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Fund EcoMarket

the sustainable, responsible and ethical investment information hub

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SRI Classification

SRI Attributes (primary entries only)

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Displaying 370 options from Fund EcoMarket
Print Fund Name SRI Style Product Region Asset Type Launch Date More info
Aegon Ethical Managed (Flexible Target) Pn range Negative Ethical Pension Global Mixed Asset 27/01/2016
NextEnergy Solar Fund Limited Red Ord Npv Environmentally Themed Investment Trust UK Equity 24/04/2014
OMW EdenTree Amity Sterling Bond Ethically Balanced Life UK Fixed Interest 16/10/2008
Stewart Investors Asia Pacific Sustainability A GBP Acc Sustainability Themed OEIC/Unit Trust Asia Pacific Equity 19/12/2005 More Info (click to view)

SRI / Ethical Overview

The Stewart Investors sustainability portfolios aim to generate long-term, risk-adjusted returns for clients by investing in companies which are positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate. Investment decisions around sustainability are based on three key points: Identifying companies who manage sustainability risks and opportunities and those with a positive sustainability impact; Inclusion of environmental, social and corporate governance matters in investment research; Engaging directly with companies on identified sustainability issues. At the heart of the Stewart Investors philosophy is the principle of stewardship. We are active owners and stewards of the companies in which we invest.

 

Our emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing and while we do no formal negative screening, we are unlikely to invest in companies operating in high risk sectors, because of their poor long-term sustainable development positioning.

 

SRI / themed / ethical assets under management – overview

 

  • Fund Size (GBP):   £436 million as at 31 March 2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £13 billion managed by the Stewart Investors Sustainable Funds Group
  • Total value of assets covered by responsible ownership policy:   n/a
  • Total assets under management:   £23.8 billion as at 31 March 2017

 

SRI Policies (Primary strategy in bold)

  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.

SRI Features

  • RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
  • Sustainability themed Find funds where there is a significant emphasis on sustainability issues either as its primary strategy or as a core strategy that compliments other criteria. (This may apply to a number of different SRI Styles). Such funds will consider environmental and social issues when making stock selection decisions. Read fund literature for further information.
  • Aims to generate positive impacts Find funds that aim to help deliver positive social or environmental impacts or outcomes through their investment decisions - which typically involves holding companies that are viewed as being necessary or beneficial. Strategies and approaches vary. A small number of funds have recently started to measure outcomes (see 'Measures Impacts' in the Policy filter). This is a new area - so most funds do not do this yet. See fund literature for further information.
  • Available via an ISA Find funds that are available via a tax efficient ISA product wrapper

Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

The principle of stewardship is central to Stewart Investors’ investment philosophy and has been since 1988. All the Stewart Investors’ investment strategies strive to integrate sustainability considerations into every investment decision. It is not treated as an optional bolt-on. The Sustainable Funds Group within the wider investment team takes this one step further by focusing on long-term sustainable development as a key driver of the investment process. Sustainability is an integral component of the investment process, and is viewed as a driver of returns in common with consideration of other investment factors.

 

We believe our job is to entrust our clients’ capital to good quality companies with strong management teams and sound long-term growth prospects.

 

Each investment is a decision to purchase not a piece of paper or an electronic Bloomberg ticker, but part of a real business with all the rights and responsibilities that go with this ‘share’ of the ownership of the company. We take these rights and responsibilities seriously. We also believe the way we behave as investment professionals and the role we play in the broader industry are important for our own sustainability.

We seek to invest only in good quality companies. We focus on the quality of management, franchise and financials. By analysing the sustainable development performance and positioning of companies we can better measure less tangible elements of quality and identify less obvious risks. We invest in those companies we believe are particularly well positioned to deliver positive long-term returns in the face of the huge sustainable development challenges facing all countries today. Our emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing.

 

We are long-term investors. We strive to make investment decisions with a minimum five-year time horizon. We have an absolute return mind-set, defining risk as losing client money, rather than deviation from any benchmark index. We focus as much on the potential downside of our investment decisions as on the anticipated upside. The identification of long-term sustainable development risks thus becomes an extremely important way of managing risk. In addition, our willingness to differ substantially from index weightings, both country and company, means we are not obliged to be invested in any company or country if we have particular sustainability concerns.

 

 

Resources, Affiliations & Corporate Strategies

Overview of resources, affiliations and corporate strategies:

(e.g. What inhouse/external research resources are employed? What is the fund manager’s role? Who does what? What external organisations do you subcontract to or work alongside?)

 

The emphasis is very much on the Stewart Investors team of analysts to identify and analyse companies, and sustainability and investment issues. The primary source of sustainability related information is one-on-one meetings with senior management. We undertake approximately 1300 such meetings each year across Stewart Investors. We are particularly interested in companies which embrace the underlying spirit of sustainability, rather than simply taking a compliance driven, box-ticking approach. Assessing the attitude and priorities of senior management is crucial.

 

We augment internal research with the use of external research. We are now able to drive and tender research to a range of researchers, from investment banks to non-government organisations (NGOs) and independent consultants that we believe will contribute to and enhance our investment decision making over time. Some themes that we have tendered include:

 

  • Diversity in corporate Asia;
  • Sales practices of Asian pharmaceuticals;
  • GEM leaders in packaging solutions;
  • US remuneration practices;
  • ESG leaders in mining; and
  • Fossil fuel dependent capital equipment companies.

 

Our current and previous tenders can be viewed on our website. http://www.stewartinvestors.com/en/research-tenders/

 

 

Aviva F&C Responsible Income EP Ethically Balanced Pension UK Equity Income 01/02/2007 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "BMO (F&C) Responsible UK Income" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Jupiter Ecology S4 Environmentally Themed Life Global Equity 01/01/1970
Aviva Liontrust UK Ethical Pn S2 Negative Ethical Pension UK Equity 09/05/1999
Wesleyan Ethical Shares Pn Negative Ethical Pension UK Equity 19/12/2011 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Animal testing exclusion policy Find ethical investment options that avoid companies that are involved in testing their products on animals. Ethical fund strategies vary - some exclude all companies that test on animals, others allow companies that test for medical purposes or where required by law. Read fund details for fund specific information.

SRI Features

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SRI / Ethical Policy

Invests via Kames Ethical Equity fund

Resources, Affiliations & Corporate Strategies

Aviva Royal London Select Portfolio (50%-100% Shares) Sustainability Themed Life Global Mixed Asset 05/04/2006
Aviva Liontrust Sustainable Future Global Growth S1 Sustainability Themed Life Global Equity 24/06/2001 More Info (click to view)

SRI / Ethical Overview

This life product is linked to the Liontrust Sustsainable Future Global Growth Fund. More detailed infromation on its SRI / Ethical approach can be found under that fund in the OEIC Product listing. 

SRI Policies (Primary strategy in bold)

  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.

SRI Features

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

M&G PP Ethical Pn Ethically Balanced Pension UK Equity 08/12/1999
Scot Wid Environmental Pn S2 Environmentally Themed Pension UK Equity 28/07/2000 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Scot Wid Environmental Investor" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.

SRI Features

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Liontrust UK Ethical NU Pn Negative Ethical Pension UK Equity 09/05/1999 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Liontrust UK Ethical" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Scot Eq Kames Ethical Corporate Bond Negative Ethical Life Europe >50% UK Fixed Interest 15/01/2007
Phoenix Wealth AB Ethical Retirement 2005-2007 Pn Core Range Unclassified Pension Global Mixed Asset 02/01/2013
Aviva Liontrust Sustainable Future Absolute Growth Pn S2 Sustainability Themed Pension Global Equity 05/04/2001 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Liontrust Sustainable Future Absolute Growth" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.

SRI Features

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

SIP Jupiter Ecology Environmentally Themed Pension Global Equity 12/01/2009 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Jupiter Ecology" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.

SRI Features

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Vanguard SRI Global Stock Fund (UCITS) [note limited exclusions] Negative Ethical SICAV/Offshore* Not Set Unclassified 23/10/2011 More Info (click to view)

SRI / Ethical Overview

Limited avoidance / few negative screens

SRI Policies (Primary strategy in bold)

  • - No primary policy area

SRI Features

  • Norms focus 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.
  • 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.
  • *Limited/few ethical exclusions Funds with this label tend to avoid fewer companies than other ethical funds or other options with avoidance criteria. Strategies vary. The fund may only avoid companies in one or two areas (eg only exclude tobacco or armaments companies) or they may exclude only the very worst companies when measured against internationally accepted standards (across potentially a range of areas). Read fund literature for further information.

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SRI / Ethical Policy

UCITS structure (not OEIC). Domiciled in Ireland with GBP share class.

Resources, Affiliations & Corporate Strategies

OMW Alfred Berg Penningmarknads Halibar Unclassified Life Not Set Fixed Interest 18/12/1992
Barclays Charity R Inc Unclassified OEIC/Unit Trust Global Unclassified 08/09/2013
BlackRock Kames Ethical Pn A Negative Ethical Pension UK Equity 28/03/2002
Cler Med Evergreen Pn Ethically Balanced Pension Global Equity 01/03/1990
Aviva Legal & General (PMC) Ethical UK Equity Index Pn Sustainability Themed Pension UK Equity 31/05/2011
Aviva HSBC Amanah Global Equity Index Pn Faith Based Pension Global Equity 01/12/2004
Aviva Liontrust Sustainable Future European Growth S1 Sustainability Themed Life Europe Ex-UK Equity 24/06/2001
Zurich Sterling Henderson UK Property Responsible Ownership Life UK Property 25/11/2002
Aviva Kames Ethical Equity EP Negative Ethical Pension UK Equity 04/11/2009 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Equity" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Henderson Responsible Ownership Corporate Activity Not Set Unclassified 29/01/2016 More Info (click to view)

SRI / Ethical Overview

Responsible ownership/investor stewardship – Henderson implements a comprehensive Responsible Investment Policy through active management, integration of ESG factors into investment decision making, voting and company engagement. This is applied across Henderson’s entire range of assets (£81.5bn). Link here: https://www.henderson.com/henderson/content/responsible-investment 

Engagement - We take an active approach to communicating our views to companies and seeking improvements where we believe there are shortcomings in performance, or a company has failed to apply appropriate standards, or to provide adequate disclosure. We will continue our dialogue with the company over an extended period if necessary. 

Voting - We believe that voting at general meetings is an important aspect of corporate stewardship and a means of signalling shareholder views on board policy, practices and performance. We exercise voting rights on behalf of clients at all UK and global meetings. Where voting impediments are in place, such as share blocking, we vote on a case-by-case basis.

Henderson's engage on all equity and fixed interest assets in all geographic regions.

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.

SRI Features

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Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that 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 fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
  • UK Stewardship Code signatory 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 as responsible 'company owners'.
  • Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
  • Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
  • Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

Henderson implements a comprehensive Responsible Investment Policy through active management, integration of ESG factors into investment decision making, voting and company engagement. 

The primary route for company engagement on stewardship-related issues is the regular meetings fund managers have with the companies that they invest in. Henderson’s fund managers hold in excess of 2,000 company meetings per year. Meetings incorporate a wide range of topics, including capital structure, mergers and acquisitions (M&A), management succession, and also environmental and social issues where relevant. The Governance and Responsible Investment (GRI) Team works closely with fund managers and highlights significant ESG risks ahead of company meetings. In addition, the team often leads on thematic and collaborative engagement work. During 2015 the GRI team engaged with over 100 companies on a wide range of ESG issues. 

The Henderson Global Responsible Investment Committee oversees and reviews the implementation of the Responsible Investment Policy and any other related corporate governance and responsible investment matters within Henderson that may arise. The committee is composed of representatives of our equities, fixed income and multi-asset teams, members of our Governance and Responsible Investment Team and our distribution team. The committee is responsible for evaluating the effectiveness of our corporate governance and corporate responsibility work in influencing companies and generating analysis of value to our investment decision-making. 

We exercise voting rights on behalf of clients at meetings of all companies in which we have a holding. The only exception to this is meetings where share blocking or other restrictions on voting are in place. Where we have taken a decision not to support a management proposal we will, where practicable, seek to raise the issues with the company prior to voting. To assist us in assessing the corporate governance of investee companies we subscribe to ISS (an independent proxy voting adviser). ISS provides voting recommendations based upon Henderson’s corporate governance policy. Corporate governance specialists in Henderson scrutinise the ISS custom policy research, and supplement this with in-house research and engagement. We disclose our global voting record in full on our website. 

Day-to-day responsibility for overseeing voting decisions lies with the Governance and Responsible Investment Team. Voting decisions are made in close consultation with fund managers and analysts. Ultimate voting authority rests with individual portfolio managers, who are responsible for ensuring that votes are exercised in the best interests of fund beneficiaries. Our voting decisions are implemented electronically via the ISS ProxyExchange voting platform.

Resources, Affiliations & Corporate Strategies

We take an active approach to communicating our views to companies and seeking improvements where we believe there are shortcomings in performance, or a company has failed to apply appropriate standards, or to provide adequate disclosure. We will continue our dialogue with the company over an extended period if necessary. Escalation of our engagement activities will depend upon the company’s individual circumstances. Actions may include communications through the company’s brokers, direct engagement with the chairman or non-executive directors or joint intervention with other shareholders, and where appropriate, voting against board proposals.  

We recognise that in many instances joint action by shareholders or bondholders has the potential to be more effective than acting alone. This is especially so where they have a clear common interest, such as in times of corporate distress. Our policy is to pursue opportunities for collaborative engagement in such circumstances.

Henderson is an active participant in a number of organisations that facilitate collaborative engagement, such as the NAPF, the Investment Association, the Investor Forum, the Asian Corporate Governance Association and the UNPRI Clearinghouse. Please see the Henderson responsible investment website for more details.  

The Governance and Responsible Investment (GRI) team works closely with our investment teams to assist in the implementation of our policy. The team provides support to fund managers on research and engagement and leads on our participation in various external ESG initiatives. The GRI team is also responsible for overseeing our proxy voting process on behalf of fund managers.

Menhaden Capital Plc ORD 1P Unclassified Investment Trust Global Equity 30/07/2015
Aviva Stewardship Corporate Bond Ethically Balanced Life UK Fixed Interest 04/12/2007
Aviva Royal London Sustainable World Trust S4 Sustainability Themed Life Global Mixed Asset 22/11/2010
EdenTree Responsible Ownership Corporate Activity Not Set Unclassified 29/01/2016 More Info (click to view)

SRI / Ethical Overview

We are active members of the UK Sustainable Investment and Finance Association (UKSIF) and have developed key partnerships with other bodies in this field. These include the UK Stewardship Code, UNPRI and IIGCC. Through those different organisations we collaboratively engage with companies in all sectors on a large variety of ESG issues.

EdenTree Investment Management (EIM) supports the principle of considered voting and will consequently endeavour to register and vote its proxies at all meetings in which it has a shareholding.

Our responsible ownership strategies apply to equity and fixed interest assets in all geographic regions.

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.

SRI Features

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Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that 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 fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
  • UK Stewardship Code signatory 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 as responsible 'company owners'.
  • Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
  • Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
  • Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

Through our membership of UNPRI, IIGCC and additional partnerships we collaboratively engage with companies on various issues. Those include climate change, sustainable agricultural practices, labour conditions in the supply chain and more specialised issues including fracking, Arctic drilling and modern slavery. We also lead engagement initiatives on our own when we believe this adds value, those include controversial weapons, sustainable sourcing practices or stem cell research. Our engagement initiatives also complement our voting policies such as recent work on gender diversity at Board level.

Resources, Affiliations & Corporate Strategies

We have a SRI team of three people responsible for the execution of our SRI policy; they focus on research, engagement and proxy voting. 

All UK proxy voting decisions (includes Guernsey, Jersey and Isle of Man) are taken and executed in-house, signed off by a Fund Manager. We take IVIS (Institutional Voting Information Service) provided by the Investment Association to inform thinking. We have appointed Glass Lewis & Co. to be our sole discretionary research and proxy execution provider in all jurisdictions other than the United Kingdom (including Guernsey, Jersey and the Isle of Man), delegating to it the responsibility for the instruction and execution of international proxy voting at all general and special international company meetings.

The team shares responsibility for company engagement, whether it is in house or in partnership with SRI organisations or other investors.

We are members of PRI, UKSIF, IIGCC and regularly support industry wide responsible stewardship initiatives.

Aviva Liontrust Sustainable Future Corporate Bond Pn S2 Sustainability Themed Pension Europe >50% UK Fixed Interest 05/04/2001 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Liontrust Sustainable Future Corporate Bond" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.

SRI Features

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Corporate Activity

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Impax Environmental Markets plc Environmentally Themed Investment Trust Global Equity 22/02/2002 More Info (click to view)

SRI / Ethical Overview

Impax Environmental Markets plc is a London listed investment trust pursuing a long-only global equity strategy investing in pure play - or "specialist" - environmental companies.  The trust has over 80% of the underlying revenue of the portfolio companies generated by sales of environmental products or services. It is also the first listed equity fund to demonstrate a net positive carbon impact.   

  

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
  • Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.
  • 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.
  • Measures positive impacts Find funds that measure the positive effect of their investment decision making on society and/or the environment. (This may involve eg carbon saved or jobs supported.) Managers aim to quantify the benefits they deliver (relative to other strategies or other benchmarks) to ensure they are delivering positive benefiting. This is a new and evolving area. See fund literature for information
  • Climate change / GHG policy Find sustainable investment and ethical fund options that pay significant attention to climate change related issues such as greenhouse gas/carbon emissions. Strategies vary, see fund literature for individual fund information.
  • Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.

SRI Features

  • Norms focus 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.
  • Positive selection bias Find funds where their main 'ethical approach' is to invest in companies that are considered to be positive/good or useful to people and/or the environment. The fund may also have negative avoidance criteria - see fund details to read more about fund strategies.
  • Sustainability themed Find funds where there is a significant emphasis on sustainability issues either as its primary strategy or as a core strategy that compliments other criteria. (This may apply to a number of different SRI Styles). Such funds will consider environmental and social issues when making stock selection decisions. Read fund literature for further information.
  • Favours cleaner, greener companies Find funds that aim to nvest in companies with strong environmental policies and practices. This may mean it invests in smaller companies offering market leading environmental services or products and/or larger companies that are working towards the improved management of their negative impacts. Read fund literature for further information.
  • Favours companies with strong social policies Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
  • Faith friendly Find funds that have attributes that commonly suit the aims of investors of faith - although they may not be specifically marketed as being only for religious investors. Strategies vary (as do investor aims). Read fund literature for further information.

Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Boutique/specialist fund manager Find options offered by smaller, more specialist fund management companies with a significant (or entire) emphasis on sustainable, responsible, ethical, ESG or responsible ownership related investment strategies. Note - strategies vary significantly. Check fund manager supplied links for further information.

SRI / Ethical Policy

Impax Environmental Markets plc is solely focused on investing in Resource Efficiency and Environmental Markets. The trust applies a positive screening approach to companies operating within these diverse high growth markets.

Resources, Affiliations & Corporate Strategies

We are members of, or signatory to the following:

  • UN Principles for Responsible Investment (UNPRI)

  • Institutional Investors Group on Climate Change (IIGCC)

  • Investor Network on Climate Risk (INCR)

  • Carbon Disclosure Project (CDP)

  • UK Sustainable Investment and Finance Association (UKSIF)

  • USSIF

  • UK Stewardship Code

  • Global Impact Investing Network (GIIN)

    Impax Asset Management has also been awarded a Queen’s Award for Enterprise: Sustainable Development, the UK’s highest business accolade for business success.

Aviva Kames Ethical Corporate Bond Pn Negative Ethical Pension Europe >50% UK Fixed Interest 31/01/2007 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Corporate Bond" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Pru Royal London Sustainable Leaders S2 Sustainability Themed Life UK Equity 25/01/2010
Scot Eq Henderson Global Care Managed Pn Ethically Balanced Pension Global Mixed Asset 30/10/2009 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Henderson Global Care Managed" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Liontrust Sustainable Future Cautious Managed S4 Sustainability Themed Life Global Mixed Asset 17/11/2014
Phoenix Wealth Jupiter Ecology P 1 Environmentally Themed Pension Global Equity 23/07/2006 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Jupiter Ecology" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Zurich F&C Stewardship Growth Pn CS1 Ethically Balanced Pension UK Equity 02/12/2013
RLP Ethical Bond Pn Unclassified Pension UK Fixed Interest 26/03/2010
Alquity Future World M USD Social Themed SICAV/Offshore* Global Equity 04/06/2014
Jupiter Responsible Income Acc Environmentally Themed OEIC/Unit Trust UK Equity Income 22/11/1999 More Info (click to view)

SRI / Ethical Overview

The Jupiter Responsible Income Fund focuses on investing in UK companies that are actively managing their environmental and social impact: good governance companies. The Fund will specifically avoid investing in companies associated with armaments, tobacco, nuclear power and animal testing for toiletries and cosmetics. Companies’ investment and financial prospects are assessed by the Jupiter Environmental Investment Team.

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.
  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
  • Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.
  • 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.
  • Animal testing exclusion policy Find ethical investment options that avoid companies that are involved in testing their products on animals. Ethical fund strategies vary - some exclude all companies that test on animals, others allow companies that test for medical purposes or where required by law. Read fund details for fund specific information.
  • Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
  • Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
  • Nuclear exclusion policy Find ethical funds (and other options) that have a published policy that sets out the fund's position on avoiding or limiting exposure to nuclear power. See fund literature for details of their policy.

SRI Features

  • RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
  • 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.
  • Balances company 'pros and cons'/best in sector Find ethical funds and other options that consider both the 'positive' things companies do and the 'negative' things they do in order to make balanced, often complex decisions about where they might invest. Such funds often invest in the best/most ethical companies across most industries ('best in sector'), rather than excluding entire sectors. The fund manager may combine this with 'responsible engagement' activity to encourage better business practices. See fund literature for specific policy explanations.
  • Eurosif transparency Find funds that meet the standards of the EUROSIF transparency Code. This means that they are a leading fund in terms of openness and transparency, publishing - for example - extensive information about where they invest and how they deal with companies.
  • *Limited/few ethical exclusions Funds with this label tend to avoid fewer companies than other ethical funds or other options with avoidance criteria. Strategies vary. The fund may only avoid companies in one or two areas (eg only exclude tobacco or armaments companies) or they may exclude only the very worst companies when measured against internationally accepted standards (across potentially a range of areas). Read fund literature for further information.

Corporate Activity

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SRI / Ethical Policy

The Jupiter Responsible Income Fund typically invests in companies that fall into one of two categories:

  • those that are actively managing their environmental and social impacts: good governance companies; or
  • those that are providing solutions to environmental and social problems.

Good governance companies are analysed under the following headings:

Leading company assessment: Companies that demonstrate leading practice amongst their industry peers in terms of policies, processes or performance in the areas of Corporate Responsibility and are demonstrating a commitment to managing their impacts and reporting on progress.

High impact companies: This includes companies operating in sectors with potentially high environmental and social impacts, such as the resources sector, which includes mining and oil & gas businesses. For inclusion in the Fund, these companies in particular are required to demonstrate outstanding practices in the areas mentioned above relative not only to their peer group but across all sectors. Where appropriate, emphasis is placed on engagement with high impact companies on such issues prior to taking a holding. Resource sector companies are also considered favourably if a significant part of their business is explicitly involved in providing environmental solutions. 

Limited impact company assessment: Companies that have low environmental impacts and manage these appropriately.

Small company assessment: Companies whose management have a commitment to improve environmental performance and can demonstrate that key social and environmental risks are managed well.

Continuous improvers: These companies have not yet reached leading company status but are typically working towards continuous improvement in policies, processes or performance in the areas of Corporate Responsibility and are demonstrating a commitment to managing their impacts and reporting on progress.

The Fund will be allowed to invest in almost all sectors of the stock market, including those companies whose products and services do not contribute directly to sustainable development.

The Jupiter Responsible Income Fund seeks to avoid investment in any company that is involved in activities which are believed to be incompatible with its environmental and social goals.
Examples of such negative activities include:

  • Manufacture of armaments;
  • Manufacture or sale of tobacco products; and
  • Generation of nuclear power.

Resources, Affiliations & Corporate Strategies

Ethical and environmental screening for the Jupiter Responsible Income Fund is undertaken by the Jupiter Sustainable Investment Team, a team of analysts specialising in the environmental performance of companies. The Team assesses companies against a set of ethical and environmental criteria 

Foresight Solar & infrastructure VCT PLC D Environmentally Themed Investment Trust Global Equity 06/04/2016
LV= Jupiter Ecology Pn Environmentally Themed Pension Global Equity 30/11/2007 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Jupiter Ecology" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

FNW F&C Responsible UK Income Ethically Balanced Life UK Equity Income 20/07/2006
SLFC Green Pn Environmentally Themed Pension Global Equity 25/06/1992
Scottish Widows ThreadneedleUK Social Bond Social Themed Life UK Fixed Interest 14/11/2016
Charity Assets Trust Acc Ethically Balanced OEIC/Unit Trust Global Mixed Asset 08/03/2012
Scot Eq Socially Responsible Equity Pn B Sustainability Themed Pension UK Equity 31/08/1998
Aberdeen Ethical World A Acc Ethically Balanced OEIC/Unit Trust Global Equity 30/04/1999 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

  • RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.

Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Canlife F&C Responsible UK Income LS4 Acc Ethically Balanced Life UK Equity Income 01/12/2005
Scot Eq Socially Responsible Equity Sustainability Themed Life UK Equity 31/08/1998
BMO Global Asset Management (EMEA) Responsible Ownership Corporate Activity Not Set Unclassified 29/01/2016 More Info (click to view)

SRI / Ethical Overview

At BMO Global Asset Management (EMEA), we have been a leader in the development of responsible investment strategies for almost three decades. Responsible Investment is central to our corporate identity and integral to our global investment philosophy. We offer a range of screened funds – the Responsible Funds range - and advisory solutions for retail and institutional investors across the investment spectrum from corporate credit to public and private equity. Our track record in ESG dates back to 1984, when we launched the UK’s first ethical strategy, the F&C Responsible UK Equity Growth strategy (formerly stewardship Growth). Our range has since broadened to include a range of ethical and thematic strategies, as well as a comprehensive approach to engagement and voting. In 2000, we launched our flagship reo® service which continues to be a market-leading engagement overlay service. As at 31 December 2015, reocovered a total of £71 billion in assets under engagement for both internal and external assets.

We have a range of policies in relation to our responsible investment activities which include:

  • Responsible Ownership Policy, giving an overview of our activities on integration, engagement and voting;
  • Corporate Governance Guidelines, which form the basis of our approach to voting as well as to engagement on governance issues. These guidelines are updated annually on the basis of international best practice and our own views. We believe in a transparent approach and publish all our voting decisions, as well as the rationale for these;
  • Responsible Investment Conflicts of Interest Policy, setting out how we identify and manage any potential conflicts relating to our activities in this area;
  • Statements of compliance against the UK Stewardship Code and transparency report for the UN Principles for Responsible Investment.


We are actively engaged in efforts to improve regulation and policies related to ESG issues, both through our membership of collaborative organisations such as the UN PRI (United Nations Principle for Responsible Investment), International Corporate Governance Network (ICGN) and Asian Corporate Governance Association (ACGA) and through our own policy work.

Engagement (underpinned by in-house and third party research), proxy voting and reporting have been an integral part of our reo® service since its launch in 2000.

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.

SRI Features

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Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that 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 fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
  • UK Stewardship Code signatory 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 as responsible 'company owners'.
  • Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
  • Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
  • Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

We have long believed that ESG factors can influence company performance and that consideration of ESG factors in the investment process can reduce investment risk and underpin long-term returns. We believe this is an important consideration that has relevance across asset classes and investment styles. ESG integration involves consideration of factors such as environmental performance, human rights, business ethics and corporate governance as a part of the investment decision-making process; we believe it should be a standard part of analysing the true long-term value of a business.

BMO Global Asset Management was a founder signatory to the UN PRI and has been committed since the launch of UN PRI in 2006. We receive annual feedback from the UN PRI on how we implement the six voluntary principles. In the last publishable scoring provided in 2011, we ranked top quartile on all six principles compared to our investment management peers.

For further information on BMO Global Asset Management’s capabilities in this area, a comprehensive range of related literature is available for download at the following address: http://www.bmogam.com/uk/institutional/products/responsible-investment/.

BMO Global Asset Management (EMEA) has a robust and well-established process in selecting companies and issues to engage with. We engage: proactively – by identifying through analysis weaknesses in companies; reactively – as incidents and events take place; and thematically – by identifying issues that are relevant across sectors or regions.

We measure our engagement success through “milestones,” which are positive engagement outcomes with companies. A milestone is an improvement in company ESG policy, management systems or practices, directly as a result of BMO Global Asset Management (EMEA) engagement.

BMO Global Asset Management (EMEA) offers a unique combination of specialist knowledge in the area of corporate governance and significant investment expertise. This gives us a deep understanding of the potential impact of corporate governance issues and matters arising from the Annual General Meeting (AGM)/Extraordinary General Meeting (EGM) business on company performance. Our GSI team approaches proxy voting analysis through an investment lens, with our voting decisions and our corporate governance guidelines and proxy voting policies informed by our experience of investing in and engaging with companies globally. We report to clients on our voting and engagement activities on a regular basis and publish our voting decisions immediately after company AGMs.

It is hard to identify a single pattern in our engagement outcomes, but some of the areas where we believe we have been particularly successful are:

  • Engagement with companies in historically under-engaged markets, where we have local language and knowledge. Although building relationships takes time we find that once trust is there, significant change can be achieved. Our Japanese team member is currently seeing major governance improvements in that market (in part a result of a changed political environment, but also investor pressure). Our Chinese team member is encouraged by a marked improvement in the quality of dialogue Chinese companies are willing to have, but this remains a market where the timescales for change are slow.
  • Engagement on corporate governance issues, particularly in markets where remuneration votes are mandatory (e.g. UK, US). Increasingly, we find companies approaching us for advice or consultation well ahead of their AGM, particularly given our status as a large asset manager. This means we can achieve results before the issue even goes to a vote.
  • Engagement with extractives companies. We have highly experienced engagers specialising in the mining and oil and gas sectors. As well as relationships with the majors, they have also engaged with lesser-known companies in their sectors, using the knowledge gained from their larger peers. They have also been engaging extensively on the ‘stranded assets’ issue; by its nature, the results of this will only be seen over time.

Resources, Affiliations & Corporate Strategies

The GSI team is based in our Head Office in London and is outlined below:

  • Vicki Bakhshi, Head of GSI, Region Covered: Global, Themes/Sectors Covered: Climate Change, 15 years sustainability/investment experience, 9 years at firm
  • Claudia Wearmouth, Director, Region Covered: Global, Themes/Sectors Covered: Responsible Funds, 13 years sustainability/investment experience, 8 years at firm
  • Matthias Beer, Associate Director, Region Covered: Europe, Themes/Sectors Covered: Oil and Gas sector, 14 years sustainability/investment experience, 6 years at firm
  • Juan Salazar, Associate Director, Region Covered: Latin America, Themes/Sectors Covered: Mining Sector / Human Rights, 17 years sustainability/investment experience, 6 years at firm
  • Yo Takatsuki, Associate Director, Region Covered:  Asia, Themes/Sectors Covered: Pharmaceuticals, 12 years sustainability/investment experience, 4 years at firm
  • Kalina Lazarova, Associate Director, Region Covered: Europe, Themes/Sectors Covered: European / Governance, 12 years sustainability/investment experience, 1 year at firm
  • Manuel Isaza, Associate Director, Region Covered: US & Latin America, Themes/Sectors Covered: North American Governance / Banks, 13 years sustainability/investment experience, 1 year at firm
  • Liat Reback, Analyst, Region Covered: Global, Themes/Sectors Covered: Consumer Staples, 2 years sustainability/investment experience, 2 years at firm
  • Tenisha Elliott, Data & Systems Analyst, 6 years sustainability/investment experience, 3 years at firm
  • Olivia Baker, Data & Reporting Analyst, 4 years sustainability/investment experience, 2 years at firm


Our in-house quantitative ESG Risk Tool, provides ESG related scores on more than 6,000 companies around the world. This includes input from external providers such as MSCI ESG. We focus on companies which represent the most material financial holdings in reo® clients’ portfolios. Our ESG Risk Tool captures ESG risks faced by a company as a result of its own policies and performance, as well as those faced more broadly as a result of sector and countries of operations.

BMO Global Asset Management (EMEA) draws on a range of specialist ESG research sources to inform proxy voting and engagement activities. We are using Institutional Shareholder Services (ISS) for global proxy voting research and vote execution services. In addition, we are using Institutional Voting Information Service (IVIS) for supplementary advice on FTSE All-Share companies. Other relevant resources include: sell-side brokers (corporate governance and sustainability research), MSCI (ESG factors), Governance Metrics International (corporate governance risk ratings). We also consider research by broader stakeholders including NGOs such as Transparency International (anti-corruption), Oxfam and Human Rights Watch. Our research is also informed by our networks that may provide briefings and publications, including the UN PRI, International Corporate Governance Network (ICGN) and Asian Corporate Governance Association (ACGA). We may also draw on external consultants with expertise in particular areas, although presently we have no such arrangements underway. Our providers are reviewed on a regular basis to ensure we are getting the best possible quality of service and analysis.

At BMO Global Asset Management (EMEA) we have always seen the importance of working with collaborative organizations and initiatives to achieve effective change. We are actively engaged in efforts to improve regulation and policies related to ESG issues, both through our membership of collaborative organisations such as the UN PRI, Investment Management Association (UK), Eumedion, Institutional Investors Group on Climate Change, International Corporate Governance Network, and through our own policy work.

The initiatives and organisations that we are involved with to promote ESG best practice are:

  • UN Principles for Responsible Investment (UN PRI) including workstreams on Human Capital, Palm Oil and representation on the Clearinghouse Steering Committee (Signatory at launch in 2006)
  • Carbon Disclosure Project (CDP) and CDP Carbon Action (Signatory at launch in 2000)
  • Institutional Investors Group on Climate Change (IIGCC) 2001
  • Access to Nutrition Index 2013
  • Global Network Initiative (GNI)
  • Interfaith Centre on Corporate Responsibility (ICCR)
  • Eumedion
  • Ceres
  • International Corporate Governance Network (ICGN)
  • Asian Corporate Governance Association (ACGA)
  • Global Investor Governance Network (GIGN)
  • Investment Management Association (IMA)
  • 30% Club (on board diversity)
  • Council of Institutional Investors (CII)
  • Extractives Industry Transparency Initiative (EITI)
  • The UK Sustainable Investment & Finance Association (UKSIF)


Examples of our work with various initiatives to promote responsible investment include our long term support of the UN Environment Programme Finance Initiative (UNEP FI), which our parent company, Bank of Montreal, is a member of. In 2009 we were a signatory to the 2009 Investor Statement on the Urgent Need for a Global Agreement on Climate Change, an initiative led by UNEP FI. We continue to collaborate with the initiative. An example of our work with UNEP FI is our recent endorsement of an investor statement encouraging the International Organization of Securities Commissions (IOSCO) to improve global corporate ESG disclosure. The Investor Initiative for Sustainable Exchanges (IISE), in which BMO Global Asset Management (EMEA) has participated actively for the past two years, collaborated with UN PRI and UNEP FI to launch this investor sign-on statement encouraging IOSCO to take specific steps to improve the state of global corporate ESG disclosure including: new rules assessing the current state of sustainability reporting and spearheading conversations with the regulatory community about setting global standards for ESG disclosure.

Aviva F&C Responsible UK Equity Income AP Ethically Balanced Pension UK Equity Income 01/02/2007
Halifax Ethical C Ethically Balanced OEIC/Unit Trust Global Equity 07/01/1994
Aviva Stewardship International Ethically Balanced Life Global Equity 01/12/2002
Aviva Liontrust Sustainable Future UK Growth S1 Sustainability Themed Life UK Equity 24/06/2001
Standard Life TM Fulcrum Diversified Absolute Return Pn S9 Unclassified Pension Global Mixed Asset 24/03/2014
L&G Ethical Inc Ethically Balanced OEIC/Unit Trust UK Equity 04/07/1999 More Info (click to view)

SRI / Ethical Overview

The L&G Ethical Trust is a UK passive equity fund, which excludes FTSE 350 listed companies that engage in unethical practices based on objective criteria. The fund uses the support of EIRIS, a specialist ethical research company, to establish benchmarking methodology for screening companies.

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.
  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
  • Animal welfare policy Find ethical fund options that have policies that require specific animal welfare standards to be adopted by investee companies in order for them to be considered for inclusion within the fund.
  • Animal testing exclusion policy Find ethical investment options that avoid companies that are involved in testing their products on animals. Ethical fund strategies vary - some exclude all companies that test on animals, others allow companies that test for medical purposes or where required by law. Read fund details for fund specific information.
  • Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
  • Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
  • Nuclear exclusion policy Find ethical funds (and other options) that have a published policy that sets out the fund's position on avoiding or limiting exposure to nuclear power. See fund literature for details of their policy.

SRI Features

  • 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.
  • *Limited/few ethical exclusions Funds with this label tend to avoid fewer companies than other ethical funds or other options with avoidance criteria. Strategies vary. The fund may only avoid companies in one or two areas (eg only exclude tobacco or armaments companies) or they may exclude only the very worst companies when measured against internationally accepted standards (across potentially a range of areas). Read fund literature for further information.

Corporate Activity

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SRI / Ethical Policy

The fund’s investment objective is to secure capital growth from a portfolio of securities for companies whose business conforms to a range of ethical and environmental guidelines set out below.

To apply these criteria we enlisted the support of EIRIS, a specialist ethical research company. Using their established benchmarking methodology for screening companies, we have established an objective basis for including or excluding companies from our ethical portfolio.

Legal & General Ethical Trust guidelines for establishing eligible companies
A company will be considered eligible unless it is involved in the following activities:

Animal testing
A company which has tested (or not disclosed otherwise) its cosmetics products on animals in the last five years, or since it had a fixed cut-off date policy. Or which has tested (or not disclosed otherwise) its cosmetic intermediates on animals in the last five years.

Gambling
A company which derives more than 10% of its reported annual turnover from gambling.

Health and safety convictions
Where any part of the company has been convicted following Health and Safety Executive prosecutions more than once in the last three years.

Human rights
A company with operations in at least five countries listed in EIRIS Category A.

Intensive farming
A company which derives any turnover from intensive pig or poultry farming.

Military – nature of involvement
A company:

  • where its products or services constitute the whole of a weapons system;
  • where its products or services constitute strategic parts for, or the whole of, a nuclear weapons system;
  • which supplies strategic services for nuclear bases;
  • which is a major producer with military sales activities in specific countries.


Nuclear power
A company that owns or operate nuclear power stations.

Ozone depleting chemicals
A company that manufactures or supplies any ozone depleting chemicals.

Pornography

  • which publishes, prints or wholesales pornographic magazines or newspapers.
  • which distributes ‘cut 18 certificate’ films or videos.


Tobacco
A company which derives more than 10% of its reported annual turnover from the production or sale of tobacco or tobacco products.

Sustainable timber
A company which:

  • EIRIS has identified as having an annual usage of over 100,000 cubic metres of timber with no or limited evidence of sustainable timber sourcing standards; which has not addressed allegations of involvement in the extraction, processing, use or retail of uncertified high risk timber species in the last three years;
  • has not addressed allegations of involvement in the extraction, processing, use or retail of timber from High Conservation Value Forests in the last three years; which has not addressed allegations of involvement in the extraction, processing, use or retail of illegally logged timber in the last three years.


Water pollution
A company:

  • which has breached a discharge consent for a Red List substance during the last three years;
  • have exceeded their discharge consents more than ten times in the last year


Investment trusts
All Investment Trusts that form part of the FTSE 350 are also excluded as their investment objectives may include companies that fail to meet our criteria.

FTSE 350 Index
The maximum holding allowed of any one share is 10% of the value of the fund. Where any company makes up more than 10% of the filtered FTSE 350 Index, the accuracy of the tracking of the Index will be affected.

Resources, Affiliations & Corporate Strategies

The majority of research is carried out in-house. We receive research from external sources, including from major investment bank index research teams. The fund uses the support of EIRIS, a specialist ethical research company, to establish benchmarking methodology for screening companies.

Research is an integral part of our portfolio management process and is performed on an ongoing basis to capture all elements that could affect the risk profile of benchmark indices. It is, therefore, most effective if it is carried out by the same professionals who are involved in managing portfolios as they have a thorough knowledge of index products and market conditions.

Day-to-day portfolio management involves monitoring of the portfolio against the benchmark index, management of cash flow (including accruals) and implementation of changes to the index are carried out by the Index Funds team. The team operates in a collegiate manner sharing responsibility for all portfolios managed. As at June 2015 LGIM’s Index Funds team consists of 30 investment professionals with an average industry experience of 14 years.

The fund is assigned a lead fund manager and a secondary fund manager who are both accountable for the performance of the fund. The strategy for the implementation of major index changes is discussed and approved by senior directors within the Index Funds team. 

Zurich Henderson Global Care Growth ZP Sustainability Themed Pension Global Equity 17/11/2003 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Henderson Global Care Growth" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Standard Life SLI Ethical Corporate Bond S1 Negative Ethical Life Not Set Fixed Interest 11/03/2013 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Pru Ethical Pn S3 Ethically Balanced Pension UK Equity 05/04/2001
Aviva Investors Responsible Ownership Corporate Activity Not Set Unclassified 01/01/1970 More Info (click to view)

SRI / Ethical Overview

Aviva engage on all equity and mixed assets in all geographic regions.

SRI Policies (Primary strategy in bold)

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SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

B&CE The People's Pension Fund 0.5Pn Unclassified Pension Global Equity 01/01/1970
Standard Life L&G Ethical Global Equity Index Pn S2 Sustainability Themed Pension Global Equity 18/02/2011 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "L&G Ethical" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

FTSE4Good global equity index tracker

Resources, Affiliations & Corporate Strategies

SLFC (Citibank) Green Pn Cap Ethically Balanced Pension Global Equity 31/10/1997
Royal London Ethical Bond A Ret Negative Ethical OEIC/Unit Trust UK Equity 31/01/2007 More Info (click to view)

SRI / Ethical Overview

The Fund invests predominantly in investment grade UK corporate bonds which meet predefined ethical criteria. The policy of the Fund considers all of the following ethical issues: alcohol, armaments, gambling, pornography, tobacco, human rights, animal testing and the environment.

 

SRI / themed / ethical assets under management – overview

 

  • Fund Size (GBP):   £440.70m as of 31 May 2017.
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:    £11,793.22m as of 31 May 2017.
  • Total value of assets covered by responsible ownership policy:   £1,416.04m as of 31 May 2017       (Please note that this figure only includes our sustainable range, however, RLAM’s Responsible Investment Policy will detail how this is an over-arching approach across most of the firm’s assets).
  • Total assets under management:   £104,507.32m as of 31 May 2017.

 

SRI Policies (Primary strategy in bold)

  • Animal testing exclusion policy Find ethical investment options that avoid companies that are involved in testing their products on animals. Ethical fund strategies vary - some exclude all companies that test on animals, others allow companies that test for medical purposes or where required by law. Read fund details for fund specific information.
  • Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
  • Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
  • Limits exposure to carbon intensive industries Find environmental, sustainable investment, ethical fund and other options that aim to significantly reduce or limit exposure to carbon intensive industries (ie sectors which are major contributors to climate change). Funds vary - strategies may involve excluding sectors such as coal, oil & gas, mining or airlines - or may indicate a 'best in sector' approach is taken. See fund literature for details.
  • Coal, oil &/or gas majors excluded Find sustainable investment and ethical fund options that avoid significant involvement in coal, oil and/or gas producing companies. Funds vary. See individual fund literature to confirm details.
  • Climate change / GHG policy Find sustainable investment and ethical fund options that pay significant attention to climate change related issues such as greenhouse gas/carbon emissions. Strategies vary, see fund literature for individual fund information.
  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
  • Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

  • RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
  • 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.
  • Favours cleaner, greener companies Find funds that aim to nvest in companies with strong environmental policies and practices. This may mean it invests in smaller companies offering market leading environmental services or products and/or larger companies that are working towards the improved management of their negative impacts. Read fund literature for further information.
  • Available via an ISA Find funds that are available via a tax efficient ISA product wrapper

Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • UK Stewardship Code signatory 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 as responsible 'company owners'.
  • Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
  • Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

Our ethical investment process begins with screening for eligible investments, which is conducted by specialist independent consultancy EIRiS (Ethical Investment Research Services). With over 25 years’ experience, EIRiS is a leading provider of research into the environmental, social and governance (ESG) and ethical performance of companies. RLAM’s ethical framework combines the avoidance of companies involved in excluded activities with the identification of best of breed companies in permitted sectors.

Companies that generate over 10% of their turnover from any one or a combination of the following five categories are excluded:

Alcohol                               Brewing, distilling or selling alcoholic drinks

Armaments                      Manufacturing armaments or nuclear weapons, or associated strategic products

Gambling                          Operating betting shops, casinos or amusement arcades

Tobacco                            Growing, processing or selling tobacco products

Pornography                    Providing adult entertainment services

 

 

 

 

If a company generates more than 10% from any of one the excluded sectors (or 10% of any of the sectors combined), then it is likely that that company’s involvement in that excluded sector is a noteworthy part of their business and strategy.

 

Also, this threshold is deemed to be realistic and appropriate in terms of assessing a company, given that it may not be possible to always pinpoint the exact turnover derived from an excluded activity. This threshold ensures that a minimum of 90% of each holding meets the ethical criteria.

 

The screening process also identifies companies that have the opportunity to make a positive impact. Companies with inappropriate or inadequate policies or systems in the following areas are also excluded:

 

Environment                    Companies with a high environmental impact and no evidence of appropriate environmental management systems

Human rights                   Companies in strategic sectors operating in countries of concern with no evidence of policies or systems to manage human rights risks

Animal testing                 The Fund excludes companies that test cosmetics on animals or provide animal testing services. Our Ethical Bond Fund additionally excludes companies that test household products, other products (excluding medicines) and their ingredients on animals.

Resources, Affiliations & Corporate Strategies

As previously outlined, our ethical investment process screening is conducted by specialist independent consultancy EIRiS (Ethical Investment Research Services). With over 25 years’ experience, EIRiS is a leading provider of research into the environmental, social and governance (ESG) and ethical performance of companies.

 

When researching a bond we typically use the following sources of corporate information:

 

  • Audited and unaudited financial accounts
  • Ratings reports/analysis
  • Company meetings/presentations
  • Third party equity/credit research
  • Specific investor reports
  • Barclays Live – key tool for relative value assessment
  • Regulatory News Service – ‘Investigate’
  • The Credit team employs a range of models, both external and bespoke.

 

The Credit team also uses a number of external providers of information for ongoing surveillance. Principally these are:

 

  • Bloomberg, which is used for bond analytics and descriptive data, including bond documentation and access to equity research reports.
  • S&P, through their ‘Ratings Direct’ and ‘Capital IQ’ services. Ratings Direct provides up to date access to bond rating reports and research and other company and sector financial data across the rated bond universe and Capital IQ provides access to reported financial information of thousands of listed and unlisted companies. Usefully, we are able to embed the financial data provided by Capital IQ into bespoke financial models that provide inputs that are relevant to RLAM’s evaluation of credit. This represents very time effective and high quality provision of credit ratios to enhance the decision making process in higher profile areas of the corporate bond market.
  • Barclay’s Live database to help assess relative value across issuers and sectors and the production of issuer credit curves.

 

This external data is used to supplement RLAM’s research effort and, in particular, enables our Analysts to focus their primary analysis and financial modelling on lower profile corporate bonds that we consider to be less extensively researched by the wider market. Maintenance of research does not follow a prescriptive formula but will typically tend to follow the reporting timetable of our bond issuers (e.g. RMBS/covered bonds – monthly; CMBS – quarterly; corporates – semi-annual) supplemented by the team’s ongoing focus on market developments and the formal alerts outlined above. Whilst we believe a flexible and interactive approach is optimal and practical given our team size, RLAM has a large database of relevant and targeted credit information that can be accessed by all members of the team effectively.

 

RLAM is well served by the sell-side community, particularly in the secured space, as our counterparties know the level of embedded knowledge across the team, both in terms of stocks and underlying client requirements, and the likelihood of receiving a prompt evaluation of any proposal.

 

It is worth re-emphasising that, whether primary inputs have been internally derived or otherwise, we will never delegate the final decision as to whether a bond is selected in our portfolios, given our very different philosophical approach to valuation. In addition, as previously discussed, our team structure and overlap between the research and Fund manager functions ensures that the stock selection process outlined above is not undertaken by any individuals operating in isolation from the rest of the team. By contrast, this process benefits from continuous and ongoing interaction between the whole team, allowing all members of the team, with different and complementary skills and experience, to contribute to investment decisions.

 

RLAM Voting Policy:  

 

Phoenix Wealth Kames Ethical Equity Pn S4 Negative Ethical Pension UK Equity 30/12/2009 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Equity" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Newton SRI for Charities Unclassified OEIC/Unit Trust Global Mixed Asset 16/05/2010
Blackrock LGIM Ethical Global Equity Index P Sustainability Themed Life Global Equity 29/03/2010
OMW EdenTree Amity European Pn Ethically Balanced Pension Europe Ex-UK Equity 16/10/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "EdenTree Amity European" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva L&G Ethical UK Equity Index Pn Sustainability Themed Pension UK Equity 31/05/2011 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "L&G Ethical" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Foresight Solar VCT PLC Ord 1P Environmentally Themed Investment Trust UK Equity 02/11/2010
Aberdeen Responsible UK Equities Ret Acc Ethically Balanced OEIC/Unit Trust UK Equity 08/05/2006
Aviva MyM Liontrust Sustainable Future UK Growth Pn Sustainability Themed Pension UK Equity 27/04/2017 More Info (click to view)

SRI / Ethical Overview

Underlying Fund - Liontrust Sustainable Future UK Growth, managed by Peter Michaelis. See entry for further information

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

L&G Ethical Global Equity Index Pn Sustainability Themed Pension Global Equity 10/05/2010
Abundance Generation (Debentures) Environmentally Themed Other Not Set Unclassified 19/04/2012
Aegon Ethical (RR) Pn Negative Ethical Pension UK Equity 28/09/2014
Metlife Aegon Ethical Equity Pn Negative Ethical Pension UK Equity 04/02/2009
Kames Ethical Equity A Negative Ethical OEIC/Unit Trust UK Equity 27/04/1989 More Info (click to view)

SRI / Ethical Overview

We launched our first ethical equity fund in 1989. Since then, we have broadened our ethical capabilities to include ethical corporate bond and cautious managed funds. Today we are distinctive among fund providers in offering such a broad suite of ethical products. Some of the characteristics of our ethical proposition are:

  • We are committed to ethical investing
  • Ethical companies make good investments.
  • ‘Dark green’ funds operate strict ethical principles.
  • Our ethical funds are rated by Morningstar OBSR.
  • A 2014 survey named Kames Capital as one of only three ethical investment providers to be used by over 70% of financial advisers which are members of the Ethical Investment Association. 

 

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP): £603.00 million as at 31/05/2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management: £1,748.84 million as at 31/05/2017
  • Total assets under management: £45,335 million as at 31/03/2017

 

 

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
  • Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

  • RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
  • 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.
  • Strictly screened ethical fund Find funds that have a high level of negative ethical avoidance. These funds are likely to exclude more companies than other ethical (and SRI) fund options. Read fund literature for further information.

Corporate Activity

  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

All three of Kames Capital’s ethical funds apply the same ‘negative’ screen. This means that we screen companies out of the potential investment universe based on certain unacceptable activities. Because we apply stringent screening criteria, our funds are considered ‘dark green’. We do not screen out whole sectors, but some may largely be excluded because of the nature of their business activities.

Our screening criteria are clear and explicit. Certain ethical issues, however, are not black or white. Our 20 years’ experience of managing ethical investments means we can consider these issues appropriately when they arise.

We do not apply ‘positive screening’ criteria like some other funds. The funds may invest in themes that could be considered ‘socially responsible’, like alternative energy or social housing companies, but only if these companies pass our negative screens.

We aim for transparency in our screening process. This means it is easy for clients to understand the types of companies we exclude. Our underlying philosophy is to avoid companies that cause significant negative effects in society or the environment. 

We use both external screening databases and in-house research to ensure companies meet our ethical criteria and are suitable for investment. Our Corporate Governance team focuses on the screening and research, freeing our fund managers to focus solely on stock selection and portfolio construction.

Our ‘dark green’ screen is ideally suited to investors looking for a more stringent ethical philosophy. It adopts a negative approach that screens companies out of our funds’ potential investment universe if they engage in certain unacceptable activities. Examples of our screening process are shown below:

  • Animal Welfare
  • Military
  • Nuclear power
  • Environment
  • Political Donations
  • Genetic Engineering
  • Gambling
  • Alcohol
  • Tobacco
  • Pornography
  • Banks
  • Oppressive Regimes

Kames Capital aims to be a responsible investor. We ensure that we identify and understand the key environmental, social and governance (ESG) risks for each of the companies, industries and sectors that we invest in. We do this because evidence suggests that companies who rank among the leaders in governance and sustainability tend to outperform as investments over the long term.

Our approach to responsible investment is consistent with the UK Stewardship Code. The Code sets out good practice Principles on engagement with investee companies which UK-based institutional investors should aspire to. You can download our compliance statement from our website.

We are also a signatory to the United Nations Principles for Responsible Investment (UN PRI). The UN PRI is the principal international investor initiative to drive the integration of environmental, social and governance issues into investment decision making. The initiative places a formal requirement on signatories to be active, responsible shareholders and report annually on activities and progress in a transparent manner.

 

Resources, Affiliations & Corporate Strategies

Our corporate governance team is responsible for the analysis of relevant environmental, social and governance (ESG) issues. They are responsible for identifying the key ESG risks for each of the companies, industries and sectors that we invest in and in turn providing our fund managers with succinct, relevant data that could have investment consequences. Our corporate governance team is linked to equivalent individuals in other Aegon Asset Management country offices.

We use a range of data sources for ESG research purposes and these resources have increased significantly in the last few years as the quality of the data available has improved.  Resources currently include:

  • MSCI ESG Manager – company ESG research platform
  • EIRIS Portfolio Manager – company ESG research platform
  • ASSET4 assetmasterProfessional –  company ESG research platform
  • RiskMetrics ProxyExchange – proxy voting research and processing
  • The Association of British Insurers (ABI) IVIS proxy voting research service 
  • BoardEx - corporate board and remuneration database
  • Specialist databases, such as UN Principles for Responsible Investment (UNPRI), Carbon Disclosure Project (CDP) and Extractives Industry Transparency Directive (EITI)
  • Specialist research from brokers and academics
  • Various specialist journal subscriptions

A strong relationship exists between our corporate governance team and our fund managers, which enables material non-financial information to be incorporated into our investment processes. ESG research reports produced by our corporate governance team sit alongside all the other existing investment research undertaken by our fund managers on a given security. The corporate governance team also provide relevant news-flow and commentary on ESG issues to our fund managers that they might not receive from other sources.  

Our fund managers consider ESG research alongside other relevant financial and non-financial factors in the investment decision-making process. The importance that the fund manager attaches to ESG issues is in proportion to their ability to influence security prices.

 

Phoenix Wealth AXA IM Ethical Distribution Ethically Balanced Life UK Mixed Asset 29/09/2010
Threadneedle Ethical UK Equity Sustainability Themed OEIC/Unit Trust UK Equity 30/10/2015 More Info (click to view)

SRI / Ethical Overview

Launched in October 2015, our Threadneedle Ethical UK Equity Fund takes a novel approach in combining ESG performance, an outcomes focus and negative screening. The Fund actively targets UK companies that exhibit the best ESG performance and/or produce innovative products positioned to contribute to a better future, and avoids companies that we deem to be involved in unethical or controversial activities. In November, it was awarded Best New Entrant, at Investment Week’s Sustainable Investment Awards 2016.

 

The differentiated aspect of the Fund is its three-pronged approach, combining ESG performance, an outcomes focus and negative screening.

 

I.             First, we exclude companies that are unable to satisfy our ethical restrictions, using the MSCI UK IMI Extended SRI index to aid exclusion of sectors e.g. alcohol, weapons, gambling.

 

II.            We consider ESG performance, using both internal and external research, as we believe that those companies with excellent corporate governance can enhance their potential into the future. We also seek to engage with the companies to ensure continual improvement.

 

III.           We seek companies that deliver innovative solutions to achieving sustainable outcomes. To achieve this, we look at the UN sustainable development goals and key themes, including climate change, healthcare, safety, security and verification.

 

 

SRI / themed / ethical assets under management – overview

 

As at 31 March 2017

 

  • Fund Size (GBP):   £24.0m
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:   £288.8m
  • Total value of assets covered by responsible ownership policy:   £9,223m*
  • Total assets under management:   £108,367m**

 

*range of styles, including: best in class, UN Global Compact, ESG screen, thematic, impact etc.

** Columbia Threadneedle Investments, EMEA & Asia only

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.
  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
  • Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.
  • 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.
  • Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
  • Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
  • Health & wellbeing policies Find ethical or sustainable investment fund options that have a policy which supports (ie aims to invest in) companies that are viewed as offering positive lifestyle, health or wellbeing related benefits.
  • Nuclear exclusion policy Find ethical funds (and other options) that have a published policy that sets out the fund's position on avoiding or limiting exposure to nuclear power. See fund literature for details of their policy.
  • Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.
  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
  • Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • Balances company 'pros and cons'/best in sector Find ethical funds and other options that consider both the 'positive' things companies do and the 'negative' things they do in order to make balanced, often complex decisions about where they might invest. Such funds often invest in the best/most ethical companies across most industries ('best in sector'), rather than excluding entire sectors. The fund manager may combine this with 'responsible engagement' activity to encourage better business practices. See fund literature for specific policy explanations.
  • Favours companies with strong social policies Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
  • Sustainability themed Find funds where there is a significant emphasis on sustainability issues either as its primary strategy or as a core strategy that compliments other criteria. (This may apply to a number of different SRI Styles). Such funds will consider environmental and social issues when making stock selection decisions. Read fund literature for further information.
  • Norms focus 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.
  • Positive selection bias Find funds where their main 'ethical approach' is to invest in companies that are considered to be positive/good or useful to people and/or the environment. The fund may also have negative avoidance criteria - see fund details to read more about fund strategies.
  • 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.
  • Over 50% large cap 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.
  • Favours cleaner, greener companies Find funds that aim to nvest in companies with strong environmental policies and practices. This may mean it invests in smaller companies offering market leading environmental services or products and/or larger companies that are working towards the improved management of their negative impacts. Read fund literature for further information.
  • Strictly screened ethical fund Find funds that have a high level of negative ethical avoidance. These funds are likely to exclude more companies than other ethical (and SRI) fund options. Read fund literature for further information.
  • Aims to generate positive impacts Find funds that aim to help deliver positive social or environmental impacts or outcomes through their investment decisions - which typically involves holding companies that are viewed as being necessary or beneficial. Strategies and approaches vary. A small number of funds have recently started to measure outcomes (see 'Measures Impacts' in the Policy filter). This is a new area - so most funds do not do this yet. See fund literature for further information.
  • Available via an ISA Find funds that are available via a tax efficient ISA product wrapper
  • Clean energy themed Find funds that in clean technology / clean energy companies. See fund information for further details.

Corporate Activity

  • ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
  • Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that 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 fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
  • UK Stewardship Code signatory 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 as responsible 'company owners'.
  • Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
  • Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
  • Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
  • Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

The Fund targets UK companies that exhibit the best, or improving, ESG performance in the way they operate that fit within our tried and tested UK Equity process. However, investing responsibly is also about opportunity; the opportunity to combine financial objectives with a positive focus on investing with purpose.

 

This positive focus is about more than just internal standards; the Fund also actively seeks to target companies that deliver products or services that are positioned to contribute to a better future. In our view, this ESG-integrated and outcome-focused approach sets this Fund apart from the more traditional ethical fund approach, offering a ‘best in class’ solution for those looking to invest responsibly and with purpose.

 

The Fund invests at least three-quarters of its assets in shares of companies in the United Kingdom (or companies that have significant operations there) that meet its ethical investment criteria. Investments are assessed by the fund manager by reference to ethical investment guidelines additional to those usually considered by the fund manager when making investment decisions.

 

There are two ways in which UK companies are evaluated to create the ethical investment universe to which the Fund Manager will apply his investment process: ethical exclusion screening and positive inclusion and selection.

 

1.      Ethical exclusion screening

 

For the Fund to invest in a company, it must satisfy the Fund’s ethical restrictions. Stocks are excluded from the Fund’s investable universe if they do not exhibit appropriate Environmental, Social or Governance (ESG) behaviour, for example if a certain amount of the company’s business activities are involved in industries such as alcohol, gambling, tobacco. These ethical restrictions are derived from the methodology of the MSCI Socially Responsible Investment (SRI) Index, the Fund’s Reference Index, but may vary slightly in some instances.

 

2. Positive inclusion & selection

 

As well screening out companies that do not perform well against ESG criteria, the Fund actively seeks to include UK companies that exhibit strong ESG performance in the way they operate. Companies that pass the ethical exclusion screening are further assessed and selected on the extent of their ESG performance relative to other companies within their sector, drawing on the team’s strong capabilities and experience with ESG analysis. The Fund also selects companies that deliver or are developing products, services and practices that are positioned to contribute to a better future, i.e. that fit in with key sustainability themes.

 

These comprise: health and wellbeing, climate and energy transition, demographics, communities, education, environment, safety and security.

 

Companies which embrace the efficient use of resources and invest in both people and technology to generate sustainable returns over time create the context in which investors can do well by doing good.

 

Embracing this creates a productive investment focus in which we apply our research process to find suitable investments with the appropriate investment characteristics. As bottom-up stock pickers, the fund management team look for companies with robust business and financial models that trade on attractive valuations and have solid management teams that look to the future. We seek to invest in and support companies over a long-term horizon, which ties in with our UK equity team investment philosophy, while also supporting an ethical approach to investing.

Resources, Affiliations & Corporate Strategies

Resources

 

We have a dedicated Responsible Investment (RI) team devoted to researching and engaging on ESG issues and have invested significant resources in the development of our expertise in this area. This includes not only internal research but the use of supplementary external research and ratings as required. Our RI team has worked alongside our investment professionals since 1998. 

 

The RI team is composed of six members in the UK with responsibility for ESG research, integration, engagement, proxy voting and ESG reporting and, in one case RI portfolio management, which is a new position last year. A Director, Global Responsible Investment (US) is located in the US, as is a proxy voting team. Responsibility for the governance and responsible investment capabilities lies with Iain Richards, the Head of Governance and Responsible Investment at Columbia Threadneedle Investments.

 

Sources of Information to the RI team include:

 

  • Company data and dialogue including traditional and sustainability reporting
  • Brokers focused on ESG research
  • External ESG rating provider: MSCI ESG research
  • Corporate governance database: BoardEx
  • Proxy voting related governance research: ISS and IVIS
  • Bloomberg
  • NGOs
  • Academia
  • News
  • National and International government bodies

 

The RI team undertake the research which drives the fund, in particular where stocks are not covered by MSCI ESG research, or where there is more work to be done in identifying the salience of sustainable opportunities. Examples include smaller companies providing cyber security opportunities, or innovating in renewable energy production. The team produce bespoke ESG review, incorporating exposure to sustainability themes, where these are identified. The RI team also typically conduct or assist engagement to gain further insight and drive improvement on ESG and sustainability issues. Finally, the team make voting recommendations regarding the companies in the Fund, which can be informed by ESG issues – diversity for instance is now systemically considered as a standing voting consideration with potential to trigger action across all companies and funds. 

 

In addition, the financial analysis is undertaken by our UK equities team, using their established investment process to identified companies with robust business and financial models that trade on attractive valuations and have solid leadership.

 

Fund manager

 

The fund is managed by Matt Evans, who co-managers the Threadneedle UK Smaller Companies Fund, the Threadneedle UK Mid 250 Fund and a range of small cap institutional portfolios. Supported by the RI team, and the UK team, and mindful of the exclusionary criteria, the manager makes the final investment decision.

 

General corporate affiliations

 

Given the number of potential initiatives, we seek to prioritise, focusing on those which best align with our priorities and add greatest value to our processes. Some of the key associations and organisations are outlined below.

 

We were a founding member of the UN PRI and remain actively involved in the organisation, whose influence has increased since its foundation in 2006: in our last assessment from the PRI we received an A+ (the highest rating) for our overall approach to responsible investment.

 

Other key memberships are those of: the United Kingdom Sustainable Investments and Finance Association (UKSIF), the European Social Investment Forum (EUROSIF), and the Asian Corporate Governance Association (ACGA).  These memberships reflect our commitment to RI across a range of markets, reflecting the geographic diversity of our investments, as well our significant holdings in UK-listed companies. 

 

We have a longstanding relationship with UKSIF in particular.  We are represented on the UKSIF Leadership committee, and this year we participated at UKSIF events, including an event on the strategy of the SIF, at which we contributed ideas for increased member engagement and participation. We also contributed to their 2016 survey, enhancing their research into the nature of the responsible investment market.

 

Our Chief Investment Officer is also on the board of the Investor Forum, which seeks to contribute to long-term investment performance by promoting cultural change and enhancing shareholder stewardship in the UK. Similarly, we are also an active member of the UK Corporate Governance Forum, an investor network made up of asset managers and owners to discuss individual companies, industry and ESG developments, and are signatories to the UK Stewardship Code

 

We are also signatories to the CDP (formerly the Carbon Disclosure Project), including their recent forestry and water programmes.

SLFC (Citibank) Green 1 Environmentally Themed Life Global Equity 29/06/1992
OMW Jupiter Ecology Environmentally Themed Life Global Equity 23/02/2007
Epworth Affirmative Equity Faith Based OEIC/Unit Trust UK Equity 30/08/2001
Syncona Ltd Social Themed Investment Trust Global Hedge 25/10/2012 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Health & wellbeing policies Find ethical or sustainable investment fund options that have a policy which supports (ie aims to invest in) companies that are viewed as offering positive lifestyle, health or wellbeing related benefits.

SRI Features

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Corporate Activity

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Family Charities Ethical Exempt S1 Sustainability Themed Life UK Equity 30/06/1996
OMW EdenTree Amity UK Pn Ethically Balanced Pension UK Equity 16/10/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "EdenTree Amity UK" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing. 

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Mym Legal & General (PMC) Ethical GLobal Equity Index Pn Sustainability Themed Pension Global Equity 02/05/2016
WAY Green Portfolio Way Ret Inc Environmentally Themed OEIC/Unit Trust Global Equity 01/02/2010
Aviva Stewardship Pn Acc Ethically Balanced Pension UK Equity 31/05/1984 More Info (click to view)

SRI / Ethical Overview

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Aviva Kames Ethical Corporate Bond Pn S6 Negative Ethical Pension Global Fixed Interest 28/09/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Kames Ethical Corporate Bond" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Phoenix Wealth Kames Ethical Corporate Bond Negative Ethical Life UK Fixed Interest 05/05/2008
7IM Sustainable Balance C Acc Sustainability Themed OEIC/Unit Trust Global Mixed Asset 02/02/2007 More Info (click to view)

SRI / Ethical Overview

The Equity and Fixed Interest components of the fund are managed by Sarasin LLP, leaders in the field of researching sustainable investments. 7IM manage the investment overlay which includes exchange traded funds as well as carefully chosen funds which are within the ethical and sustainable criteria.

While there are some ethical exclusions (nuclear, armaments, pornography, GMOs, etc,) the choices of investments are made mainly on positive social and environmental factors.  The equity and bond choices are based on their positioning, in terms of social analysis and environmental matters, compared with their peers both in quantitative or qualitative terms as judged by Sarasin using their proprietary Sarasin Sustainability Matrix®.  The ETFs and funds chosen by 7IM must also comply with the Sarasin principles as well as the ethical exclusions and are generally thematic plays on sustainable themes as well as alternative investments in areas such as sustainable forestry.

The social factors judged to be important in positioning on the matrix include having a good relationship with suppliers, capital providers, the general public, its employees, clients and competitors based on criteria of health, participation, distribution of wealth, knowledge and controversial activities.

The environmental aspects include such things as environmental strategy, policy and management systems, pre-production sourcing, production processes, products and services.

 

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP): £75m
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management:  £75m
  • Total value of assets covered by responsible ownership policy: £75m
  • Total assets under management: £11bn

 

SRI Policies (Primary strategy in bold)

  • Environmental policy Find investment funds with environmental policies - ie that consider issues such as pollution, climate change, resource management, environmental impact. This will include options from all of the different SRI Styles, including funds where their core strategy is to focus on other areas such as ethical funds. See fund information for fund specific policy details.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.
  • Sustainability policy Find fund options that consider issues relating to the sustainability agenda (e.g. resource management, environmental impact, climate change and/or social issues such as equal opportunities, human rights and adherence to recognised codes). This will include funds from all of the different SRI Styles. See fund information for explanations of the different strategies.
  • Social policy Find fund options that consider social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). This will include funds in most of the different SRI Styles as this is considered a core issue. See fund information for detail.
  • 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.
  • Tobacco production avoided Find fund options that exclude manufacturers of tobacco (or related) products. This typically relates to ethical funds however funds from other SRI Styles commonly avoid this area also. Strategies vary and funds may invest in retailers of such products (e.g. supermarkets or hotels.) See fund information for further information.
  • Armaments manufacturers avoided Find ethical fund (and other SRI) options that avoid avoids companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non strategic military products. Read fund literature for specific details.
  • Limits exposure to carbon intensive industries Find environmental, sustainable investment, ethical fund and other options that aim to significantly reduce or limit exposure to carbon intensive industries (ie sectors which are major contributors to climate change). Funds vary - strategies may involve excluding sectors such as coal, oil & gas, mining or airlines - or may indicate a 'best in sector' approach is taken. See fund literature for details.
  • Nuclear exclusion policy Find ethical funds (and other options) that have a published policy that sets out the fund's position on avoiding or limiting exposure to nuclear power. See fund literature for details of their policy.
  • Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.
  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
  • Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.

SRI Features

  • Positive selection bias Find funds where their main 'ethical approach' is to invest in companies that are considered to be positive/good or useful to people and/or the environment. The fund may also have negative avoidance criteria - see fund details to read more about fund strategies.
  • 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.
  • Balances company 'pros and cons'/best in sector Find ethical funds and other options that consider both the 'positive' things companies do and the 'negative' things they do in order to make balanced, often complex decisions about where they might invest. Such funds often invest in the best/most ethical companies across most industries ('best in sector'), rather than excluding entire sectors. The fund manager may combine this with 'responsible engagement' activity to encourage better business practices. See fund literature for specific policy explanations.
  • Sustainability themed Find funds where there is a significant emphasis on sustainability issues either as its primary strategy or as a core strategy that compliments other criteria. (This may apply to a number of different SRI Styles). Such funds will consider environmental and social issues when making stock selection decisions. Read fund literature for further information.
  • Favours cleaner, greener companies Find funds that aim to nvest in companies with strong environmental policies and practices. This may mean it invests in smaller companies offering market leading environmental services or products and/or larger companies that are working towards the improved management of their negative impacts. Read fund literature for further information.
  • Favours companies with strong social policies Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
  • Strictly screened ethical fund Find funds that have a high level of negative ethical avoidance. These funds are likely to exclude more companies than other ethical (and SRI) fund options. Read fund literature for further information.
  • Aims to generate positive impacts Find funds that aim to help deliver positive social or environmental impacts or outcomes through their investment decisions - which typically involves holding companies that are viewed as being necessary or beneficial. Strategies and approaches vary. A small number of funds have recently started to measure outcomes (see 'Measures Impacts' in the Policy filter). This is a new area - so most funds do not do this yet. See fund literature for further information.
  • Available via an ISA Find funds that are available via a tax efficient ISA product wrapper

Corporate Activity

  • Vote all shares at AGMs/EGMs This fund manager always votes the shares they own at annual general meetings (and extraordinary general meetings). This is a key indicator of 'responsible share ownership' and companies taking an interest in the future of the companies they part own.
  • In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
  • UK Stewardship Code signatory 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 as responsible 'company owners'.
  • Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
  • Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.

SRI / Ethical Policy

The fund will only invest in individual securities where the underlying companies, countries and institutions score well on social and environmental criteria.

Certain products and manufacturing processes are so high-risk that they are not rated as being compatible with the criteria. Companies from certain industries or with significant exposure to certain activities are precluded, such as: Tobacco industry, Armaments, Pornography, Nuclear power generation or Chlorine, agrochemicals and GMOs in agriculture. Alcohol and Gambling will shortly be added as exclusions in the new Prospectus.

The fund may also invest in collective investment vehicles (including exchange traded funds and open or closed ended funds) that track recognised ethical or socially responsible indices or are managed with appropriate ethical, social or environmental criteria.

 

Resources, Affiliations & Corporate Strategies

In-house research: macro and economic analysis based on a wide range of research material divided between broker research (too many to list here but the main ones such as Citi and Goldman Sachs as well as smaller brokers such as Numis and Winterflood) and external research (ASR, BCA, Capital Economics, Gavekal, MRB) and on conclusions of quarterly asset allocation committee meetings which are attended by representatives from independent research houses and independent contributors from the fund management industry.

7IM outsources the individual equity selection and the individual bond selection to Sarasin who have strong ethical, ESG and SRI research capabilities with a large team of analysts who are able to assess company and country SRI criteria.

7IM controls the overall asset allocation of the fund both strategic, keeping it within IA sector guidelines (Mixed Investment 20-60% Shares), within a balanced risk profile as defined by 7IM.

 

Aviva Liontrust Sustainable Future Cautious Managed Pn S6 Sustainability Themed Pension Global Mixed Asset 17/11/2014
Aviva Royal London Select Portfolio (40-85% Shares) Sustainability Themed Life Europe >50% UK Mixed Asset 05/04/2006
Aviva Jupiter Ecology XP 2 Environmentally Themed Pension Global Equity 02/01/2008 More Info (click to view)

SRI / Ethical Overview

This pension product is linked to the "Jupiter Ecology" fund. More detailed information on its SRI / Ethical approach can be found under that fund in the "OEIC" Product listing.

SRI Policies (Primary strategy in bold)

  • Invests in clean energy/renewables Find ethical, sustainable investment and other environmentally aware fund options that aim to invest in companies in the clean technology and renewable energy sectors. Fund strategies vary. Some funds may have limited exposure to this area, others may have significant exposure. Check fund literature for details.

SRI Features

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Corporate Activity

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Links

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SRI / Ethical Policy

Resources, Affiliations & Corporate Strategies

Kames Ethical Corporate Bond A Acc Negative Ethical OEIC/Unit Trust UK Fixed Interest 27/04/2000 More Info (click to view)

SRI / Ethical Overview

We launched our first ethical equity fund in 1989. Since then, we have broadened our ethical capabilities to include ethical corporate bond and cautious managed funds. Today we are distinctive among fund providers in offering such a broad suite of ethical products. Some of the characteristics of our ethical proposition are:

  • We are committed to ethical investing
  • Ethical companies make good investments.
  • ‘Dark green’ funds operate strict ethical principles.
  • Our ethical funds are rated by Morningstar OBSR.
  • A 2014 survey named Kames Capital as one of only three ethical investment providers to be used by over 70% of financial advisers which are members of the Ethical Investment Association. 

 

SRI / themed / ethical assets under management – overview

  • Fund Size (GBP): £493.47 million as at 31/05/2017
  • Total value of SRI/ethical/environmental/ social/ environmental or sustainability themed funds under management: £1,748.84 million as at 31/05/2017
  • Total assets under management: £45,335 million as at 31/03/2017

 

SRI Policies (Primary strategy in bold)

  • Alcohol production excluded (new) This filter helps you to find ethical funds - and other options - that avoid investment in alcohol production. See fund literature for further information.
  • Gambling avoidance policy Find ethical fund options (and other options) that avoid companies with significant involvement in the gambling industry. See fund policy for details.
  • Pornography avoidance policy Find ethical fund option - and in some cases other options - that avoid companies that derive significant income from pornography. See fund details for further information.
  • Ethical policies Find funds with 'traditional' ethical investment policies. These typically focus on avoiding companies that are involved in the armaments industry, tobacco, gambling and/or pornography. Options will include funds where their core strategy or style may be to focus other issues - like sustainability or the environment, not just 'ethical funds'. Strategies vary significantly. Check fund literature for details.

SRI Features

  • RSMR Rated Find funds that are rated by research agency 'Rayner Spencer Mills Research' (awarded 'RSMR SRI Rated' status). Read fund literature on contact RSMR for further information.
  • 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.
  • Strictly screened ethical fund Find funds that have a high level of negative ethical avoidance. These funds are likely to exclude more companies than other ethical (and SRI) fund options. Read fund literature for further information.

Corporate Activity

  • PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.

SRI / Ethical Policy

All three of Kames Capital’s ethical funds apply the same ‘negative’ screen. This means that we screen companies out of the potential investment universe based on certain unacceptable activities. Because we apply stringent screening criteria, our funds are considered ‘dark green’. We do not screen out whole sectors, but some may largely be excluded because of the nature of their business activities.

Our screening criteria are clear and explicit. Certain ethical issues, however, are not black or white. Our 20 years’ experience of managing ethical investments means we can consider these issues appropriately when they arise.

We do not apply ‘positive screening’ criteria like some other funds. The funds may invest in themes that could be considered ‘socially responsible’, like alternative energy or social housing companies, but only if these companies pass our negative screens.

We aim for transparency in our screening process. This means it is easy for clients to understand the types of companies we exclude. Our underlying philosophy is to avoid companies that cause significant negative effects in society or the environment. 

We use both external screening databases and in-house research to ensure companies meet our ethical criteria and are suitable for investment. Our Corporate Governance team focuses on the screening and research, freeing our fund managers to focus solely on stock selection and portfolio construction.

Our ‘dark green’ screen is ideally suited to investors looking for a more stringent ethical philosophy. It adopts a negative approach that screens companies out of our funds’ potential investment universe if they engage in certain unacceptable activities. Examples of our screening process are shown below:

  • Animal Welfare
  • Military
  • Nuclear power
  • Environment
  • Political Donations
  • Genetic Engineering
  • Gambling
  • Alcohol
  • Tobacco
  • Pornography
  • Banks
  • Oppressive Regimes

Kames Capital aims to be a responsible investor. We ensure that we identify and understand the key environmental, social and governance (ESG) risks for each of the companies, industries and sectors that we invest in. We do this because evidence suggests that companies who rank among the leaders in governance and sustainability tend to outperform as investments over the long term.

Our approach to responsible investment is consistent with the UK Stewardship Code. The Code sets out good practice Principles on engagement with investee companies which UK-based institutional investors should aspire to. You can download our compliance statement from our website.

We are also a signatory to the United Nations Principles for Responsible Investment (UN PRI). The UN PRI is the principal international investor initiative to drive the integration of environmental, social and governance issues into investment decision making. The initiative places a formal requirement on signatories to be active, responsible shareholders and report annually on activities and progress in a transparent manner.

 

Resources, Affiliations & Corporate Strategies

Our corporate governance team is responsible for the analysis of relevant environmental, social and governance (ESG) issues. They are responsible for identifying the key ESG risks for each of the companies, industries and sectors that we invest in and in turn providing our fund managers with succinct, relevant data that could have investment consequences. Our corporate governance team is linked to equivalent individuals in other Aegon Asset Management country offices.

We use a range of data sources for ESG research purposes and these resources have increased significantly in the last few years as the quality of the data available has improved.  Resources currently include:

  • MSCI ESG Manager – company ESG research platform
  • EIRIS Portfolio Manager – company ESG research platform
  • ASSET4 assetmasterProfessional –  company ESG research platform
  • RiskMetrics ProxyExchange – proxy voting research and processing
  • The Association of British Insurers (ABI) IVIS proxy voting research service 
  • BoardEx - corporate board and remuneration database
  • Specialist databases, such as UN Principles for Responsible Investment (UNPRI), Carbon Disclosure Project (CDP) and Extractives Industry Transparency Directive (EITI)
  • Specialist research from brokers and academics
  • Various specialist journal subscriptions

A strong relationship exists between our corporate governance team and our fund managers, which enables material non-financial information to be incorporated into our investment processes. ESG research reports produced by our corporate governance team sit alongside all the other existing investment research undertaken by our fund managers on a given security. The corporate governance team also provide relevant news-flow and commentary on ESG issues to our fund managers that they might not receive from other sources.  

Our fund managers consider ESG research alongside other relevant financial and non-financial factors in the investment decision-making process. The importance that the fund manager attaches to ESG issues is in proportion to their ability to influence security prices.

 

L&G IM Responsible Ownership Corporate Activity Not Set Unclassified 01/03/2013 More Info (click to view)