Redwheel UK Climate Engagement Fund
SRI Style:
Other
SDR Labelling:
Not eligible to use label
Product:
SICAV/Offshore
Fund Region:
UK
Fund Asset Type:
Equity
Launch Date:
13/10/2010
Last Amended:
Jul 2024
Dialshifter (
):
Fund Size:
£24.90m
(as at: 30/04/2024)
Total Screened Themed SRI Assets:
£57.90m
Total Assets Under Management:
£14196.90m
ISIN:
LU0542757652, LU0539372689, LU1017299584, LU1017299824
Contact Us:
Objectives:
To provide an and capital return by investing primarily in UK equity securities.
The fund promotes environmental and social characteristics as defined by Article 8 of SFDR and therefore does not have a Sustainable Investment objective.
The fund does have a climate aim. The team use an in-depth climate assessment framework, combined with intensive engagement applied to carbon intensive companies and companies financing or facilitating the fossil fuel industry.
Sustainable, Responsible
&/or ESG Overview:
The Redwheel UK Climate Engagement Fund follows a UK equity strategy with an objective to provide an income and capital return and an explicit climate aim. The strategy follows a strict valuation discipline and a long-term investment horizon.
A key component of the strategy is the use of an in-depth climate assessment framework, combined with intensive engagement applied to carbon intensive companies and companies financing or facilitating the fossil fuel industry.
The team conduct thorough analysis of business models and transition plans to identify companies that are transitioning, or have the potential to transition, their businesses to align with the goals of the Paris Agreement. Through engagement, the team seek to influence companies, particularly in carbon intensive sectors, to improve on their transition plans and to accelerate those plans where appropriate. A series of hard exclusions apply in respect of some products and business practices that encompass harmful activities.
Primary fund last amended:
Jul 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/
Climate Change & Energy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
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 have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail.
Ethical Values Led Exclusions
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
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.
Governance & Management
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
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 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)
How The Fund Works
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Find funds that use internationally agreed standards, conventions and 'norms' to help direct where the fund can and cannot invest (e.g. the UN Global Compact, UN Sustainable Development Goals). Read fund literature for further information.
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
This fund has changed its mandate. It was previously not an ESG/sustainable fund. The information published here shows the upgraded fund strategy.
This fund does not use stock lending for performance or risk purposes.
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.
Fund Management Company Information
About The Business
Find fund management companies that are smaller or specialise in particular areas - notably, ideally ESG related. Strategies vary.
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.
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
This asset management company invests in companies which have recently listed on a stock exchange (which is important as it can help grow new businesses).
Asset management company has investments in bonds designed to meet sustainability requirements - however these assets may not be 'ringfenced' for this purpose. See fund manager website for details.
Collaborations & Affiliations
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Fund management entity is a member of the Investment Association https://www.theia.org/
Resources
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Find a fund management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
Finds organisations / fund managers that have one or more ESG/sustainability experts on all investment teams or 'desks' (all asset types)
Accreditations
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'.
Engagement Approach
Find fund management companies that regularly initiate or run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
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.
Fund managers have stewardship strategies in place that focus on improving governance standards across investee assets
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
Company Wide Exclusions
Find fund management companies (not funds) that avoid investment in 'controversial weapons' across all of their funds and other investment vehicles.
Climate & Net Zero Transition
Fund management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
Find fund management companies that are working with the companies they invest in to encourage reductions in carbon dioxide and other greenhouse gas emissions.
This asset management company plans to achieve net zero greenhouse gas (CO2e) emissions with the help of a scheme that will lock away an amount of carbon that is equivalent to the company’s own emissions – so that the end result is ‘net zero’. Calculations and scope vary.
Find fund management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions.
Transparency
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Fund management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
Sustainable, Responsible &/or ESG Policy:
The Investment Manager conducts thorough analysis of business models and transition plans to identify companies that are transitioning, or have the potential to transition, their businesses to align with the goals of the Paris Agreement. The Investment Manager targets companies that have already set out transition plans but may also invest in companies without formal transition plans if the Investment Manager concludes that the company has the willingness and ability to transition. The fund will not invest in companies that are not considered to have the willingness and ability to transition.
The Investment Manager’s engagement strategy draws on industry-supported assessment framework, developed by the IIGCC to maximise the chances of achieving progress through alignment and collaboration. Through engagement, the Investment Manager seeks to influence companies, particularly in carbon intensive sectors, to improve on their transition plans and to accelerate those plans where appropriate. Engagement will be focused on the assessment of a company’s performance against the assessment framework. When progress is not as expected, an escalation mechanism will be employed. A series of hard exclusions apply in respect of some product and business practices that encompass harmful activities.
However, environmental, social and governance risks are also assessed as a fundamental part of the investment process. The climate aim does not diminish the importance of assessing and if necessary, engaging on other environmental or social issues. There is an assessment made of such non-financial risks, drawing from experience, from the SASB Materiality Map and from other sources including a company’s own assessment. Governance is fundamental in underpinning climate objectives and creating long-term shareholder value.
As part of the strategy, a series of hard exclusions is applied with respect to some product and business practices that encompasses harmful activities that are not tolerated over any time frame. Hard exclusions apply in respect of issuers that:
- Engage in the production of tobacco
- Generate 10% or more of revenue from the distribution of tobacco
- Generate 10% or more of revenue from thermal coal extraction
- Generate 10% or more of revenue from thermal coal power generation
- Are non-compliant with the UN Global Compact
These criteria are applied in addition to the firm-wide exclusion of companies considered to be involved in the production of cluster bombs, landmines and bio/chemical weapons.
Process:
In the context of the climate aim, an initial assessment for inclusion in the portfolio is the willingness or potential of a company to make a transition to a low carbon economy, and to align with net zero. The assessment does not rule out companies based on no stated intention to transition or commitment to net zero, the lack of such a commitment does however increase the challenge. A company’s willingness to entertain such strategic changes can shift dramatically with a change of leadership and offers an even greater reward in both shareholder returns and driving real world decarbonisation. The strategy invests across the investment universe, it is not confined to carbon intensive sectors.
The fund uses a foundational framework, developed by the IIGCC, to guide stewardship to deliver the rapid acceleration in decarbonisation required to halve emissions by 2030 and put the world on course for Net Zero by 2050 or sooner. This framework forms the basis for the team’s core climate assessment of the five to ten carbon intensive companies in the strategy. Investee companies falling outside of this group are also subject to a climate assessment with the aim of having their plans validated by the Science Based Target initiative or similar body. Using a recognised framework such as the IIGCC’s allows the team to leverage collaboration with other investors and aligns closely with the CA100+ net zero benchmark. Based on the framework and in-depth analysis, Key Performance Indicators (KPIs) are set for individual companies.
The strategy is about active ownership, and engagement with companies is the most fundamental part of this strategy. The team aim to be constructive partners to our investee companies. Acting as owners, the team seek to support directors in making the right decisions to progress transition plans, in helping them understand the weaknesses of those plans and to help them understand better the evolving demands of capital allocators and the capital markets. The team try to make engagements holistic, putting transition plans into the context of investor demand for the shares of a company, the increasing capital flows to ESG funds, and the changing expectations of capital allocators with respect to their own climate commitments.
Engagement topics are developed based on the assessment of alignment and the progress on KPIs identified through the core climate assessment framework, along with other non-financial issues outside of climate that are material for an investee company. Engagements are also used to acknowledge progress that has been made, to ensure directors feel appreciated in the work they have done and encouraged to continue in making progress. Companies may externally appear united in vision and strategy; the truth is usually the opposite with various internal stakeholders and factions pulling in different directions. It is therefore important to voice shareholder support for progress made and thus support management in their internal struggles. Having clear shareholder support is very powerful within internal discussions.
Generally, the team wish to keep engagement constructive, however escalation of engagements is often required to gain the attention of a company, to ensure they are listening and understand the team’s point of view. Therefore, when progress is not as expected, an escalation mechanism is employed. The escalation mechanism is not rigidly prescriptive as progress will require varying levels of escalation and de-escalation.
Resources, Affiliations & Corporate Strategies:
Our investment teams and wider business are supported and challenged by specialists split across three sustainability verticals:
- The Strategy, Governance and Policy team is led by Olivia Seddon-Daines and is responsible for policy design, sustainability strategy setting, building and operating governance processes, communication and advisory with investment teams, and communication with a range of internal and external key stakeholders. Olivia is supported by Djolan Captieux who joined Redwheel in January 2024.
- The Stewardship and Regulatory Change team is led by Chris Anker who supports investment teams with engagement and proxy voting and, working closely with our Legal and Compliance teams, monitors and evaluates global regulatory initiatives relating to responsible investment
- The Thematic Sustainability Research team, Greenwheel, is led by Stephanie Kelly. This team’s remit is to produce thematic sustainability research commissioned by Redwheel investment teams and support Redwheel’s responsible, transition and sustainable investment strategies at each stage of the product life cycle. Stephanie is supported by a team of specialists with experience from within and outside the asset management industry. Her team includes Jessica Wan who leads social research and Paul Drummond who leads climate and environment research both of whom joined in 2023. The final member of the team, Anna Polise, joined in 2022 as Climate Research Analyst.
Olivia, Chris and Stephanie report directly into our Head of Investments Arthur Grigoryants who is executive level sponsor for our firm's activities relating to responsible investment. His regular interactions with investment team heads ensures frequent reflection on evolving client interests.
All investment teams are encouraged to actively engage and participate in the work of Redwheel’s Sustainability Forum, whose principal aim is to support debate and discussion on ESG integration approaches. The forum meets on a monthly basis and provides a key mechanism for our business and our investment teams to:
- develop and improve - through collaboration - organisation level and Team level policies and practices with respect to sustainability.
- share knowledge and understanding of current best practices in respect of company ESG risk management, ESG integration, engagement activities, voting, dealing with client expectations, reporting etc.
- monitor and agree current priorities for engagement and collaboration activities.
- develop and implement education programs for the investment Teams. This could include updates on regulatory frameworks, insights into client expectations, thematic topics (climate, biodiversity etc.)
- leverage Redwheel level membership in organisations/initiatives
Governance and oversight is provided via the Redwheel Sustainability Committee. Standing committee members in addition to Heads of sustainability functions include CEO Tord Stallvik and Head of Investments Arthur Grigoryants, who are both members of Redwheel’s Executive Committee. The Sustainability Committee meets formally on a quarterly basis to review sustainability issues both in a corporate sense and in terms of the delivery of responsible investment in practice by our investment teams.
Redwheel are a signatory or a supporter of the following organisations and initiatives:
- UN Principles for Responsible Investment (2020)
- Investor Forum (2020)
- ClimateAction100+ (2021)
- NatureAction (2023)
- Institutional Investors Group on Climate Change (IIGCC, 2021)
- Investment Association – Sustainability & Responsible Investment Committee (2021)
- Corporate Governance Forum (2021)
- Pensions and Lifetime Savings Association - Stewardship Advisory Group (2021)
- Sustainability Accounting Standards Board (SASB) (2021)
- CDP (2021)
- UN Global Compact (2022)
- UK Stewardship Code (2022)
- Financing a Just Transition (2022)
- Access to Medicines Index (2023)
SDR Labelling:
Not eligible to use label
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
|
|---|---|---|---|---|---|---|---|---|
Redwheel UK Climate Engagement Fund |
Other | Not eligible to use label | SICAV/Offshore | UK | Equity | 13/10/2010 | Jul 2024 | |
ObjectivesTo provide an and capital return by investing primarily in UK equity securities. The fund promotes environmental and social characteristics as defined by Article 8 of SFDR and therefore does not have a Sustainable Investment objective. The fund does have a climate aim. The team use an in-depth climate assessment framework, combined with intensive engagement applied to carbon intensive companies and companies financing or facilitating the fossil fuel industry. |
Fund Size: £24.90m (as at: 30/04/2024) Total Screened Themed SRI Assets: £57.90m (as at: 30/04/2024) Total Assets Under Management: £14196.90m (as at: 30/04/2024) ISIN: LU0542757652, LU0539372689, LU1017299584, LU1017299824 Contact Us: investorsupport@redwheel.com |
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Sustainable, Responsible &/or ESG OverviewThe Redwheel UK Climate Engagement Fund follows a UK equity strategy with an objective to provide an income and capital return and an explicit climate aim. The strategy follows a strict valuation discipline and a long-term investment horizon. A key component of the strategy is the use of an in-depth climate assessment framework, combined with intensive engagement applied to carbon intensive companies and companies financing or facilitating the fossil fuel industry. The team conduct thorough analysis of business models and transition plans to identify companies that are transitioning, or have the potential to transition, their businesses to align with the goals of the Paris Agreement. Through engagement, the team seek to influence companies, particularly in carbon intensive sectors, to improve on their transition plans and to accelerate those plans where appropriate. A series of hard exclusions apply in respect of some products and business practices that encompass harmful activities. |
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Primary fund last amended: Jul 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/ Climate Change & Energy
Climate change / greenhouse gas emissions policy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
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
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
Social policy
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail. Ethical Values Led Exclusions
Ethical policies
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
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. Governance & Management
Governance policy
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Avoids companies with poor governance
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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 Fund Governance
ESG integration strategy
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Over 50% large cap companies
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Invests mostly in large cap companies / assets
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Negative selection bias
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
ESG weighted / tilt
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Combines ESG strategy with other SRI criteria
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Norms focus
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Focus on ESG risk mitigation
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
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Converted from ‘non ESG’ strategy
This fund has changed its mandate. It was previously not an ESG/sustainable fund. The information published here shows the upgraded fund strategy.
Do not use stock / securities lending
This fund does not use stock lending for performance or risk purposes. Intended Clients & Product Options
Intended for investors interested in sustainability
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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. Fund Management Company InformationAbout The Business
Boutique / specialist fund management company
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Responsible ownership / stewardship policy or strategy (AFM company wide)
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ESG / SRI engagement (AFM company wide)
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Vote all* shares at AGMs / EGMs (AFM company wide)
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Responsible ownership / ESG a key differentiator (AFM company wide)
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Responsible ownership policy for non SRI funds (AFM company wide)
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Integrates ESG factors into all / most (AFM) fund research
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In-house diversity improvement programme (AFM company wide)
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Invests in newly listed companies (AFM company wide)
This asset management company invests in companies which have recently listed on a stock exchange (which is important as it can help grow new businesses).
Invests in new sustainability linked bond issuances (AFM company wide)
Asset management company has investments in bonds designed to meet sustainability requirements - however these assets may not be 'ringfenced' for this purpose. See fund manager website for details. Collaborations & Affiliations
PRI signatory
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Investment Association (IA) member
Fund management entity is a member of the Investment Association https://www.theia.org/ Resources
In-house responsible ownership / voting expertise
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Employ specialist ESG / SRI / sustainability researchers
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Use specialist ESG / SRI / sustainability research companies
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ESG specialists on all investment desks (AFM company wide)
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UK Stewardship Code signatory (AFM company wide)
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Regularly lead collaborative ESG initiatives (AFM company wide)
Find fund management companies that regularly initiate or run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
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 on governance issues
Fund managers have stewardship strategies in place that focus on improving governance standards across investee assets
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 Company Wide Exclusions
Controversial weapons avoidance policy (AFM company wide)
Find fund management companies (not funds) that avoid investment in 'controversial weapons' across all of their funds and other investment vehicles. Climate & Net Zero Transition
Net Zero commitment (AFM company wide)
Fund management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
Encourage carbon / greenhouse gas reduction (AFM company wide)
Find fund management companies that are working with the companies they invest in to encourage reductions in carbon dioxide and other greenhouse gas emissions.
Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide)
This asset management company plans to achieve net zero greenhouse gas (CO2e) emissions with the help of a scheme that will lock away an amount of carbon that is equivalent to the company’s own emissions – so that the end result is ‘net zero’. Calculations and scope vary.
In-house carbon / GHG reduction policy (AFM company wide)
Find fund management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions. Transparency
Publish responsible ownership / stewardship report (AFM company wide)
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Full SRI / responsible ownership policy information on company website
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Publish full voting record (AFM company wide)
Fund management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards. Sustainable, Responsible &/or ESG Policy:The Investment Manager conducts thorough analysis of business models and transition plans to identify companies that are transitioning, or have the potential to transition, their businesses to align with the goals of the Paris Agreement. The Investment Manager targets companies that have already set out transition plans but may also invest in companies without formal transition plans if the Investment Manager concludes that the company has the willingness and ability to transition. The fund will not invest in companies that are not considered to have the willingness and ability to transition. The Investment Manager’s engagement strategy draws on industry-supported assessment framework, developed by the IIGCC to maximise the chances of achieving progress through alignment and collaboration. Through engagement, the Investment Manager seeks to influence companies, particularly in carbon intensive sectors, to improve on their transition plans and to accelerate those plans where appropriate. Engagement will be focused on the assessment of a company’s performance against the assessment framework. When progress is not as expected, an escalation mechanism will be employed. A series of hard exclusions apply in respect of some product and business practices that encompass harmful activities. However, environmental, social and governance risks are also assessed as a fundamental part of the investment process. The climate aim does not diminish the importance of assessing and if necessary, engaging on other environmental or social issues. There is an assessment made of such non-financial risks, drawing from experience, from the SASB Materiality Map and from other sources including a company’s own assessment. Governance is fundamental in underpinning climate objectives and creating long-term shareholder value. As part of the strategy, a series of hard exclusions is applied with respect to some product and business practices that encompasses harmful activities that are not tolerated over any time frame. Hard exclusions apply in respect of issuers that:
These criteria are applied in addition to the firm-wide exclusion of companies considered to be involved in the production of cluster bombs, landmines and bio/chemical weapons. Process:In the context of the climate aim, an initial assessment for inclusion in the portfolio is the willingness or potential of a company to make a transition to a low carbon economy, and to align with net zero. The assessment does not rule out companies based on no stated intention to transition or commitment to net zero, the lack of such a commitment does however increase the challenge. A company’s willingness to entertain such strategic changes can shift dramatically with a change of leadership and offers an even greater reward in both shareholder returns and driving real world decarbonisation. The strategy invests across the investment universe, it is not confined to carbon intensive sectors.
The fund uses a foundational framework, developed by the IIGCC, to guide stewardship to deliver the rapid acceleration in decarbonisation required to halve emissions by 2030 and put the world on course for Net Zero by 2050 or sooner. This framework forms the basis for the team’s core climate assessment of the five to ten carbon intensive companies in the strategy. Investee companies falling outside of this group are also subject to a climate assessment with the aim of having their plans validated by the Science Based Target initiative or similar body. Using a recognised framework such as the IIGCC’s allows the team to leverage collaboration with other investors and aligns closely with the CA100+ net zero benchmark. Based on the framework and in-depth analysis, Key Performance Indicators (KPIs) are set for individual companies.
The strategy is about active ownership, and engagement with companies is the most fundamental part of this strategy. The team aim to be constructive partners to our investee companies. Acting as owners, the team seek to support directors in making the right decisions to progress transition plans, in helping them understand the weaknesses of those plans and to help them understand better the evolving demands of capital allocators and the capital markets. The team try to make engagements holistic, putting transition plans into the context of investor demand for the shares of a company, the increasing capital flows to ESG funds, and the changing expectations of capital allocators with respect to their own climate commitments.
Engagement topics are developed based on the assessment of alignment and the progress on KPIs identified through the core climate assessment framework, along with other non-financial issues outside of climate that are material for an investee company. Engagements are also used to acknowledge progress that has been made, to ensure directors feel appreciated in the work they have done and encouraged to continue in making progress. Companies may externally appear united in vision and strategy; the truth is usually the opposite with various internal stakeholders and factions pulling in different directions. It is therefore important to voice shareholder support for progress made and thus support management in their internal struggles. Having clear shareholder support is very powerful within internal discussions.
Generally, the team wish to keep engagement constructive, however escalation of engagements is often required to gain the attention of a company, to ensure they are listening and understand the team’s point of view. Therefore, when progress is not as expected, an escalation mechanism is employed. The escalation mechanism is not rigidly prescriptive as progress will require varying levels of escalation and de-escalation.
Resources, Affiliations & Corporate Strategies:Our investment teams and wider business are supported and challenged by specialists split across three sustainability verticals:
Olivia, Chris and Stephanie report directly into our Head of Investments Arthur Grigoryants who is executive level sponsor for our firm's activities relating to responsible investment. His regular interactions with investment team heads ensures frequent reflection on evolving client interests.
All investment teams are encouraged to actively engage and participate in the work of Redwheel’s Sustainability Forum, whose principal aim is to support debate and discussion on ESG integration approaches. The forum meets on a monthly basis and provides a key mechanism for our business and our investment teams to:
Governance and oversight is provided via the Redwheel Sustainability Committee. Standing committee members in addition to Heads of sustainability functions include CEO Tord Stallvik and Head of Investments Arthur Grigoryants, who are both members of Redwheel’s Executive Committee. The Sustainability Committee meets formally on a quarterly basis to review sustainability issues both in a corporate sense and in terms of the delivery of responsible investment in practice by our investment teams.
Redwheel are a signatory or a supporter of the following organisations and initiatives:
SDR Labelling:Not eligible to use label |
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