Ninety One Global Sustainable Equity Fund
SRI Style:
Sustainability Tilt
SDR Labelling:
Sustainability Impact label
Product:
OEIC
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
27/03/2001
Last Amended:
Oct 2024
Dialshifter (
):
Fund Size:
£120.00m
(as at: 31/03/2024)
Total Screened Themed SRI Assets:
£5326.00m
Total Responsible Ownership Assets:
£115962.00m
Total Assets Under Management:
£126026.00m
ISIN:
GB00B01VDL32
Objectives:
The Fund aims to achieve total returns comprised of capital growth and income over the long-term.
The Fund invests primarily (at least two-thirds) in the shares of companies around the world and in related securities (which includes, without being exhaustive, depositary receipts and equity linked notes).
The Fund promotes environmental and/or social characteristics by investing in companies considered by the Investment Manager as having operations and/or business models that aim to minimise their harmful effects on society and the environment, or whose products and/or services seek to benefit society and the environment.
Sustainable, Responsible
&/or ESG Overview:
The Ninety One Global Sustainable Equity strategy is focused on identifying companies tackling the world’s sustainability challenges; it is an active global equity solution seeking companies with sustainable drivers that are helping to build a better world. Our process reflects our core beliefs of:
- Sustainable long-term investing: investing in companies increasing the provision of products and/or services addressing environmental and social challenges based on measurable KPIs.
- Active engagement: providing an investor contribution to positive change by engaging with management to increase the provision of the companies’ sustainable solutions.
Portfolio holdings exhibit three characteristics, intended to generate through the cycle investment returns and sustainability impact:
- Structural growth: growth linked to tackling sustainability challenges;
- Competitive advantage: businesses positioned to be advantaged over competitors such as through scale, network, or culture advantages;
- Sustainable returns: delivering persistent future returns supported by structural growth and competitive advantages.
Primary fund last amended:
Oct 2024
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
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.
Find funds that have a policy or theme that relates to managing natural resources more efficiently. Funds with this policy will be likely to favour companies that make (or enable the) more efficient use of resources - and either avoid or encourage change amongst companies with lower standards. 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.
Find funds that have a written policy or theme on waste management - typically a view to encouraging higher levels of recycling and better efficiency / reducing waste.
Nature & Biodiversity
Find funds that have a written biodiversity policy or theme aimed at encouraging and improving environmental protection and safeguarding the natural world (sometimes referred to as the preservation or enhancement of 'natural capital'). See eg https://www.un.org/en/climatechange/science/climate-issues/biodiversity
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.
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
Find funds where investment in clean / renewable energy companies an other assets is central to their investment selection strategy. The proportion of the fund that is directly or indirectly invested in renewable energy varies between funds and over time. See fund information for further details.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
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.
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.
Social / Employment
Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
Find funds with policies or themes that set out their approach to health and wellbeing issues. Funds of this kind typically aim to invest in companies with high standards - or encourage high standards. Themed funds are likely to have more of an emphasis on this area. Strategies vary. See fund information for further detail.
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.
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 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.
Meeting Peoples' Basic Needs
Find funds that have policies or themes that set out their position on investment in the water sector and/or sanitation. Strategies vary. See fund information for further detail.
Healthcare and or medical theme or area of investment - the fund may have a single theme or many themes
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.
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
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 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 funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Find funds that have SRI strategies and focus their investment stock selection on larger companies. (e.g. over circa £5-£10bn)
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.
Find funds that specifically set out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Find funds that specifically state that they aim to deliver positive social (i.e. people related) impacts and/or 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.
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.
Find funds that specifically set out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
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.
This fund has an explanation of the way in which the manager believes things need to change in order to deliver a more sustainable future, which they are working to help achieve.
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.
This fund does not use stock lending for performance or risk purposes.
Unscreened Assets & Cash
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Labels & Accreditations
Finds funds classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics with high governance also. These rules do not currently apply to UK funds so many managers may leave this field blank.
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 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
Fund management entity is a member of the Investment Association https://www.theia.org/
Engagement Approach
Fund manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Asset manager has a stewardship / responsible ownership policy that means they are working to encourage more responsible mining practices - where environmental and social issues are properly dealt with by the companies they invest in.
The asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
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 manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
Asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
working with the assets they hold to help stamp out modern slavery - where direct or indirect company employees are exploited for business benefits.
Fund managers have stewardship strategies in place that focus on improving governance standards across investee assets
Asset manager has stewardship strategy in place which involves discussing mental health issues with investee companies - with the aim of raising standards
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards
Climate & Net Zero Transition
See https://sciencebasedtargets.org/
Transparency
This asset management company has published information on their website about the delivery of a 'just transition' - ie the delivery of the necessary shift to a sustainable future that takes full account of social implications - how change effects people. See eg https://www.unepfi.org/social-issues/just-transition/ or LSE Grantham
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information.
Sustainable, Responsible &/or ESG Policy:
We believe in sustainability with substance. We see the shift towards sustainability as offering a once-in-a-generation opportunity and a fundamental reappraisal of value creation.
The shift towards sustainability is already underway. Consumers are driving the shift as they are demanding more from the companies they use. Corporations are increasingly talking about sustainability and the durability of their operations. Academic evidence is increasingly showing that businesses that consider the impact of their operations on society and the environment outperform the market, while regulators are pushing for change.
We believe the world’s measure of success is in the process of shifting from a zero-sum game – where shareholder value is maximised at the expense of other stakeholders such as the environment, wider society and employees – into a world where considering these other stakeholders in business decisions creates greater value for all. This creates an important sustainability opportunity for companies that already adopt a multi-stakeholder mindset.
It is increasingly important for investors to understand and price externalities, understood as a company’s broader impact on the society in which it operates, where possible. Identifying companies capturing the sustainable growth opportunity in Emerging Markets, and managing their externalities, requires innovation and new tools beyond traditional financial analysis. There has in recent years been an over-reliance on third-party ESG ratings, which we believe increases the sustainability investment opportunity.
We take a fundamentally-driven approach; we focus on assessing company externalities (the impact companies have on the environment, society and employees) as a way to appraise the sustainability credentials of a company. We identify the material externalities created by a company on its stakeholders across natural, human and social capital.
The strategy employs a bespoke bottom-up investment process designed specifically for the relevant diverse universe of global equities that are best positioned to capture the long-term secular growth opportunities arising from the shift towards sustainability. We look to identify companies providing solutions to sustainability challenges where the corporate sector plays a key role, and which have significant potential for long-term, structural growth. We have developed methodologies to identify companies that we believe are genuinely providing sustainable solutions to unmet needs across six structural growth areas:
- Decarbonisation: we see significant structural growth potential for companies that provide products and services that contribute to reducing carbon emissions;
- Climate adaptation, water & pollution management: we see significant structural growth potential for companies that provide products and services that help manage the impact of climate change, creating a diverse global climate adaptation investment universe. This methodology expands into water and pollution management where we see significant need for products and services given resource constraints and ageing infrastructure and a large amount of public funding is going towards tackling water scarcity, creating attractive long-term growth opportunities for companies with leading solutions;
- Healthcare impact: we see significant structural growth potential for healthcare impact companies that address unmet needs through innovation in healthcare products and services, and by extending healthcare access to underserved regions and communities.
- Financial inclusion: we see significant structural growth potential for companies that drive financial inclusion by providing underserved cohorts with accessible financial products and services;
- Digital inclusion: investing to close the digital divide is more urgent than ever. Small and medium-sized enterprises are significant contributors to commerce and innovation globally, and supporting their inclusion in a digital economy continues to grow in importance in all countries; and
- Access to education: we see significant structural growth potential for companies that extend quality education and training to underserved cohort and address global skills gaps.
The investment process incorporates proprietary models, such as our sustainable revenues screen, our detailed company-level fundamental financial and risk modelling and corporate culture assessment, but ultimately relies on our qualitative decisions.
This structured and disciplined investment process is designed to efficiently focus analysts’ time on the deep fundamental research of a shortlist of companies that make it through our universe filter and idea generation, to identify businesses with sustainable drivers of structural growth, competitive advantages, and sustainable returns. The portfolio is then constructed from the bottom-up, based on the level of conviction in each position. Ongoing management and monitoring of holdings are intrinsically linked with our engagement work and active stewardship.
Process:
The five defined stages to the investment process are described in further detail below:
- Universe Screen
The investment team constructs a sustainable investment universe by screening for companies with more than 50% of revenues across one or more of the Bloomberg Industry Classification Standards (BICS) categories we believe align to sustainability challenges. These companies have the potential to capture the long-term secular growth opportunities arising from the shift towards a more sustainable future. It is important to think not just about the direct beneficiaries of this sustainable transition, but the entire related supply chains that need to be built up. The universe comprises ~5,000 companies across sectors, regions, and market capitalisations.
The investment team also filters based on our defined set of externalities and research- driven exclusions; these are not ethically or morally derived exclusions. These can be found on our website here.
- Idea Generation
The main source of idea generation is a ranking of the resultant universe based on key financial, sustainability and competitive advantage metrics that reflect the structural growth, competitive advantage, and sustainable return characteristics that we seek in businesses. The ranking stimulates team debate, whilst analyst experience and knowledge enable a qualitative overlay to broaden the idea pool as appropriate. The metrics chosen derives from decades of investment team and firm-wide experience as well as rigorous back-testing and relevant cross-sector analysis. This screen directs analyst research, which can then lead to further qualitative idea generation.
We have also integrated an internal sustainability indicator into this part of the process. This indicator assesses companies across various sustainability and ESG factors that we've identified as being likely to have a financial impact on a company, with each company appraised relative to its sector. Once a company screens to be included in stage three (Fundamental Analysis), we perform our own sustainability analysis of the company. This is an integral part of the investment process as we believe that companies with strong sustainability characteristics, focused on minimising their negative externalities, can outperform over time.
- Fundamental analysis
Once a company comes through our idea generation screen, we move it to the next stage of the investment process where the team conducts the fundamental analysis to identify whether sustainability factors and competitive advantages are underpriced by the market.
The first stage of our fundamental analysis process is focused on the company’s business model and whether it fits with our requirement for structural growth, sustainable returns and competitive advantage. At this stage we also carry out our own sustainability analysis by assessing the externalities generated by the company. When we are comfortable that the company fulfils our requirement and there are no material sustainability risks, we take it forward to a second, more detailed stage of fundamental analysis.
We also conduct detailed fundamental analysis of sub-sectors and technologies exposed to the sustainable structural growth areas that we invest in. This helps us to inform and stress test our company models. See our paper “A sustainable investment edge” for more details on the structural growth we expect to see from these areas.
The key areas of our company research are described below:
a) Company analysis and understanding on structural growth opportunity
The investment team works through a rigorous checklist for each investment idea. We want to find the best companies in our universe which are intrinsically undervalued.
The team conducts fundamental analysis by constructing detailed models. We build sustainability insights directly into our financial models, enabling us to construct portfolios of companies where the sustainable investment case is underappreciated by the market and where we therefore expect sustainability to be a driver of long-term alpha.
Using our proprietary Capitals Framework, we assess companies qualitatively and quantitatively through a lens that incorporates relevant stakeholders, to evaluate how a company’s impacts on its stakeholders are likely to influence its growth and return potential.
b) Competitive advantage
Market participants systematically underestimate the quantum and persistence of returns in cases where businesses have sustainable long-term competitive advantages. This results in exploitable inefficiencies. Our competitive advantage analysis can be simplified by answering the key questions/topics shown below:
- Company factors: culture, technology, brand, cost competitiveness, R&D spend, and market share; and
- Market factors: market growth, pricing power, barriers to entry, substitutes, and consumer acceptance.
We use these competitive advantage factors to determine the long-term sustainability of the business in question. In addition, we believe a strong balance sheet and outstanding management are also a competitive advantage and ensure we cover these factors during our fundamental analysis. We pay particular attention to having an informed perspective of the competitive advantage period and how that translates into the sustainable margin, cash flow generation and/or economic value added.
Culture is an aspect of a company’s competitive advantage that we believe is often poorly understood by investors as it is challenging to evaluate, and consequently may be mispriced – suggesting an opportunity for active investors. We only buy a stock when we have made a culture assessment of a company, using our bespoke corporate-culture framework. This framework draws on insights from company meetings, academic collaborations, expert-network access and employee resources. The framework was developed from a collaborative research project between Ninety One’s Investment Institute and Alex Edmans, Professor of Finance at London Business School. For more information on our corporate culture work, refer to our paper “Culture as a driver of sustainable alpha”. The goal of this step is to identify areas of competitive advantage often overlook and mispriced.
We believe all of this analysis helps us to identify companies that can create value by generating a return on investment.
c) Return profile and growth
It is important to note that profitable growth and efficient use of capital is embedded within each of the above calculations. Structural growth and sustainable returns are two key drivers of our stock selection and analysis. We believe growth and compounding characteristics are key factors in determining a reasonable fair value for any company. In compounders, we are looking for enduring competitive advantages and companies with a durable and resilient outlook. We therefore do not claim to be only growth or only value investors, instead we invest in the leading companies within our universe where we believe there is underappreciated value.
d) Valuation
The team conducts full financial and valuation analysis by constructing individual company models to determine the growth, earning, cash generation, and intrinsic value of the companies under review. Our proprietary equity models are maintained within the team and contain our own forecasts which embed our sustainability insights both on the impact opportunity side as well as from a risk and negative externality perspective. Research from earlier parts of the process is used and built on here. In undertaking full income statement, cashflow statement and balance sheet analysis we can focus on specific financial metrics which we believe to be the drivers of long-term returns. The output of the equity analysis is a target price for the company across different scenarios.
The target price is based on three main components with returns and cash flow being prioritised:
- Intrinsic value (DCF)
- Returns analysis (CFROI)
- Multiples analysis (FCF Yield)
e) Management,sustainability, and engagement assessment
Capital allocation decisions and operational performance are important considerations for us when evaluating management. Much of these considerations feed into our competitive advantage and valuation work. We also place huge significance on sustainability factors as highlighted in our initial screens. Sustainability reports and net zero emissions targets are important throughout our fundamental analysis as well as topics featuring in team debates.
This fundamental bottom-up research stage of the investment process also includes company meetings and onsite visits where we will focus on all the key factors mentioned above. We will only buy a stock for the portfolio after we have met with company management.
When all factors described above score positively for an investment idea, we will add it to our list of best ideas1 and compare to the existing holdings.
- Portfolio Construction
The portfolio is constructed from the bottom-up in a benchmark-agnostic fashion, using the best ideas1 from previous stages of the investment process. We take an absolute contribution to risk-based approach to portfolio construction such that our highest-conviction stocks represent the highest contribution to risk. We consider elements such as the strength of sustainability credentials, competitive advantages, carbon footprint and trajectory and the contribution to the portfolio's overall risk. The portfolio is then reviewed at a sub-sector level with regards to overall risk budget, sub-sector risks, stress tests and style analytics metrics. Weightings may then be adjusted accordingly. We use MSCI Barra One for quantitative portfolio risk analysis and optimisation.
- Engagement and Reporting
We believe that individual and collective engagements are powerful tools to effect positive change. We meet management and set engagement goals for all portfolio companies, with an explicit focus on the disclosure of KPIs that allow us to measure the impact of their products and services, growth of these KPIs, adoption of net-zero commitments and science-based targets, as well as to engage on any material sustainability or financial matters. Engagement is bespoke and generates information that feeds back into our portfolio monitoring, including valuable insights into company progress and any culture changes. Key principles of our engagement approach are set out below.
- We set engagement goals for all portfolio companies, engage regularly, reporting progress to clients in our annual sustainability report
- Many of the engagement topics are long-term in nature and we acknowledge progress incrementally
- We also vote on proxies to hold board and management teams accountable to the highest standards
In our annual sustainability report, we provide transparency on positions and company engagement, as well as an explanation of why we believe the companies may see structural growth and have a competitive advantage.
Resources, Affiliations & Corporate Strategies:
Sustainability knowledge and expertise is held across a number of areas of the business. The Sustainability Committee oversees the wider sustainability ecosystem in the business. Ninety One’s firm-wide sustainability initiatives are overseen by the Chief Sustainability Officer. This includes investment integration, advocacy, corporate transition to net zero and developing and implementing efforts to mobilise dedicated funding for an inclusive net zero transition.
Ultimately, the investment teams have responsibility for managing sustainability risks and opportunities within their investment process through their integration frameworks. We place a big emphasis on ensuring that the investment teams have the appropriate knowledge, insights, data and tools so that the expertise is a truly integrated part of the investment process. The investment teams are supported by dedicated ESG specialists across our Sustainability and Investment Risk team. We also have further expertise that we can draw upon from the portfolio managers managing our dedicated sustainable strategies, and other sustainability specialists that are dedicated to individual investment teams.
We seek to contribute meaningfully to the conversation and to encourage a deeper focus on sustainability-related issues in all of the jurisdictions where we invest. We may collaborate with other investors as part of an engagement strategy if it can contribute to achieving our engagement objectives. Our membership of regional and global organisations facilitates this.
The following details our firmwide collaborative partnerships and our role: (Organisation name and start date)
- Access to Medicine Foundation (2023)
- Key focus: To have a positive impact on expanding access to medicine and encourage essential healthcare companies to do more to reach people in low- and middle-income countries.
- Our Role: Ninety One has pledged support to the Foundation’s research and signed the Access to Medicine Index Investor Statement.
- ASCOR project (2021)
- Key focus: Develop an assessment framework for sovereigns’ performance and governance as they transition – this includes the consideration of a just transition.
- Our Role: We are working with the ASCOR project to better assess sovereign alignment and sovereign carbon transition risks. Over the year, we contributed to the development of the ASCOR tool.
- Association for Savings and Investment (ASISA) (2008)
- Key Focus: To ensure that the South African savings and investment industry remains relevant and sustainable into the future in the interest of its members, the country and its citizens.
- Our Role: We actively participate in collaborative engagements and working groups and serve on the Responsible Investment Committee. Thabo Khojane, Managing Director for our South African business, is a member of ASISA's board and several committees, include the Executive Committee.
- The Carbon Disclosure Project (CDP) (2010)
- Key Focus: To enable companies, cities, states and regions to measure and manage their environmental impacts.
- Our Role: We are involved in engagements with companies regarding their disclosure to CDP. In 2022, 30% of the companies we engaged with on climate committed to disclose to CDP.
- Chatham House Asia-Pacific Programme (2018)
- Key Focus: This programme provides objective analysis of the key issues affecting South Asia, Southeast Asia, East Asia and the Pacific, engaging decision-makers and undertaking original research with partners in the region to inform and influence positive policy decisions.
- Our Role: We aim to actively contribute to conversations with academics, diplomats and policymakers.
- Climate Action 100+ (2018)
- Key Focus: An investor initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
- Our Role: We are involved in collaborative engagements with companies to ensure they are minimising and disclosing the risks presented by climate change. We co-lead on three companies and participate in two more.
- Climate Bonds Initiative (2021)
- Key focus: An international organisation working to mobilise the bond market, for climate change solutions
- Our Role: We contribute to advocacy aligned with our investment thinking, policy advocacy and industry collaboration
- Crisis Group (2014)
- Key focus: The International Crisis Group is an independent organisation working to prevent wars and shape policies that will build a more peaceful world. Crisis Group sounds the alarm to prevent deadly conflict.
- Our Role: We leverage Crisis Group’s expertise in our investment decision-making and engagements. We work to create awareness and broaden Crisis Group’s support base. We are involved with the group’s International Advisory Council and Ambassador Council.
- Emerging Markets Investor Alliance (2019)
- Key focus: Enables institutional emerging market investors to support good governance, promote sustainable development, and improve investment performance in the governments and companies in which they invest.
- Our Role: We support the initiative and are involved in its working groups, particularly relating to fiscal transparency, leading on some and participating in others.
- FAIRR (2019)
- Key focus: To raise awareness of the material ESG risks and opportunities caused by intensive livestock production
- Our Role: We participate in collaborative conversations to identify and engage on material ESG risks and opportunities in global protein supply chains.
- Glasgow Financial Alliance for Net Zero (GFANZ) (2021)
- Key focus: Brings together firms from the leading net zero initiatives across the financial system to accelerate the transition to net zero emissions by 2050 at the latest.
- Our Role: We are active members of multiple working groups: ‘private capital mobilization’; ‘managed phase-out’ and ‘portfolio alignment metrics’ and contributed to multiple public engagements as thought leaders on emerging market transition investing.
- Global Climate Finance Centre (GCFC) (2023)
- Key focus: A think tank and research hub convening stakeholders and providing capacity building for financial actors globally to support the scale-up of well-functioning, aligned green finance markets to drive the growth of climate finance.
- Our Role: Ninety One is a founding member.
- Global Investor Commission on Mining 2030 (2023)
- Key focus: A multi-stakeholder Commission, which recognises the mining industry’s role in the transition to a low carbon economy, and the need for the industry to manage systemic risks which threaten its social license to operate.
- Our Role: We participate through the investor steering committee.
- Institute of International Finance (IIF) (2021)
- Key focus: Supports the financial industry in the management to risks, to develop sound industry practices and to advocate for regulatory, financial and economic policies that are in the broad interest of its members and foster global financial stability and sustainable economic growth.
- Our Role: We participate in global membership meetings and collaborative efforts on global financial policy and regulatory matters.
- Institutional Investors Group on Climate Change (IIGCC) (2018)
- Key focus: To provide investors with a collaborative platform to encourage public policies, investment practices and corporate behaviour that address long-term risks and opportunities associated with climate change.
- Our Role: We are a participant in the organisation, which includes taking part in engagements and providing information for thought papers. We continue to co-chair the Investor Practices programme and participate in the net zero implementation and corporate bond stewardship working groups.
- The Investment Association (UK) (2002)
- Key focus: To help the industry support the economy with stable, long-term finance, ensuring investors have access to fair and effective markets and embedding the highest standards of sustainable governance in the UK.
- Our Role: We are full members and take part in various working groups.
- The Investor Forum (2017)
- Key focus: To position stewardship at the heart of investment decision-making by facilitating dialogue, creating long-term solutions and enhancing value.
- Our Role: We regularly meet with the forum and participate in targeted strategic governance engagements. We have participated in several collective engagements over the year.
- Investor Leadership Network (2022)
- Key focus: A collaborative platform for investors interested in addressing sustainability and long-term growth across three workstreams: sustainable infrastructure, diversity in investment and climate change.
- Our Role: We contribute to the three workstreams: private capital mobilisation, diversity equity and inclusion and climate change
- Impact Investing Institute (2019)
- Key focus: To accelerate the growth and improve the effectiveness of the impact investing market in the UK and internationally.
- Our Role: We were a founding supporter of the initiative and sat on its advisory council. We were a member of the technical working group for a report on how to mobilise institutional capital for a just transition and over this year, we have contributed to developing the Just Transition label.
- National Business Initiative (2022)
- Key focus: To work towards sustainable growth and development in South Africa and shape a sustainable future through responsible business action.
- Our Role: We contribute to the working groups focused on South Africa’s net-zero transition and transition finance. We sponsored the NBI South African pavilion at COP27.
- Nature Action 100 (2023)
- Key focus: To drive greater corporate ambition and action to reverse nature and biodiversity loss.
- Our Role: We have joined a collaborative engagement looking to improve nature related disclosures across a list of focus companies.
- Net Zero Asset Managers Initiative (NZAMI) (2021)
- Key focus: The Net Zero Asset Managers initiative is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.
- Our Role: We are a signatory to the initiative and have set firmwide net zero targets. We have submitted our targets to the initiative and report on progress annually.
- PRI (2008)
- Key focus: To understand the implications of ESG factors and to support investor signatories in incorporating them into the investment process.
- Our Role: We are a signatory, participate in workstreams and present at UNPRI events. We have taken part in various collaborative engagements.
- Responsible Investment Association (RIA) Canada (2021)
- Key focus: To promote responsible investment in Canada’s retail and institutional markets.
- Our Role: We aim to support the RIA to deliver on its mandate of advancing responsible investment in Canada.
- Say on Climate (2020)
- Key focus: It is a collaborative effort between asset managers, asset owners, companies and other stakeholders to encourage companies to voluntarily submit their Climate Risk Transition Plan to a vote at their annual general meeting. We believe the ‘Say on Climate’ initiative will improve dialogue between companies and investors allowing shareholders to better assess the strength of the companies’ plans to address climate risk in their businesses.
- Our Role: In 2020, Ninety One became the first listed asset manager to become a signatory on the ‘Say on Climate’ initiative. We advocate for the uptake of an advisory resolution on transition plans at AGMs.
- SOAS China Institute (2021)
- Key focus: The Institute promotes interdisciplinary, critically informed research and teaching on China; it channels the unrivalled breadth and depth of expertise across a wide spectrum of disciplines on China to the wider worlds of government and business.
- Our Role: We aim to actively contribute to conversations with academics, diplomats and policy makers.
- Sustainable Markets Initiative (SMI) (2021)
- Key focus: It aims to lead and accelerate the world's transition to a sustainable future by engaging and challenging public, private and philanthropic sectors to bring economic value in harmony with social and environmental sustainability.
- Our Role: We are participants in the transition working group under the Asset Manager/Asset Owner Taskforce. This year we led the development of the Transition Categorisation framework.
- Sustainable Trading Initiative (2021)
- Key focus: It aims to transform ESG practices within the financial markets trading industry. The network brings firms together to devise practical solutions to industry specific ESG issues as well as providing a mechanism for self-assessment and benchmarking.
- Our Role: We are part of the Founder Member Group and attend meetings and working groups. Ninety One’s Global Head of Trading is an active board member.
- Task Force on Climate-related Financial Disclosures (TCFD) (2018)
- Key focus: To develop consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders.
- Our Role: We are a supporter of the recommendations and produce a TCFD report, which can be found within our Integrated Annual Report.
- Task Force on Nature-related Financial Disclosures (TNFD) Forum (2022)
- Key focus: To develop and deliver a risk management and disclosure framework for organisations to report and act on evolving nature-related risks, with the ultimate aim of supporting a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.
- Our Role: We aim to support any consultative work to develop the TNFD recommendations.
- Thinking Ahead Institute (2019)
- Key focus: To mobilise capital for a sustainable future. Its members comprise asset owners, asset managers and other groups motivated to influence the industry for the good of savers worldwide.
- Our Role: We are a founding member. We participate in the Institute’s working groups. In 2022 we took an active part in working groups covering ‘Investing for Tomorrow – Environment’, ‘Investing for Tomorrow – Society’ and made contributions to research white papers on these topics. We also campaigned for emerging markets to be treated separately to developed markets in working towards a fair transition in the global energy system.
- Transition Pathway Initiative (TPI) (2019)
- Key focus: To assess companies’ preparedness for the transition to a low-carbon economy, supporting efforts to address climate change.
- Our Role: We support the initiative and use the data it produces to assist our efforts to better understand climate risks and opportunities.
- World Benchmarking Alliance (WBA) (2017)
- Key focus: WBA has set out to develop transformative benchmarks that will compare companies' performance on the SDGs.
- Our Role: Our Chief Executive Officer, Hendrik du Toit is a Champion, and we participate in working groups contributing to the benchmark work. We contribute to the ‘Just Transition’ benchmark collective impact coalition.
Dialshifter
This fund is helping to ‘shift the dial from brown to green’ by…
The fund invests in companies with sustainable drivers that are helping to build a better world. Our investment philosophy is focused on pricing positive and negative externalities better than the market, meaning the fund invests in businesses that can deliver sustainable structural growth by providing solutions to sustainability challenges, and can effectively manage sustainability risks. Central to this is carbon reduction in line with the Paris Agreement; all companies we own must have verified science-based targets by 2030 and a large proportion of the portfolio is invested in companies providing decarbonization solutions across renewable energy, electrification and resource efficiency pathways.
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…
As a signatory to NZAMI, we are committed to setting out a plan which includes all our business activities and assets under management to reach net zero by 2050 or sooner. Please refer to the link below for details of our commitment:
https://ninetyone.com/en/united-kingdom/sustainability/our-commitment-to-net-zero
SDR Labelling:
Sustainability Impact label
Key Performance Indicators:
For each company the Fund invests in, a key performance indicator (KPI) representing the positive outcome of addressing the environmental and/or social challenges is identified, the company’s growth of the products and/or services which address these sustainability challenges is measured and progress towards pre-determined engagement milestones are reported annually.
In reporting on impact, we are transparent about our choice of KPI used to determine impact, and will explain any changes in these KPIs over time as data and company reporting evolves.
Literature
Fund Holdings
Voting Record
Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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Ninety One Global Sustainable Equity Fund |
Sustainability Tilt | Sustainability Impact label | OEIC | Global | Equity | 27/03/2001 | Oct 2024 | |
ObjectivesThe Fund aims to achieve total returns comprised of capital growth and income over the long-term. The Fund invests primarily (at least two-thirds) in the shares of companies around the world and in related securities (which includes, without being exhaustive, depositary receipts and equity linked notes). The Fund promotes environmental and/or social characteristics by investing in companies considered by the Investment Manager as having operations and/or business models that aim to minimise their harmful effects on society and the environment, or whose products and/or services seek to benefit society and the environment.
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Fund Size: £120.00m (as at: 31/03/2024) Total Screened Themed SRI Assets: £5326.00m (as at: 31/03/2024) Total Responsible Ownership Assets: £115962.00m (as at: 31/03/2024) Total Assets Under Management: £126026.00m (as at: 31/03/2024) ISIN: GB00B01VDL32 |
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Sustainable, Responsible &/or ESG OverviewThe Ninety One Global Sustainable Equity strategy is focused on identifying companies tackling the world’s sustainability challenges; it is an active global equity solution seeking companies with sustainable drivers that are helping to build a better world. Our process reflects our core beliefs of:
Portfolio holdings exhibit three characteristics, intended to generate through the cycle investment returns and sustainability impact:
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Primary fund last amended: Oct 2024 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
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.
Resource efficiency policy or theme
Find funds that have a policy or theme that relates to managing natural resources more efficiently. Funds with this policy will be likely to favour companies that make (or enable the) more efficient use of resources - and either avoid or encourage change amongst companies with lower standards. 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.
Waste management policy or theme
Find funds that have a written policy or theme on waste management - typically a view to encouraging higher levels of recycling and better efficiency / reducing waste. Nature & Biodiversity
Biodiversity / nature policy
Find funds that have a written biodiversity policy or theme aimed at encouraging and improving environmental protection and safeguarding the natural world (sometimes referred to as the preservation or enhancement of 'natural capital'). See eg https://www.un.org/en/climatechange/science/climate-issues/biodiversity 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.
Fossil fuel reserves exclusion
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
Clean / renewable energy theme or focus
Find funds where investment in clean / renewable energy companies an other assets is central to their investment selection strategy. The proportion of the fund that is directly or indirectly invested in renewable energy varies between funds and over time. See fund information for further details.
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
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.
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. Social / Employment
Favours companies with strong social policies
Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
Health & wellbeing policies or theme
Find funds with policies or themes that set out their approach to health and wellbeing issues. Funds of this kind typically aim to invest in companies with high standards - or encourage high standards. Themed funds are likely to have more of an emphasis on this area. Strategies vary. See fund information for further detail. 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.
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.
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. Meeting Peoples' Basic Needs
Water / sanitation policy or theme
Find funds that have policies or themes that set out their position on investment in the water sector and/or sanitation. Strategies vary. See fund information for further detail.
Healthcare / medical theme
Healthcare and or medical theme or area of investment - the fund may have a single theme or many themes 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.
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
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 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 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
Over 50% large cap companies
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Invests mostly in large cap companies / assets
Find funds that have SRI strategies and focus their investment stock selection on larger companies. (e.g. over circa £5-£10bn) 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.
Positive environmental impact theme
Find funds that specifically set out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Positive social impact theme
Find funds that specifically state that they aim to deliver positive social (i.e. people related) impacts and/or 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.
Invests in social solutions companies
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.
Invests in sustainability / ESG disruptors
Find funds that specifically set out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
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.
Publish ‘theory of change’ explanation
This fund has an explanation of the way in which the manager believes things need to change in order to deliver a more sustainable future, which they are working to help achieve. How The Fund Works
Positive selection bias
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.
Do not use stock / securities lending
This fund does not use stock lending for performance or risk purposes. Unscreened Assets & Cash
Assets typically aligned to sustainability objectives 70 - 79%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives 80 – 89%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives > 90%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets 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. Labels & Accreditations
SFDR Article 8 fund / product (EU)
Finds funds classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics with high governance also. These rules do not currently apply to UK funds so many managers may leave this field blank.
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.
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
Investment Association (IA) member
Fund management entity is a member of the Investment Association https://www.theia.org/ Engagement Approach
Engaging on climate change issues
Fund manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Engaging with fossil fuel companies on climate change
Asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Engaging to reduce plastics pollution / waste
Asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Engaging to encourage responsible mining practices
Asset manager has a stewardship / responsible ownership policy that means they are working to encourage more responsible mining practices - where environmental and social issues are properly dealt with by the companies they invest in.
Engaging on biodiversity / nature issues
The asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
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 human rights issues
Asset manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
Engaging on labour / employment issues
Asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
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
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.
Engaging on governance issues
Fund managers have stewardship strategies in place that focus on improving governance standards across investee assets
Engaging on mental health issues
Asset manager has stewardship strategy in place which involves discussing mental health issues with investee companies - with the aim of raising standards
Engaging on responsible supply chain issues
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards Climate & Net Zero Transition
Committed to SBTi / Science Based Targets Initiative
See https://sciencebasedtargets.org/ Transparency
Just Transition policy on website (AFM company wide)
This asset management company has published information on their website about the delivery of a 'just transition' - ie the delivery of the necessary shift to a sustainable future that takes full account of social implications - how change effects people. See eg https://www.unepfi.org/social-issues/just-transition/ or LSE Grantham
Dialshifter statement
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information. Sustainable, Responsible &/or ESG Policy:We believe in sustainability with substance. We see the shift towards sustainability as offering a once-in-a-generation opportunity and a fundamental reappraisal of value creation. The shift towards sustainability is already underway. Consumers are driving the shift as they are demanding more from the companies they use. Corporations are increasingly talking about sustainability and the durability of their operations. Academic evidence is increasingly showing that businesses that consider the impact of their operations on society and the environment outperform the market, while regulators are pushing for change.
We believe the world’s measure of success is in the process of shifting from a zero-sum game – where shareholder value is maximised at the expense of other stakeholders such as the environment, wider society and employees – into a world where considering these other stakeholders in business decisions creates greater value for all. This creates an important sustainability opportunity for companies that already adopt a multi-stakeholder mindset.
It is increasingly important for investors to understand and price externalities, understood as a company’s broader impact on the society in which it operates, where possible. Identifying companies capturing the sustainable growth opportunity in Emerging Markets, and managing their externalities, requires innovation and new tools beyond traditional financial analysis. There has in recent years been an over-reliance on third-party ESG ratings, which we believe increases the sustainability investment opportunity.
We take a fundamentally-driven approach; we focus on assessing company externalities (the impact companies have on the environment, society and employees) as a way to appraise the sustainability credentials of a company. We identify the material externalities created by a company on its stakeholders across natural, human and social capital.
The strategy employs a bespoke bottom-up investment process designed specifically for the relevant diverse universe of global equities that are best positioned to capture the long-term secular growth opportunities arising from the shift towards sustainability. We look to identify companies providing solutions to sustainability challenges where the corporate sector plays a key role, and which have significant potential for long-term, structural growth. We have developed methodologies to identify companies that we believe are genuinely providing sustainable solutions to unmet needs across six structural growth areas:
The investment process incorporates proprietary models, such as our sustainable revenues screen, our detailed company-level fundamental financial and risk modelling and corporate culture assessment, but ultimately relies on our qualitative decisions.
This structured and disciplined investment process is designed to efficiently focus analysts’ time on the deep fundamental research of a shortlist of companies that make it through our universe filter and idea generation, to identify businesses with sustainable drivers of structural growth, competitive advantages, and sustainable returns. The portfolio is then constructed from the bottom-up, based on the level of conviction in each position. Ongoing management and monitoring of holdings are intrinsically linked with our engagement work and active stewardship.
Process:The five defined stages to the investment process are described in further detail below:
The investment team constructs a sustainable investment universe by screening for companies with more than 50% of revenues across one or more of the Bloomberg Industry Classification Standards (BICS) categories we believe align to sustainability challenges. These companies have the potential to capture the long-term secular growth opportunities arising from the shift towards a more sustainable future. It is important to think not just about the direct beneficiaries of this sustainable transition, but the entire related supply chains that need to be built up. The universe comprises ~5,000 companies across sectors, regions, and market capitalisations. The investment team also filters based on our defined set of externalities and research- driven exclusions; these are not ethically or morally derived exclusions. These can be found on our website here.
The main source of idea generation is a ranking of the resultant universe based on key financial, sustainability and competitive advantage metrics that reflect the structural growth, competitive advantage, and sustainable return characteristics that we seek in businesses. The ranking stimulates team debate, whilst analyst experience and knowledge enable a qualitative overlay to broaden the idea pool as appropriate. The metrics chosen derives from decades of investment team and firm-wide experience as well as rigorous back-testing and relevant cross-sector analysis. This screen directs analyst research, which can then lead to further qualitative idea generation. We have also integrated an internal sustainability indicator into this part of the process. This indicator assesses companies across various sustainability and ESG factors that we've identified as being likely to have a financial impact on a company, with each company appraised relative to its sector. Once a company screens to be included in stage three (Fundamental Analysis), we perform our own sustainability analysis of the company. This is an integral part of the investment process as we believe that companies with strong sustainability characteristics, focused on minimising their negative externalities, can outperform over time.
Once a company comes through our idea generation screen, we move it to the next stage of the investment process where the team conducts the fundamental analysis to identify whether sustainability factors and competitive advantages are underpriced by the market. The first stage of our fundamental analysis process is focused on the company’s business model and whether it fits with our requirement for structural growth, sustainable returns and competitive advantage. At this stage we also carry out our own sustainability analysis by assessing the externalities generated by the company. When we are comfortable that the company fulfils our requirement and there are no material sustainability risks, we take it forward to a second, more detailed stage of fundamental analysis. We also conduct detailed fundamental analysis of sub-sectors and technologies exposed to the sustainable structural growth areas that we invest in. This helps us to inform and stress test our company models. See our paper “A sustainable investment edge” for more details on the structural growth we expect to see from these areas. The key areas of our company research are described below:
a) Company analysis and understanding on structural growth opportunity The investment team works through a rigorous checklist for each investment idea. We want to find the best companies in our universe which are intrinsically undervalued. The team conducts fundamental analysis by constructing detailed models. We build sustainability insights directly into our financial models, enabling us to construct portfolios of companies where the sustainable investment case is underappreciated by the market and where we therefore expect sustainability to be a driver of long-term alpha. Using our proprietary Capitals Framework, we assess companies qualitatively and quantitatively through a lens that incorporates relevant stakeholders, to evaluate how a company’s impacts on its stakeholders are likely to influence its growth and return potential.
b) Competitive advantage Market participants systematically underestimate the quantum and persistence of returns in cases where businesses have sustainable long-term competitive advantages. This results in exploitable inefficiencies. Our competitive advantage analysis can be simplified by answering the key questions/topics shown below:
We use these competitive advantage factors to determine the long-term sustainability of the business in question. In addition, we believe a strong balance sheet and outstanding management are also a competitive advantage and ensure we cover these factors during our fundamental analysis. We pay particular attention to having an informed perspective of the competitive advantage period and how that translates into the sustainable margin, cash flow generation and/or economic value added. Culture is an aspect of a company’s competitive advantage that we believe is often poorly understood by investors as it is challenging to evaluate, and consequently may be mispriced – suggesting an opportunity for active investors. We only buy a stock when we have made a culture assessment of a company, using our bespoke corporate-culture framework. This framework draws on insights from company meetings, academic collaborations, expert-network access and employee resources. The framework was developed from a collaborative research project between Ninety One’s Investment Institute and Alex Edmans, Professor of Finance at London Business School. For more information on our corporate culture work, refer to our paper “Culture as a driver of sustainable alpha”. The goal of this step is to identify areas of competitive advantage often overlook and mispriced. We believe all of this analysis helps us to identify companies that can create value by generating a return on investment.
c) Return profile and growth It is important to note that profitable growth and efficient use of capital is embedded within each of the above calculations. Structural growth and sustainable returns are two key drivers of our stock selection and analysis. We believe growth and compounding characteristics are key factors in determining a reasonable fair value for any company. In compounders, we are looking for enduring competitive advantages and companies with a durable and resilient outlook. We therefore do not claim to be only growth or only value investors, instead we invest in the leading companies within our universe where we believe there is underappreciated value.
d) Valuation The team conducts full financial and valuation analysis by constructing individual company models to determine the growth, earning, cash generation, and intrinsic value of the companies under review. Our proprietary equity models are maintained within the team and contain our own forecasts which embed our sustainability insights both on the impact opportunity side as well as from a risk and negative externality perspective. Research from earlier parts of the process is used and built on here. In undertaking full income statement, cashflow statement and balance sheet analysis we can focus on specific financial metrics which we believe to be the drivers of long-term returns. The output of the equity analysis is a target price for the company across different scenarios. The target price is based on three main components with returns and cash flow being prioritised:
e) Management,sustainability, and engagement assessment Capital allocation decisions and operational performance are important considerations for us when evaluating management. Much of these considerations feed into our competitive advantage and valuation work. We also place huge significance on sustainability factors as highlighted in our initial screens. Sustainability reports and net zero emissions targets are important throughout our fundamental analysis as well as topics featuring in team debates. This fundamental bottom-up research stage of the investment process also includes company meetings and onsite visits where we will focus on all the key factors mentioned above. We will only buy a stock for the portfolio after we have met with company management. When all factors described above score positively for an investment idea, we will add it to our list of best ideas1 and compare to the existing holdings.
The portfolio is constructed from the bottom-up in a benchmark-agnostic fashion, using the best ideas1 from previous stages of the investment process. We take an absolute contribution to risk-based approach to portfolio construction such that our highest-conviction stocks represent the highest contribution to risk. We consider elements such as the strength of sustainability credentials, competitive advantages, carbon footprint and trajectory and the contribution to the portfolio's overall risk. The portfolio is then reviewed at a sub-sector level with regards to overall risk budget, sub-sector risks, stress tests and style analytics metrics. Weightings may then be adjusted accordingly. We use MSCI Barra One for quantitative portfolio risk analysis and optimisation.
We believe that individual and collective engagements are powerful tools to effect positive change. We meet management and set engagement goals for all portfolio companies, with an explicit focus on the disclosure of KPIs that allow us to measure the impact of their products and services, growth of these KPIs, adoption of net-zero commitments and science-based targets, as well as to engage on any material sustainability or financial matters. Engagement is bespoke and generates information that feeds back into our portfolio monitoring, including valuable insights into company progress and any culture changes. Key principles of our engagement approach are set out below.
In our annual sustainability report, we provide transparency on positions and company engagement, as well as an explanation of why we believe the companies may see structural growth and have a competitive advantage.
Resources, Affiliations & Corporate Strategies:Sustainability knowledge and expertise is held across a number of areas of the business. The Sustainability Committee oversees the wider sustainability ecosystem in the business. Ninety One’s firm-wide sustainability initiatives are overseen by the Chief Sustainability Officer. This includes investment integration, advocacy, corporate transition to net zero and developing and implementing efforts to mobilise dedicated funding for an inclusive net zero transition.
Ultimately, the investment teams have responsibility for managing sustainability risks and opportunities within their investment process through their integration frameworks. We place a big emphasis on ensuring that the investment teams have the appropriate knowledge, insights, data and tools so that the expertise is a truly integrated part of the investment process. The investment teams are supported by dedicated ESG specialists across our Sustainability and Investment Risk team. We also have further expertise that we can draw upon from the portfolio managers managing our dedicated sustainable strategies, and other sustainability specialists that are dedicated to individual investment teams.
We seek to contribute meaningfully to the conversation and to encourage a deeper focus on sustainability-related issues in all of the jurisdictions where we invest. We may collaborate with other investors as part of an engagement strategy if it can contribute to achieving our engagement objectives. Our membership of regional and global organisations facilitates this.
The following details our firmwide collaborative partnerships and our role: (Organisation name and start date)
Dialshifter (Fund)This fund is helping to ‘shift the dial from brown to green’ by… The fund invests in companies with sustainable drivers that are helping to build a better world. Our investment philosophy is focused on pricing positive and negative externalities better than the market, meaning the fund invests in businesses that can deliver sustainable structural growth by providing solutions to sustainability challenges, and can effectively manage sustainability risks. Central to this is carbon reduction in line with the Paris Agreement; all companies we own must have verified science-based targets by 2030 and a large proportion of the portfolio is invested in companies providing decarbonization solutions across renewable energy, electrification and resource efficiency pathways.
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… As a signatory to NZAMI, we are committed to setting out a plan which includes all our business activities and assets under management to reach net zero by 2050 or sooner. Please refer to the link below for details of our commitment: https://ninetyone.com/en/united-kingdom/sustainability/our-commitment-to-net-zero
SDR Labelling:Sustainability Impact label Key Performance Indicators:
For each company the Fund invests in, a key performance indicator (KPI) representing the positive outcome of addressing the environmental and/or social challenges is identified, the company’s growth of the products and/or services which address these sustainability challenges is measured and progress towards pre-determined engagement milestones are reported annually. In reporting on impact, we are transparent about our choice of KPI used to determine impact, and will explain any changes in these KPIs over time as data and company reporting evolves. LiteratureFund HoldingsVoting Record |