
Objectives:
The fund aims to provide capital growth in excess of the FTSE World Series Europe ex UK (Gross Total Return) Index (after fees have been deducted) over a three- to five-year period by investing in equity and equity related securities of European companies, excluding the UK, which meet the investment manager's sustainability criteria.
Investment Policy
The fund is actively managed and invests at least 80% of its assets in a concentrated range of equity and equity related securities of European companies, excluding the UK, which meet the investment manager's sustainability criteria (please see the fund characteristics section of the Prospectus for more details). The fund typically holds 30 to 50 companies.
The fund maintains a higher overall sustainability score than the FTSE World Series Europe ex UK (Gross Total Return) Index, based on the investment manager's rating system. More details on the investment process used to achieve this can be found in the fund characteristics section.
The fund does not directly invest in certain activities, industries or groups of issuers above certain limits listed under “Sustainability Information” on the fund's webpage, accessed via www.schroders.com/en/uk/private-investor/gfc.
The fund invests in companies that have good governance practices, as determined by the Investment Manager's rating criteria (please see the fund characteristics section for more details).
The fund may invest in companies that the investment manager believes will improve their sustainability practices within a reasonable timeframe, typically up to three years.
The investment manager may also engage with companies held by the fund to challenge identified areas of weakness on sustainability issues. More details on the investment manager's approach to sustainability and its engagement with companies are available on the website. www.schroders.com/en/lu/private-investor/strategic-capabilities/sustainability/
The fund may also invest directly or indirectly in other securities (including in other asset classes), countries (including the UK), regions, industries or currencies, collective investment schemes (including Schroder funds), warrants and money market instruments, and hold cash.
The fund may use derivatives with the aim reducing risk or managing the fund more efficiently.
Sustainable, Responsible
&/or ESG Overview:
Our process begins by looking for companies which take sustainability seriously and then working with the analyst team to assess whether now is an attractive moment to invest. We are looking to marry an investment style tilting towards ‘Quality at a reasonable price’, with companies that take their climate responsibilities seriously and can achieve real carbon reduction.
We are looking for companies who are, or could be, long-term compounders. For instance, we are looking for companies that have a track record on value creation and can benefit from demographics, scalability, pricing power and/or competitive advantage. This quantitative approach is combined with a qualitative overlay via company meetings, engagement and current news flow.
In tandem to this, we are looking for those companies who are already aligned to, (or on the path to be aligned to), the Paris Agreement goal of limiting the global temperature increase to 1.5⁰C above pre-industrial levels by 2030. The team will use official data via company accounts in our models to verify this. We are interested in action, not words.
Primary fund last amended:
Jan 2025
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 use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance)
Environmental - General
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
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.
Funds that have written policies explaining the approach they take when companies damage the environment or are significant polluters. Funds of this kind may work with companies to encourage higher standards, or exclude companies - sometimes dependent on the situation. Strategies vary. See fund information for further detail.
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail.
Climate Change & Energy
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
This fund has a strategy that aims ensure its holdings will gradually reduce their greenhouse gas emissions in line with targets set at COP21 in Paris. The ultimate aim is to achieve ‘net zero emissions by 2050’ and a ‘maximum global temperature increase of +1.5 to +2 degrees above preindustrial levels’. Strategies and opinions vary. Read fund information.
Find funds that require all, or almost all, of the companies it invests in to have a ‘net zero action plan’ - meaning that the companies they invest in have worked out how they will, over time, reduce their total carbon (and other greenhouse gas) emissions to nil.
Ethical Values Led Exclusions
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of 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 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.
Gilts & Sovereigns
Find funds that do not invest in / exclude 'sovereigns' - debt issued by governments. See eg https://www.investopedia.com/terms/s/sovereign-debt.asp
Banking & Financials
Find funds that include banks as part of their holdings / portfolio.
Funds that do or may invest in insurance companies.
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.
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Find fund managers that encourage the banks and insurance companies they invest in to publish climate change related financial information - as set out by the Task Force on Climate Related Financial Disclosures (with the aim of helping investors measure and respond to climate risk).
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Fund Governance
Environmental, social and governance issues are part of this fund’s reporting of their ‘value’ to clients. AoV reporting is a statutory requirement. Including ESG factors in its calculation is not.
Impact Methodologies
Find funds that specifically set out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Find funds that direct investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
How The Fund Works
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
This fund does not use stock lending for performance or risk purposes.
Unscreened Assets & Cash
Fund that only invest in cash to aid the practical management (buying and selling) of assets. These funds do not use additional financial instruments.
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Find funds designed for clients who care about ethical and values-based issues, often alongside sustainability issues also.
Find funds that are available via a tax efficient ISA product wrapper.
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
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 actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Collaborations & Affiliations
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Find fund management companies that are members of UKSIF - the UK Sustainable Investment and Finance association
A member of the Taskforce for Nature Related Financial Disclosures group which aims to aid risk management and shift money towards nature-positive outcomes.
Fund management entity is a member of the Investment Association https://www.theia.org/
Engagement Approach
working with the assets they hold to help stamp out modern slavery - where direct or indirect company employees are exploited for business benefits.
Sustainable, Responsible &/or ESG Policy:
Firstly, the team use a quantitative screening process to assess the investment rationale of a company. We are looking for companies who are, or could be, long-term compounders. For instance, we are looking for companies that have a track record on value creation and can benefit from demographics, scalability, pricing power and/or competitive advantage. This is combined with a qualitative approach via company meetings and current newsflow.
In tandem to this, we are looking for those companies who are already aligned to, (or on the path to be aligned to), the Paris Agreement goal of limiting the global temperature increase to 1.5⁰C above pre-industrial levels by 2030. The team use official data via company accounts to verify this.
Additionally, a range of exclusions help the team avoid doing significant harm. The European Sustainable Equity strategy does not invest in businesses with significant exposure to fossil fuels, weapons, alcohol, gambling, adult entertainment, or tobacco. For liquidity reasons, the team is also unlikely to invest in securities with a market cap of less than €1bn. Despite this strict criteria, the team believe they are still presented with an ample number of investment opportunities amongst companies listed across developed Europe.
Process:
Investment approach and research
The European Sustainable Equity strategy purpose is to create a core European equity strategy, without significant sector or style bias that generates consistent, style-agnostic and idiosyncratic alpha by taking a bottom-up investment approach. Their approach is anchored with a focus upon climate and ‘decarbonisers.’ The fund manager has a firm belief that only real reductions in company emissions matter and focus upon companies with a clear plan to limit their own emissions to be 1.5⁰C consistent.
The fund manager consistently aims to construct a diversified portfolio ensuring that stock selection is the driver of alpha for the strategy; this means they target stock specific risk as the prominent driver of returns relative to benchmark. This is a purposeful approach aligning a style agnostic investment philosophy and a stock-picking investment edge.
The key European Sustainable strategy and process characteristics are:
- Idea generation: ideas come from news, events, external valuation tools and proprietary research
- Quality companies: quality companies encompass both growth and value characteristics – manager undertakes fundamental research, meets management and visits companies and uses this knowledge together with inputs from expert networks to evaluate the investment case
- Quality at a Reasonable Price: benchmark agnostic approach with valuation discipline to avoid overpaying for quality characteristics
- Risk adjusted portfolio: style agnostic and idiosyncratic alpha sought with consideration of stock level correlations, fund level factor analysis, risk screens and insights from Equity Risk team.
The fund manager undertakes fundamental research drawing on Schroders deep resources which includes a team of Pan European sector analysts, sustainability analysts and other European equity fund managers.
Portfolio construction
The fund manager is accountable for all investment decisions and the performance of the strategy. The focus is on climate and those companies the fund manager identifies as decarbonisers. Decarbonising exposures exist in all sectors, and this is important as we seek diversification across the portfolio including by sector, style and market cap. The outcome of individual stock decisions is a portfolio without significant style and sector biases.
Additionally, the portfolio maintains a higher score in aggregate than its benchmark using Schroders proprietary tool review the aggregate SustainEx™. Schroders SustainEx™ quantifies the positive and negative social and environmental impacts of companies. Finally, the fund manager ensures an appropriate level of risk taking as evidenced by a high active share compared to benchmark.
The team do not use stop losses. In volatile markets, stop loss strategies can trigger the sale of securities inappropriately when the better course of action would be to use price weakness to add to the position. Typically, the managers sell a position if the investment thesis is realised or reflected in the valuation, or if circumstances change to compromise the original thesis.
Active ownership
Once a company is owned, the fund managers and analysts take responsibility for active ownership, working with Schroders Sustainable Investment team. This team includes Active Ownership specialists who co-ordinate engagement with individual companies and complete all voting. Engagement covers a wide range of issues such as mergers and acquisitions, capital structure, board structure, remuneration incentives and company specific social and environmental engagement. Companies decarbonizing journey will also be a key part of engagement. Schroders ESG tools are dynamic enabling the team to identify key issues to raise during meetings with company management teams, identify milestones and help track progress made over time on ESG issues.
Resources, Affiliations & Corporate Strategies:
Sustainable Investment Team
Sustainability is fundamental to our investment principles at Schroders, and we have an experienced and well-resourced (40+ members) Sustainable Investment team, who are embedded within our Investment function. We are a global team, spread across four regional hubs in London, Paris, Singapore and New York, aiming to ensure that sustainability is embedded through our global investment teams and client functions.
The team is led by Andrew Howard, Global Head of Sustainable Investment who is also a member of our Group Management Committee. As team head, he oversees our approach to ESG integration, active ownership, our sustainability research and tools, and our reporting and product strategy.
Our central Sustainable Investment team sits alongside investment teams rather than operating in a silo, which facilitates regular dialogue with our analysts and portfolio managers.
It is organised into four pillars:
- Sustainable Investment Management, incorporating advisory and integration, models and data, climate and nature and sustainable research
- Active Ownership, encompassing engagement and voting
- Impact
- Regional experts in Asia Pacific, Europe and North America.
We outline their key responsibilities and areas of focus below.
A. Sustainable investment management
Our Advisory and Integration team acts as a central contact point and consultant for a range of stakeholders across the business. This includes advising investment teams on ESG integration best practice; compliance, risk and legal teams on ESG regulation; and working with our regional experts; across Asia Pacific, Europe and North America, as outlined under pillar four.
Our Models and Data team is responsible for the maintenance and evolution of our suite of proprietary tools. They are also responsible for ESG data, ensuring we harness sustainability data effectively from both conventional and unconventional sources.
Our Strategy and Research team is responsible for undertaking sustainability research to: inform firmwide strategy and commitments; provide insights for investment teams to analyse sustainability-related risks and opportunities; and provide research-related and technical support for other stakeholders across the firm.
B. Active ownership
Our Engagement team partners with investors to have dialogue with the companies in which we invest, seeking to understand how prepared they are for a changing world and pushing them towards more sustainable practices. The team track the progress of these engagements and hold companies to account.
Our Corporate Governance team is responsible for voting in line with our Voting Policy and Principles.
C. Impact
Our Impact team is responsible for scaling our impact product offering in line with best-practice impact principles. The team works closely with investment desks and is responsible for developing and implementing our impact management and measurement framework, including impact assessment and monitoring at transaction and portfolio level, product development, impact strategy and impact reporting.
D. Regional Expertise
Our Regional Experts based in Asia Pacific, Europe and North America have a deep understanding of local market characteristics and nuances, and are responsible for staying abreast of sustainability-related developments. Our experts work with clients and internal teams to navigate and support clients’ ESG aspirations and challenges, utilising Schroders’ proprietary tools and research to develop investment solutions that meet their needs. They also engage with regulators and industry bodies to shape and support the global sustainable finance agenda. Our regional experts are a critical extension of the central team in London as the firm continues to evolve its global ESG strategy.
Governance of our ESG strategy and policies
We have a number of governance structures in place for decision-making and oversight of our approach to sustainable investment. The Board of Schroders plc (the Board) has collective responsibility for the management, direction and performance of the Group, and is accountable for our overall business strategy. The Group Chief Executive is responsible for proposing the strategy for the Group and for its implementation, supported by the Group’s senior management team and a number of Committees, some of which are noted below.
The Group Sustainability and Impact (GSI) Committee provides advice to the Group Chief Executive on sustainability and impact matters. The Committee considers, reviews and recommends the overall global sustainability and impact strategy, including key initiatives, new commitments and policies for approval. The Global Head of Sustainable Investment and Global Head of Corporate Sustainability are members of the Committee and report to the Group Management Committee (GMC) and the Board.
The Sustainability Executive Committee (ExCo) develops and oversees the delivery of our Group-level sustainable investment management strategy. The ExCo also advises on the development of our sustainability and impact investment and product frameworks. The ExCo has senior representation from across the business including Investment, Client Group, Wealth Management, Schroders Capital and Corporate Sustainability.
The Sustainability Regulations Steering Committee (Sustainability Reg SteerCo) oversees the progress of in-flight sustainability regulatory change programmes, as well as monitoring emergent sustainability regulations and determining their high-level impact on our Group sustainability strategy and supporting operations. The Sustainability Reg SteerCo receives input on planned or potential sustainability-related regulation from our Public Policy team, which actively engages with relevant regulators, industry trade associations and other bodies in the United Kingdom (UK) and European Union (EU). The Sustainability Reg Steerco has senior representation from across the business including Investment, Wealth Management, Schroders Capital, Legal, Risk & Compliance, Product and Operations Management.
Certain Schroders entities, businesses and Investment teams also have their own committees which consider their sustainable investment activities. For example, the Private Assets Sustainability and Impact Steering Committee (PA S&I SteerCo) develops and oversees the implementation of the Private Assets Sustainability and Impact strategy. In addition, the Wealth Management Sustainable Investment Committee (WMSIC), a sub-committee of the Wealth Management Investment Committee (WMIC), has delegated responsibility for recommending Wealth Management's Sustainability models, as well as providing investment strategy and direction for client portfolios that are linked to the sustainable models.
Alongside our central Sustainable Investment team, sustainable investing is also overseen and delivered by dedicated teams and expert individuals embedded throughout the firm (including across Investment teams and Client Group functions).
Industry involvement
We believe we have a particular role to play in sharing our expertise on different areas, supporting best practice but also learning from others.
We have a long-standing commitment to support and collaborate with several industry groups, organisations and initiatives to promote well-functioning financial markets. Our key stakeholders include exchanges, regulators and international and regional trade associations. For example, Schroders is a member of trade bodies such as the Investment Association in the UK, the European Fund and Asset Management Association (EFAMA), the Asia Securities Industry and Financial Markets Association (ASIFMA) in Hong Kong and the Securities Industry and Financial Markets Association (SIFMA) in the US.
Through this participation we share our insights to support the development of policy recommendations, share best practice and build coalitions of like-minded market participants to advocate for better functioning markets. We consider this to be key in improving responsible investment standards across sectors, establishing a consistent dialogue with companies, and in promoting the ongoing development and recognition of sustainability and ESG within the investment industry. A list of organisations and initiatives of which Schroders is a member or signatory is available on our website (Industry involvement| Schroders global).
SDR Labelling: Sustainability Improvers label
Key Performance Indicators:
For details on KPIs, please refer to the attached Schroder European Sustainable Equity Fund Factsheet.
Literature
Fund Holdings
Voting Record
Disclaimer
Important Information
Marketing material for Professional Clients only.
This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder Investment Fund Company (the "Company"). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. Subscriptions for shares of the Company can only be made on the basis of its latest Key Investor Information Document and prospectus, together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder Unit Trusts Limited.
The fund is an authorised unit trust. Subscriptions for fund units can only be made on the basis of its latest Key Investor Information Document, Supplementary Information Document and Prospectus, together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies are available in English and can be obtained, free of charge, from Schroder Unit Trusts Limited. These can be requested via out website at www.schroders.co.uk, or by calling the Investor Services Team on 0800 182 2399 requesting a printed version.
Any reference to regions/ countries/ sectors/ stocks/ securities is for illustrative purposes only and not a recommendation to buy or sell any financial instruments or adopt a specific investment strategy.
The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations.
Past Performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.
Performance data does not take into account any commissions and costs, if any, charged when units or shares of any fund, as applicable, are issued and redeemed.
Schroders has expressed its own views and opinions in this document, and these may change.
Information herein is believed to be reliable, but Schroders does not warrant its completeness or accuracy.
No Schroders entity accepts any liability for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise), in each case save to the extent such liability cannot be excluded under applicable laws.
The data contained in this document has been sourced by Schroders and should be independently verified. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither Schroders, nor the data provider, will have any liability in connection with the third-party data.
Schroders uses SustainEx™ to estimate the net social and environmental “cost” or “benefit” of an investment portfolio having regard to certain sustainability measures in comparison to a product’s benchmark where relevant. It does this using third party data as well as Schroders own estimates and assumptions and the outcome may differ from other sustainability tools and measures.
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Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registration No 4191730 England. Authorised and regulated by the Financial Conduct Authority.
Issued in December 2024. BDS007119.
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
|
|---|---|---|---|---|---|---|---|---|
Schroder European Climate Transition Fund |
Sustainability Tilt | Sustainability Improvers label | OEIC | Europe ex UK | Equity | 02/05/2012 | Jan 2025 | |
ObjectivesThe fund aims to provide capital growth in excess of the FTSE World Series Europe ex UK (Gross Total Return) Index (after fees have been deducted) over a three- to five-year period by investing in equity and equity related securities of European companies, excluding the UK, which meet the investment manager's sustainability criteria. Investment Policy The fund is actively managed and invests at least 80% of its assets in a concentrated range of equity and equity related securities of European companies, excluding the UK, which meet the investment manager's sustainability criteria (please see the fund characteristics section of the Prospectus for more details). The fund typically holds 30 to 50 companies. The fund maintains a higher overall sustainability score than the FTSE World Series Europe ex UK (Gross Total Return) Index, based on the investment manager's rating system. More details on the investment process used to achieve this can be found in the fund characteristics section. The fund does not directly invest in certain activities, industries or groups of issuers above certain limits listed under “Sustainability Information” on the fund's webpage, accessed via www.schroders.com/en/uk/private-investor/gfc. The fund invests in companies that have good governance practices, as determined by the Investment Manager's rating criteria (please see the fund characteristics section for more details). The fund may invest in companies that the investment manager believes will improve their sustainability practices within a reasonable timeframe, typically up to three years. The investment manager may also engage with companies held by the fund to challenge identified areas of weakness on sustainability issues. More details on the investment manager's approach to sustainability and its engagement with companies are available on the website. www.schroders.com/en/lu/private-investor/strategic-capabilities/sustainability/ The fund may also invest directly or indirectly in other securities (including in other asset classes), countries (including the UK), regions, industries or currencies, collective investment schemes (including Schroder funds), warrants and money market instruments, and hold cash. The fund may use derivatives with the aim reducing risk or managing the fund more efficiently. |
Fund Size: £24.17m (as at: 31/10/2024) Total Screened Themed SRI Assets: £78483.00m (as at: 30/09/2024) Total Responsible Ownership Assets: £663766.00m (as at: 30/09/2024) Total Assets Under Management: £777359.00m (as at: 30/09/2024) ISIN: GB00B7CM2R31, GB00B8VX2T67, GB00B9DLYT99, GB00B9GTQ502, GB00BJRSTV36, GB00B6S00Y77, GB00B7FHV230, 7, GB00BDRZNP45, GB00B79FC312, GB00BDRZNM14, GB00BF782S34, GB00B6QR3M93, GB00B94WQJ53, GB00B75ZTX45, GB00BJRSTW43, Contact Us: sami.arouche@schroders.com |
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Sustainable, Responsible &/or ESG OverviewOur process begins by looking for companies which take sustainability seriously and then working with the analyst team to assess whether now is an attractive moment to invest. We are looking to marry an investment style tilting towards ‘Quality at a reasonable price’, with companies that take their climate responsibilities seriously and can achieve real carbon reduction. We are looking for companies who are, or could be, long-term compounders. For instance, we are looking for companies that have a track record on value creation and can benefit from demographics, scalability, pricing power and/or competitive advantage. This quantitative approach is combined with a qualitative overlay via company meetings, engagement and current news flow. In tandem to this, we are looking for those companies who are already aligned to, (or on the path to be aligned to), the Paris Agreement goal of limiting the global temperature increase to 1.5⁰C above pre-industrial levels by 2030. The team will use official data via company accounts in our models to verify this. We are interested in action, not words. |
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Primary fund last amended: Jan 2025 |
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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 Global Compact linked exclusion policy
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Report against sustainability objectives
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance) Environmental - General
Environmental policy
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
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.
Environmental damage and pollution policy
Funds that have written policies explaining the approach they take when companies damage the environment or are significant polluters. Funds of this kind may work with companies to encourage higher standards, or exclude companies - sometimes dependent on the situation. Strategies vary. See fund information for further detail.
Favours cleaner, greener companies
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail. Climate Change & Energy
Encourage transition to low carbon through stewardship activity
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Paris aligned fund strategy
This fund has a strategy that aims ensure its holdings will gradually reduce their greenhouse gas emissions in line with targets set at COP21 in Paris. The ultimate aim is to achieve ‘net zero emissions by 2050’ and a ‘maximum global temperature increase of +1.5 to +2 degrees above preindustrial levels’. Strategies and opinions vary. Read fund information.
Require net zero action plan from all/most companies
Find funds that require all, or almost all, of the companies it invests in to have a ‘net zero action plan’ - meaning that the companies they invest in have worked out how they will, over time, reduce their total carbon (and other greenhouse gas) emissions to nil. Ethical Values Led Exclusions
Tobacco and related products - avoid where revenue > 5%
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of 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.
Gambling avoidance policy
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.
Pornography avoidance policy
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information. Gilts & Sovereigns
Does not invest in sovereigns
Find funds that do not invest in / exclude 'sovereigns' - debt issued by governments. See eg https://www.investopedia.com/terms/s/sovereign-debt.asp Banking & Financials
Invests in banks
Find funds that include banks as part of their holdings / portfolio.
Invests in insurers
Funds that do or may invest in insurance companies. Governance & Management
Avoids companies with poor governance
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.
Encourage board diversity e.g. gender
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Encourage TCFD alignment for banks & insurance companies
Find fund managers that encourage the banks and insurance companies they invest in to publish climate change related financial information - as set out by the Task Force on Climate Related Financial Disclosures (with the aim of helping investors measure and respond to climate risk).
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
ESG factors included in Assessment of Value (AoV) report
Environmental, social and governance issues are part of this fund’s reporting of their ‘value’ to clients. AoV reporting is a statutory requirement. Including ESG factors in its calculation is not. Impact Methodologies
Positive environmental impact theme
Find funds that specifically set out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Invests in environmental solutions companies
Find funds that direct investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
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 How The Fund Works
Combines norms based exclusions with other SRI criteria
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Do not use stock / securities lending
This fund does not use stock lending for performance or risk purposes. Unscreened Assets & Cash
No ‘diversifiers’ used other than cash
Fund that only invest in cash to aid the practical management (buying and selling) of assets. These funds do not use additional financial instruments. 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 interested in ethical issues
Find funds designed for clients who care about ethical and values-based issues, often alongside sustainability issues also.
Available via an ISA (OEIC only)
Find funds that are available via a tax efficient ISA product wrapper. 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
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.
ESG / SRI engagement (AFM company wide)
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Vote all* shares at AGMs / EGMs (AFM company wide)
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Responsible ownership / ESG a key differentiator (AFM company wide)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business. Collaborations & Affiliations
PRI signatory
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
UKSIF member
Find fund management companies that are members of UKSIF - the UK Sustainable Investment and Finance association
TNFD forum member (AFM company wide)
A member of the Taskforce for Nature Related Financial Disclosures group which aims to aid risk management and shift money towards nature-positive outcomes.
Investment Association (IA) member
Fund management entity is a member of the Investment Association https://www.theia.org/ Engagement Approach
Engaging to stop modern slavery
working with the assets they hold to help stamp out modern slavery - where direct or indirect company employees are exploited for business benefits. Sustainable, Responsible &/or ESG Policy:Firstly, the team use a quantitative screening process to assess the investment rationale of a company. We are looking for companies who are, or could be, long-term compounders. For instance, we are looking for companies that have a track record on value creation and can benefit from demographics, scalability, pricing power and/or competitive advantage. This is combined with a qualitative approach via company meetings and current newsflow. In tandem to this, we are looking for those companies who are already aligned to, (or on the path to be aligned to), the Paris Agreement goal of limiting the global temperature increase to 1.5⁰C above pre-industrial levels by 2030. The team use official data via company accounts to verify this. Additionally, a range of exclusions help the team avoid doing significant harm. The European Sustainable Equity strategy does not invest in businesses with significant exposure to fossil fuels, weapons, alcohol, gambling, adult entertainment, or tobacco. For liquidity reasons, the team is also unlikely to invest in securities with a market cap of less than €1bn. Despite this strict criteria, the team believe they are still presented with an ample number of investment opportunities amongst companies listed across developed Europe. Process:Investment approach and research The European Sustainable Equity strategy purpose is to create a core European equity strategy, without significant sector or style bias that generates consistent, style-agnostic and idiosyncratic alpha by taking a bottom-up investment approach. Their approach is anchored with a focus upon climate and ‘decarbonisers.’ The fund manager has a firm belief that only real reductions in company emissions matter and focus upon companies with a clear plan to limit their own emissions to be 1.5⁰C consistent. The fund manager consistently aims to construct a diversified portfolio ensuring that stock selection is the driver of alpha for the strategy; this means they target stock specific risk as the prominent driver of returns relative to benchmark. This is a purposeful approach aligning a style agnostic investment philosophy and a stock-picking investment edge. The key European Sustainable strategy and process characteristics are:
The fund manager is accountable for all investment decisions and the performance of the strategy. The focus is on climate and those companies the fund manager identifies as decarbonisers. Decarbonising exposures exist in all sectors, and this is important as we seek diversification across the portfolio including by sector, style and market cap. The outcome of individual stock decisions is a portfolio without significant style and sector biases. Additionally, the portfolio maintains a higher score in aggregate than its benchmark using Schroders proprietary tool review the aggregate SustainEx™. Schroders SustainEx™ quantifies the positive and negative social and environmental impacts of companies. Finally, the fund manager ensures an appropriate level of risk taking as evidenced by a high active share compared to benchmark. The team do not use stop losses. In volatile markets, stop loss strategies can trigger the sale of securities inappropriately when the better course of action would be to use price weakness to add to the position. Typically, the managers sell a position if the investment thesis is realised or reflected in the valuation, or if circumstances change to compromise the original thesis.
Once a company is owned, the fund managers and analysts take responsibility for active ownership, working with Schroders Sustainable Investment team. This team includes Active Ownership specialists who co-ordinate engagement with individual companies and complete all voting. Engagement covers a wide range of issues such as mergers and acquisitions, capital structure, board structure, remuneration incentives and company specific social and environmental engagement. Companies decarbonizing journey will also be a key part of engagement. Schroders ESG tools are dynamic enabling the team to identify key issues to raise during meetings with company management teams, identify milestones and help track progress made over time on ESG issues.
Resources, Affiliations & Corporate Strategies:Sustainable Investment Team Sustainability is fundamental to our investment principles at Schroders, and we have an experienced and well-resourced (40+ members) Sustainable Investment team, who are embedded within our Investment function. We are a global team, spread across four regional hubs in London, Paris, Singapore and New York, aiming to ensure that sustainability is embedded through our global investment teams and client functions. The team is led by Andrew Howard, Global Head of Sustainable Investment who is also a member of our Group Management Committee. As team head, he oversees our approach to ESG integration, active ownership, our sustainability research and tools, and our reporting and product strategy. Our central Sustainable Investment team sits alongside investment teams rather than operating in a silo, which facilitates regular dialogue with our analysts and portfolio managers. It is organised into four pillars:
Our Advisory and Integration team acts as a central contact point and consultant for a range of stakeholders across the business. This includes advising investment teams on ESG integration best practice; compliance, risk and legal teams on ESG regulation; and working with our regional experts; across Asia Pacific, Europe and North America, as outlined under pillar four. Our Models and Data team is responsible for the maintenance and evolution of our suite of proprietary tools. They are also responsible for ESG data, ensuring we harness sustainability data effectively from both conventional and unconventional sources. Our Strategy and Research team is responsible for undertaking sustainability research to: inform firmwide strategy and commitments; provide insights for investment teams to analyse sustainability-related risks and opportunities; and provide research-related and technical support for other stakeholders across the firm.
B. Active ownership Our Engagement team partners with investors to have dialogue with the companies in which we invest, seeking to understand how prepared they are for a changing world and pushing them towards more sustainable practices. The team track the progress of these engagements and hold companies to account. Our Corporate Governance team is responsible for voting in line with our Voting Policy and Principles.
Our Impact team is responsible for scaling our impact product offering in line with best-practice impact principles. The team works closely with investment desks and is responsible for developing and implementing our impact management and measurement framework, including impact assessment and monitoring at transaction and portfolio level, product development, impact strategy and impact reporting.
Our Regional Experts based in Asia Pacific, Europe and North America have a deep understanding of local market characteristics and nuances, and are responsible for staying abreast of sustainability-related developments. Our experts work with clients and internal teams to navigate and support clients’ ESG aspirations and challenges, utilising Schroders’ proprietary tools and research to develop investment solutions that meet their needs. They also engage with regulators and industry bodies to shape and support the global sustainable finance agenda. Our regional experts are a critical extension of the central team in London as the firm continues to evolve its global ESG strategy.
We have a number of governance structures in place for decision-making and oversight of our approach to sustainable investment. The Board of Schroders plc (the Board) has collective responsibility for the management, direction and performance of the Group, and is accountable for our overall business strategy. The Group Chief Executive is responsible for proposing the strategy for the Group and for its implementation, supported by the Group’s senior management team and a number of Committees, some of which are noted below. The Group Sustainability and Impact (GSI) Committee provides advice to the Group Chief Executive on sustainability and impact matters. The Committee considers, reviews and recommends the overall global sustainability and impact strategy, including key initiatives, new commitments and policies for approval. The Global Head of Sustainable Investment and Global Head of Corporate Sustainability are members of the Committee and report to the Group Management Committee (GMC) and the Board. The Sustainability Executive Committee (ExCo) develops and oversees the delivery of our Group-level sustainable investment management strategy. The ExCo also advises on the development of our sustainability and impact investment and product frameworks. The ExCo has senior representation from across the business including Investment, Client Group, Wealth Management, Schroders Capital and Corporate Sustainability. The Sustainability Regulations Steering Committee (Sustainability Reg SteerCo) oversees the progress of in-flight sustainability regulatory change programmes, as well as monitoring emergent sustainability regulations and determining their high-level impact on our Group sustainability strategy and supporting operations. The Sustainability Reg SteerCo receives input on planned or potential sustainability-related regulation from our Public Policy team, which actively engages with relevant regulators, industry trade associations and other bodies in the United Kingdom (UK) and European Union (EU). The Sustainability Reg Steerco has senior representation from across the business including Investment, Wealth Management, Schroders Capital, Legal, Risk & Compliance, Product and Operations Management. Certain Schroders entities, businesses and Investment teams also have their own committees which consider their sustainable investment activities. For example, the Private Assets Sustainability and Impact Steering Committee (PA S&I SteerCo) develops and oversees the implementation of the Private Assets Sustainability and Impact strategy. In addition, the Wealth Management Sustainable Investment Committee (WMSIC), a sub-committee of the Wealth Management Investment Committee (WMIC), has delegated responsibility for recommending Wealth Management's Sustainability models, as well as providing investment strategy and direction for client portfolios that are linked to the sustainable models. Alongside our central Sustainable Investment team, sustainable investing is also overseen and delivered by dedicated teams and expert individuals embedded throughout the firm (including across Investment teams and Client Group functions).
We believe we have a particular role to play in sharing our expertise on different areas, supporting best practice but also learning from others. We have a long-standing commitment to support and collaborate with several industry groups, organisations and initiatives to promote well-functioning financial markets. Our key stakeholders include exchanges, regulators and international and regional trade associations. For example, Schroders is a member of trade bodies such as the Investment Association in the UK, the European Fund and Asset Management Association (EFAMA), the Asia Securities Industry and Financial Markets Association (ASIFMA) in Hong Kong and the Securities Industry and Financial Markets Association (SIFMA) in the US. Through this participation we share our insights to support the development of policy recommendations, share best practice and build coalitions of like-minded market participants to advocate for better functioning markets. We consider this to be key in improving responsible investment standards across sectors, establishing a consistent dialogue with companies, and in promoting the ongoing development and recognition of sustainability and ESG within the investment industry. A list of organisations and initiatives of which Schroders is a member or signatory is available on our website (Industry involvement| Schroders global). SDR Labelling: Sustainability Improvers label Key Performance Indicators: For details on KPIs, please refer to the attached Schroder European Sustainable Equity Fund Factsheet. LiteratureFund HoldingsVoting RecordDisclaimerImportant Information Marketing material for Professional Clients only. This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder Investment Fund Company (the "Company"). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. Subscriptions for shares of the Company can only be made on the basis of its latest Key Investor Information Document and prospectus, together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder Unit Trusts Limited. The fund is an authorised unit trust. Subscriptions for fund units can only be made on the basis of its latest Key Investor Information Document, Supplementary Information Document and Prospectus, together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies are available in English and can be obtained, free of charge, from Schroder Unit Trusts Limited. These can be requested via out website at www.schroders.co.uk, or by calling the Investor Services Team on 0800 182 2399 requesting a printed version. Any reference to regions/ countries/ sectors/ stocks/ securities is for illustrative purposes only and not a recommendation to buy or sell any financial instruments or adopt a specific investment strategy. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. Performance data does not take into account any commissions and costs, if any, charged when units or shares of any fund, as applicable, are issued and redeemed. Schroders has expressed its own views and opinions in this document, and these may change. Information herein is believed to be reliable, but Schroders does not warrant its completeness or accuracy. No Schroders entity accepts any liability for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise), in each case save to the extent such liability cannot be excluded under applicable laws. The data contained in this document has been sourced by Schroders and should be independently verified. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither Schroders, nor the data provider, will have any liability in connection with the third-party data. Schroders uses SustainEx™ to estimate the net social and environmental “cost” or “benefit” of an investment portfolio having regard to certain sustainability measures in comparison to a product’s benchmark where relevant. It does this using third party data as well as Schroders own estimates and assumptions and the outcome may differ from other sustainability tools and measures. Schroders will be a data controller in respect of your personal data. For information on how Schroders might process your personal data, please view our Privacy Policy available at https://www.schroders.com/en/global/individual/footer/privacy-statement/ or on request should you not have access to this webpage. For your security, communications may be recorded or monitored. Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registration No 4191730 England. Authorised and regulated by the Financial Conduct Authority. Issued in December 2024. BDS007119. |
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