Redwheel Biodiversity Fund
SRI Style:
Environmental Style
SDR Labelling:
Not eligible to use label
Product:
SICAV/Offshore
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
14/11/2023
Last Amended:
Jul 2024
Dialshifter (
):
Fund Size:
£0.60m
(as at: 30/04/2024)
Total Screened Themed SRI Assets:
£57.90m
Total Assets Under Management:
£14196.90m
ISIN:
LU2670377105, LU2670377527, LU2670377956
Objectives:
Investment objective
To provide long-term capital growth, by investing primarily in a portfolio of global companies acting to support the United Nations Sustainable Development Goals ("SDGs"), in particular biodiversity by reducing or limiting negative impact of human’s activities on biodiversity.
The fund promotes environmental and social characteristics as defined by Article 8 of SFDR and therefore does not have a Sustainable Investment objective.
Sustainable, Responsible
&/or ESG Overview:
The Redwheel Biodiversity Strategy follows a bottom-up, fundamental approach to assessing companies on both financial and non-financial factors and has a long-term investment horizon.
The Strategy focuses on high-quality, growth-oriented companies whose products and services can contribute to ecosystem preservation. The Investment Team look for opportunities across a range of industries and geographies and have identified four key investment themes across the long-term biodiversity opportunity:
- Sustainable Materials
- Terrestrial Ecosystems
- Aquatic Ecosystems
- Circularity and Waste Management
The Strategy intends to invest in companies that positively contribute to environmental and/or social objectives, including the United Nations Sustainable Development Goals (SDG). Focus is placed on the following SDGs:
- Clean Water and Sanitation (SDG 6)
- Responsible consumption and production (SDG 12)
- Life below water (SDG 14)
- Life on Land (SDG 15)
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/
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Fund has a theme or investment strand focused on the shift to a circular economy (where products are reused and recycled not incinerated or dumped). See eg https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview
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
A significant focus on investments that aim to protect, improve and, or restore natural habitat.
Fund has a significant focus or emphasis on investment in nature and biodiversity related opportunities
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.
Ethical Values Led Exclusions
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
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)
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
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.
50% of fund assets are regarded by the fund manager as being significantly focused on providing solutions to environmental or social challenges. Strategies vary.
How The Fund Works
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds that 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 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
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 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:
Themes
The mitigation of biodiversity loss is the Strategy’s overarching investment theme. Under this broad theme, the Team have identified four portfolio themes where we see most potential for investor action:
- Sustainable Materials including Infrastructure materials (alternative building materials which minimise biodiversity loss, additional materials which support biodiversity net gain in urban areas); Energy transition materials (substitutes and alternatives which minimise & mitigate biodiversity loss); Manufactured materials (e.g. apparel); Enablers of supply chain visibility in verticals where biodiversity is a material risk
- Terrestrial Ecosystems including Agriculture – crops (farm to plate – including waste); Agriculture – husbandry (farm to plate – including waste); Urban ecosystems (e.g. permeable surfaces; water control, green walls/roofs, green bridges); Pollution remediation and control & ecosystem monitoring
- Aquatic Ecosystems including Aquaculture & aquatic products (sustainable feed, solutions which limit nutrient pollution, protect against the spread of disease and parasites into wild fish stock); Water storage, use and efficiency; Water system management (including flood and drought protection measures); Pollution remediation and control & ecosystem monitoring
- Circularity and Waste Management including Resource efficiency; Material circularity (all action to enable and deliver re-use, re-cycling, recovery - inc. geolocation/traceability, if for this purpose); Pollution mitigation, management, waste treatment & storage
We believe that investing in solutions that can mitigate biodiversity loss is a long-term structural growth opportunity and we look to invest in companies that have the ability to progress the preservation of biodiversity and embrace the opportunity to deliver an uplift in value both to our investors via share price increase and to society as a whole through products and solutions designed to respond to these pressures.
.
Screening
From the initial universe of 9,100 equities in the MSCI ACWI IMI we apply the first screen based on:
- Sector-level exclusions: tobacco, controversial weapons, military contracting, thermal coal
- International norms: exclude companies non-Compliant with the UN Global Compact, OECD Guidelines on Multinational Enterprises and UN Guiding Principles on Business and Human Rights
- Worst performers on ESG risks - Sustainalytics have 5 categories of ESG risk. Level 5 is deemed Severe Risk and this category is excluded.
This reduces the investment universe to 6,500 stocks. Non-relevant sectors (Real Estate, Financials, Energy and Communications Services) are removed from this Responsible Investment Universe to create a Relevant Sector Universe of around 3,000 stocks.
The Team develops a proprietary Solutions Framework to highlight the existing, emerging and available solutions in the market that have the potential to mitigate biodiversity loss aligned to each portfolio theme. The Team then identifies companies who are providing these solutions by performing quantitative and qualitative analysis. This creates the Biodiversity Investable Universe comprised of around 400 companies.
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Exclusions
The Redwheel Biodiversity Fund discloses as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) and the Strategy has adopted the following hard exclusions with respect to companies that:
- Engage in the production of tobacco
- Generate 10% or more of revenue from the distribution of tobacco
- Engage in the production or distribution of controversial weapons
- Generate 10% or more of revenue from military contracting
- 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
- Are non-compliant with the OECD Guidelines for Multinational Enterprises
- Are non-compliant with the UN Guiding Principles on Business and Human Rights
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.
Hard exclusions prevent new investment in securities of issuers considered to be in breach of the criteria described. The issuers of securities held in the Strategy are also regularly monitored. If a security currently held in the Fund moves into breach of the above exclusion criteria, the Team will act in line with the Redwheel Breaches Policy, which is available upon request.
Process:
Once the opportunity set has been screened down to the 400 stock Biodiversity Investable Universe the Investment Team conducts detailed industry analysis to identify those companies that have the ability to succeed sustainably and profitably.
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Industry analysis:
- Size and longevity of addressable market:
- Assess the timing and durability of demand for a solution, incorporating regulatory and market drivers.
- Consider regional variations in need.
- Scope incumbent technologies, likely new entrants, potential substitutes.
- Assessment of the sustainability of the full supply chain including:
- Origin of materials.
- Impact of extraction materials.
- Providers of equipment and services through the supply chain.
- Labour practices
- Transportation and logistics
- Identify policy, geopolitical and ESG risks:
- Identifying companies and solutions which currently benefit from or have resilience to these factors.
- Highlighting companies or solutions where satisfactory mitigation of risk is unachievable or probable.
- Industry vertical analysis:
- Consider full industry vertical, from extraction of raw materials to end of life.
- Assess capital intensity and competitive positioning of each step in the process.
- Identify areas with greatest value add and therefore potential for attractive financial returns and non-financial contribution.
- Consider potential for mitigation of risk:
- Investment team experience to identify potential solutions.
- Peer analysis for best-in-class approach, leveraging Greenwheel expertise where appropriate.
- Evaluation of the value and feasibility of change.
- Engagement where appropriate.
Industry analysis narrows the universe further to 200 companies that undergo detailed fundamental and ESG analysis to create a watchlist. The fundamental analysis process includes financial, ESG & Sustainability assessment to clarify a company’s positioning for the identified opportunity, the risks it faces and its ability to translate this into attractive returns to shareholders.
Sustainable Assessment – what USP does the company have?
- How well does the solution align with the opportunity identified as attractive
- Is it aligned with the direction of regulation and technological innovation
- Ability to achieve material gains in mitigation of biodiversity loss
- Differentiation of current products - additionality
- R&D capability and commitment – intentionality and durability of additionality
- Does the company create negative externalities? Do these restrict the business in its delivery of sustainability and financial performance
Management team – ability to deliver a credible Strategy
- Management experience, skills and track record
- Strategic commitment for growth aligned with the transition ahead
- Appropriate strategy to harness the opportunity and mitigate risk
ESG risk and mitigation – what are the material risks to the business?
- Material environmental risks, robustness of mitigation strategy, potential for improvement, need for further investment
- Labour practices - ability to attract and retain skilled personnel; demonstration of standards sufficient to secure position in the supply chain; risks associated with litigation or fines
- Relations with local stakeholders
- Governance – for corporate stability, decision making and delivery of strategic goals
- Disclosure – financial and non-financial
Financial analysis
- Durability of demand
- Competitive analysis and market share expectations
- Pricing power
- Cost control / robustness of supply chains / need to invest upstream
- Sustainable or improving profitability
- Investment needs – capex and R&D
- Cash conversion
- Appropriate funding structure
- Return on invested capital and marginal return on new capital
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External / Internal Resource
The Team has access to various external research providers to support the investment process:
- Bloomberg (provides real time and historic share prices and company fundamental data, idea screening and portfolio risk management and serves as a news and research aggregator).
- Sustainalytics (a provider of ESG and corporate governance research and ratings).
- Third party research platforms including Berenberg and TD Cowen
We believe there is a great advantage to the Redwheel structure where the investment team independently leads the engagement strategy, combining the financial and non-financial analysis, engaging with companies, and deciding on voting positions. This avoids a disjointed approach where these responsibilities are siloed into separate departments and decisions made without financial context. This Redwheel approach relies on supporting functions that are well integrated into the process.
The Investment Team works closely with Greenwheel, Redwheel’s Thematic Sustainability Research Team. Within the Greenwheel team specifically, the Team have access to a Climate and Environment Research lead and a Climate and Environment analyst. The Investment Team commission sustainability research from Greenwheel which enables the Team to establish a ‘theory of change’ for each portfolio theme. Typically, each ‘theory of change’ will provide:
- Analysis of the risks posed to biodiversity by activities within each theme
- Consideration of appropriate metrics to assess the positive contribution of potential solutions
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 |
|
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Redwheel Biodiversity Fund |
Environmental Style | Not eligible to use label | SICAV/Offshore | Global | Equity | 14/11/2023 | Jul 2024 | |
ObjectivesInvestment objective To provide long-term capital growth, by investing primarily in a portfolio of global companies acting to support the United Nations Sustainable Development Goals ("SDGs"), in particular biodiversity by reducing or limiting negative impact of human’s activities on biodiversity. The fund promotes environmental and social characteristics as defined by Article 8 of SFDR and therefore does not have a Sustainable Investment objective. |
Fund Size: £0.60m (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: LU2670377105, LU2670377527, LU2670377956 |
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Sustainable, Responsible &/or ESG OverviewThe Redwheel Biodiversity Strategy follows a bottom-up, fundamental approach to assessing companies on both financial and non-financial factors and has a long-term investment horizon.
The Strategy focuses on high-quality, growth-oriented companies whose products and services can contribute to ecosystem preservation. The Investment Team look for opportunities across a range of industries and geographies and have identified four key investment themes across the long-term biodiversity opportunity:
The Strategy intends to invest in companies that positively contribute to environmental and/or social objectives, including the United Nations Sustainable Development Goals (SDG). Focus is placed on the following SDGs:
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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/
UN Sustainable Development Goals (SDG) focus
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Circular economy theme
Fund has a theme or investment strand focused on the shift to a circular economy (where products are reused and recycled not incinerated or dumped). See eg https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview 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
Nature / biodiversity based solutions theme
A significant focus on investments that aim to protect, improve and, or restore natural habitat.
Nature / biodiversity focus
Fund has a significant focus or emphasis on investment in nature and biodiversity related opportunities 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. Ethical Values Led Exclusions
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users. Governance & Management
Governance policy
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.
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 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
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.
Over 50% in assets providing environmental or social ‘solutions’
50% of fund assets are regarded by the fund manager as being significantly focused on providing solutions to environmental or social challenges. Strategies vary. How The Fund Works
Positive selection bias
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.
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.
Assets mapped to SDGs
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
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
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. Fund Management Company InformationAbout The Business
Boutique / specialist fund management company
Find fund management companies that are smaller or specialise in particular areas - notably, ideally ESG related. Strategies vary.
Responsible ownership / stewardship policy or strategy (AFM company wide)
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
ESG / SRI engagement (AFM company wide)
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Vote all* shares at AGMs / EGMs (AFM company wide)
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Responsible ownership / ESG a key differentiator (AFM company wide)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Responsible ownership policy for non SRI funds (AFM company wide)
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.
Integrates ESG factors into all / most (AFM) fund research
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM company wide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
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
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
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
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.
Employ specialist ESG / SRI / sustainability researchers
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.
Use specialist ESG / SRI / sustainability research 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.
ESG specialists on all investment desks (AFM company wide)
Finds organisations / fund managers that have one or more ESG/sustainability experts on all investment teams or 'desks' (all asset types) Accreditations
UK Stewardship Code signatory (AFM company wide)
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
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:Themes The mitigation of biodiversity loss is the Strategy’s overarching investment theme. Under this broad theme, the Team have identified four portfolio themes where we see most potential for investor action:
We believe that investing in solutions that can mitigate biodiversity loss is a long-term structural growth opportunity and we look to invest in companies that have the ability to progress the preservation of biodiversity and embrace the opportunity to deliver an uplift in value both to our investors via share price increase and to society as a whole through products and solutions designed to respond to these pressures. . Screening From the initial universe of 9,100 equities in the MSCI ACWI IMI we apply the first screen based on:
This reduces the investment universe to 6,500 stocks. Non-relevant sectors (Real Estate, Financials, Energy and Communications Services) are removed from this Responsible Investment Universe to create a Relevant Sector Universe of around 3,000 stocks.
The Team develops a proprietary Solutions Framework to highlight the existing, emerging and available solutions in the market that have the potential to mitigate biodiversity loss aligned to each portfolio theme. The Team then identifies companies who are providing these solutions by performing quantitative and qualitative analysis. This creates the Biodiversity Investable Universe comprised of around 400 companies. . Exclusions The Redwheel Biodiversity Fund discloses as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) and the Strategy has adopted the following hard exclusions with respect to companies 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. Hard exclusions prevent new investment in securities of issuers considered to be in breach of the criteria described. The issuers of securities held in the Strategy are also regularly monitored. If a security currently held in the Fund moves into breach of the above exclusion criteria, the Team will act in line with the Redwheel Breaches Policy, which is available upon request.
Process:Once the opportunity set has been screened down to the 400 stock Biodiversity Investable Universe the Investment Team conducts detailed industry analysis to identify those companies that have the ability to succeed sustainably and profitably. . Industry analysis:
Industry analysis narrows the universe further to 200 companies that undergo detailed fundamental and ESG analysis to create a watchlist. The fundamental analysis process includes financial, ESG & Sustainability assessment to clarify a company’s positioning for the identified opportunity, the risks it faces and its ability to translate this into attractive returns to shareholders.
Sustainable Assessment – what USP does the company have?
Management team – ability to deliver a credible Strategy
ESG risk and mitigation – what are the material risks to the business?
Financial analysis
. External / Internal Resource The Team has access to various external research providers to support the investment process:
We believe there is a great advantage to the Redwheel structure where the investment team independently leads the engagement strategy, combining the financial and non-financial analysis, engaging with companies, and deciding on voting positions. This avoids a disjointed approach where these responsibilities are siloed into separate departments and decisions made without financial context. This Redwheel approach relies on supporting functions that are well integrated into the process.
The Investment Team works closely with Greenwheel, Redwheel’s Thematic Sustainability Research Team. Within the Greenwheel team specifically, the Team have access to a Climate and Environment Research lead and a Climate and Environment analyst. The Investment Team commission sustainability research from Greenwheel which enables the Team to establish a ‘theory of change’ for each portfolio theme. Typically, each ‘theory of change’ will provide:
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 |