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Responsible investment

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Integral to our investment philosophy

Responsible investment (RI) has long been integral to our investment research and decisions and our approach to business more broadly. The rationale for responsible investment is clear: companies with sustainable business models that look to the future have more potential to deliver value to all stakeholders, including shareholders. As a founding signatory of the United Nations’ Principles for Responsible Investment (PRI), responsible investment has been an established pillar of our business for well over a decade.

  • At the heart of our RI approach is a strong research capability embedded within our investment process
  • Our research is supported by proprietary RI ratings that enable us to assess material Environmental, Social and Governance (ESG) risks and opportunities for over 8,000 companies worldwide
  • As active managers, engagement is key and we have a strong record in influencing positive change through stewardship and voting
  • We have a solid culture of collaboration that underpins our research and investment approach
  • We offer a range of dedicated RI strategies, including our innovative Social Bond franchise, for clients seeking to more actively promote ESG factors or achieve specific sustainable outcomes
PRI rating

We strive to be responsible stewards of our clients’ assets, allocating their capital within our framework of robust research and good governance. The integration of ESG considerations within our research builds a fuller picture of the risks and future return prospects of all investment opportunities.

Research

A deep research base

We believe responsible investment research is fundamental research. We conduct original, independent, forward-looking research that aims to drive consistent long-term returns for our clients.

Our portfolio managers consider the additive insights of ESG factors when judging the sustainability and long-term value creation of portfolio companies. Integrating these ESG factors into our investment process helps them make broader-based investment decisions.

Our proprietary RI ratings reflect our data-driven, evidence-based approach and provide our investment team with a robust responsible investment framework to assess material ESG risks and opportunities for over 8,000 companies worldwide. In addition to proprietary analytics, our RI analysts also conduct independent thematic sustainability research that provides investment insight across multiple sectors – providing a more holistic view of investment opportunities.

RI factors
Collaboration enhances decision-making

Our dedicated RI analysts are integral to our global research team and share the same reporting line. Our research culture is embedded in our equity, fixed income, real estate, macro, and data science teams who continuously collaborate and share insights throughout the firm.This collaboration makes our investment decisions and stewardship activities more informed and makes it easier to identify material opportunities and risks that protect the clients’ interests and the capital they entrust to us.

Identifying opportunities and risks: a thematic approach

In addition to the quantitative rating, our RI analysts also conduct a qualitative analysis of companies, sectors and themes concerning ESG and other sustainability considerations.  We focus on a subset of eight of the 17 UN Sustainable Development Goals (UNSDGs) that we deem the most material to investments. Our thematic research explores investor topics such as energy transition, human capital development, and carbon policy. This thematic research is always investment-focused and highlights risks and opportunities for sectors and companies from an RI perspective.

A thematic approach
View our latest Responsible Investment Quarterly report here:

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Q4 2020 RI Report (Retail)
View previous reports:

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Q3 2020 RI Report (Retail)

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Q1 2020 RI Report (Retail)

Proprietary Ratings

Assessing material risks and opportunities

As an active manager, we must consider factors that pose a risk to clients’ assets – or increase their value.

In operation since 2018, our proprietary ratings equip our investment team with a robust ESG framework and enhanced analysis of over 8,000 companies around the world. The ratings help identify and assess potentially material risks and opportunities beyond what can be captured by conventional analysis – making them a crucial part of our fundamental research toolkit.

Stewardship

Powering change

Our stewardship activities intensify our understanding of our exposure to risks and opportunities that bear on our ability to deliver sustainable long-term value creation for clients.

We comply with several stewardship codes around the globe, including the UK Stewardship Code, where we are a “Tier I” asset manager signatory and the Investor Stewardship Group (ISG) Principles.

Engagement: adding to investment insights across all asset classes
We engage to gain deeper research insights, build relationships with companies and influence for change. We believe engagement enhances research and investment: it detects inflection points and long-term trends; it influences companies’ standards of ESG risk management and sustainability.
When deciding whether or not to engage, we consider various factors including:
  • the material significance of an issue to the company
  • the risk to our clients
  • the size of our holding
  • our opportunity to collaborate
  • and our ability to effect change
Meeting

We set clear objectives ahead of each engagement meeting and track them on a regular basis. We disseminate globally throughout the firm the research and analysis emerging from this monitoring.

Proxy voting: making our clients’ voices heard

We vote actively at company meetings. We view this as one of the most effective ways of signalling approval (or otherwise) of a company’s governance, management, board, and strategy and an active way to drive positive change. We carry out voting for our clients in all markets, voting for all our funds and for those clients who delegate authority to us. We vote in consideration of all relevant factors to support the best economic outcome in the long-run.

Each year we cast proxy votes on approximately 6,500 shareholder meetings across 70 countries. 

Climate change

Evolving climate insights

We consider climate in both our research and our stewardship – including engagement and voting. We prioritise climate change issues that are material to our investments. For example, climate issues are financially material to the utility, fossil fuel and chemical sectors, so we appraise climate change in particular detail in these cases.

When examining climate change and material climate risks, we draw on the materiality framework developed by the Sustainability Accounting Standards Board (SASB) and the disclosure standards consistent with the Task Force on Climate-related Financial Disclosures (TCFD). We also work with the CDP (formerly Carbon Disclosure Project), a non-profit that helps companies report their environmental impact.

Climate change

Industry collaborations

Signatories and affiliations: Coalitions to promote RI

We promote the value of responsible investing by taking part in industry working groups and initiatives.
We also demonstrate our commitment to responsible investing by being signatories to various codes and groups, including:
  • The United Nations Principles for Responsible Investment (PRI). We were a founding signatory in 2006. Which means that responsible investment has been an established pillar of the business for well over a decade.
Signatory of PRI logo
  • UK Stewardship Code. This Code, maintained by the UK’s Financial Reporting Council, sets out a number of commonly agreed-upon principles for institutional investors’ stewardship of their shareholdings. Through these principles, the Code improves the quality of engagement between institutional investors and companies. Making governance more effective and efficient and increases long-term risk-adjusted returns to shareholders.
  • Investor Stewardship Group. This US network of investors and asset managers promotes good practice in stewardship and corporate governance.
ISG logo
  • UK Women in Finance Charter. We were the first asset manager signatory. Signatories support the advancement of women in financial services. They also set targets and implement strategies appropriate to their organisation and report on progress against these targets.
Initiatives: delivering benefits

We have collaborated on various thematic and policy initiatives, including:

  • The introduction of green gilts in the UK. The idea of a green gilt builds on the growing issuance of environmental and social sovereign bonds around the globe. It marks an important step forward in the development of the global green bond market by showing how the money raised can simultaneously deliver environmental benefits, reduce inequality and help us build back better.
Initiatives arrows

Policies and Disclosures

View our disclosures:

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Sustainable Finance Disclosure Regulation – Articles 3 & 5

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Sustainable Finance Disclosure Regulation – Article 4

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Sustainable Finance Disclosure Regulation – Article 10

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About us

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Responsible business

Our new Responsible Business Report outlines our commitment to managing our business in a responsible and transparent manner. This includes how we serve our costumer, manage their assets, support and develop our employees and contribute to the communities we are part of.