Stewart Investors Asia Pacific and Japan All Cap Fund
SRI Style:
Sustainability Tilt
SDR Labelling:
Unlabelled with sustainable characteristics
Product:
OEIC
Fund Region:
Asia Pacific
Fund Asset Type:
Equity
Launch Date:
30/06/1988
Last Amended:
Sep 2024
Dialshifter (
):
Fund Size:
£445.00m
(as at: 30/06/2024)
Total Screened Themed SRI Assets:
£15173.00m
Total Responsible Ownership Assets:
£15173.00m
Total Assets Under Management:
£15173.00m
ISIN:
GB0030184088, GB00B50G1435, GB0030183890, GB00B57XX416
Objectives:
The Fund aims to achieve capital growth over the long-term (at least five years).
Sustainability objective
The sustainable objective of the Fund is to invest in companies which both contribute to, and benefit from, sustainable development, achieving positive social and environmental outcomes. All investee companies contribute to improving human development, while many also contribute to positive environmental outcomes.
Sustainable, Responsible
&/or ESG Overview:
The Fund aims to achieve absolute returns over the long-term by making investments into high-quality companies that contribute to, and benefit from, sustainable development. The team achieves positive social and environmental outcomes by avoiding companies that participate in harmful and controversial practices and investing in, and engaging with, companies that directly or indirectly support positive social and environmental outcomes such as health and wellbeing, financial inclusion, waste, water and energy efficiency and renewable energy. Engagement and voting are used as tools to improve the underlying companies’ approaches to social and environmental issues. The team uses Project Drawdown to map the portfolio to climate change and biodiversity solutions and Human Development Pillars to map to social factors like health and wellbeing, financial inclusion and water and sanitation. All holdings are also mapped to the Sustainable Development Goals.
Primary fund last amended:
Sep 2024
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Find funds which substantially focus on sustainability issues
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance)
Environmental - General
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Funds that are reviewing or encouraging companies to manage down the overuse of plastics (particularly single use, non-recyclable plastics). These funds will typically aim to encourage the use of alternative materials, but are unlikely to exclude companies purely on the basis of their use of plastics. Strategies vary. See fund information for further detail.
Climate Change & Energy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Funds that avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary. See fund information for further information.
Funds that avoid companies that are involved in extracting oil from the Arctic regions. See fund literature for further details.
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
The fund manager excludes companies with indirect involvement in fossil fuel exploration. For example they would be expected to exclude banks and insurance companies that are effectively enabling new coal, oil and or gas reserves to be discovered and in due course extracted through the provision of necessary finance or services.
Find funds that require all, or almost all, of the companies it invests in to have a ‘net zero action plan’ - meaning that the companies they invest in have worked out how they will, over time, reduce their total carbon (and other greenhouse gas) emissions to nil.
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/
Social / Employment
Find funds that have a labour standards policy - which can be expected to mean that the fund will invest in / favour companies that have higher standards in this area - although fund strategies can vary significantly (as with all policy areas). See eg https://www.ilo.org/international-labour-standards
Ethical Values Led Exclusions
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of tobacco products including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Find funds with policies that require specific animal welfare standards to be met. These may reference well-known welfare standards (3Rs - Replace, Reduce, Refine) or certification schemes. Strategies vary. See fund information for further detail.
Human Rights
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Find funds that have policies in place to ensure they do not invest in companies that employ children.
Find funds with policies that exclude companies or other assets where regimes are not democratic, or where people may be oppressed. May use eg. Freedom House research. Strategies vary. See fund literature for further information.
Find funds that have policies or a theme that relates to the responsible management of supply chains. These may relate to employment issues, notably people employed by their suppliers, as well as the sourcing of materials and products. See fund literature for further information.
The fund has a policy which sets out their position on the treatment of indigenous people by investee assets/companies - typically meaning they won't invest in companies with low standards.
The fund has a policy which excludes assets with involvement in Modern Slavery
Gilts & Sovereigns
Find funds that do not invest in / exclude 'sovereigns' - debt issued by governments. See eg https://www.investopedia.com/terms/s/sovereign-debt.asp
Banking & Financials
Find funds that include banks as part of their holdings / portfolio.
Fund excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, includes ‘doorstep lending’)
Will avoid banks that have a large part of their loan book (or other assets) invested in fossil fuels companies - particular coal, oil and gas.
Funds that do or may invest in insurance companies.
Governance & Management
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Find funds that have policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination. See fund literature for further information.
Find funds that have policies explaining how the fund managers take into account digital/cyber security related risks. Funds with cyber policies will typically favour companies with higher standards or that are helping to solve problems - but strategies vary. See fund literature for further information.
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Fund Governance
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
Environmental, social and governance issues are part of this fund’s reporting of their ‘value’ to clients. AoV reporting is a statutory requirement. Including ESG factors in its calculation is not.
Asset Size
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies.
Impact Methodologies
Funds that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Find funds that specifically set out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Find funds that specifically state that they aim to deliver positive social (i.e. people related) impacts and/or outcomes.
Find funds that direct investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Find funds that invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
How The Fund Works
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
This fund does not use stock lending for performance or risk purposes.
Unscreened Assets & Cash
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation.
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Find funds designed for clients who care about ethical and values-based issues, often alongside sustainability issues also.
Find funds that are available via a tax efficient ISA product wrapper.
Fund Management Company Information
About The Business
Find fund management companies that are smaller or specialise in particular areas - notably, ideally ESG related. Strategies vary.
Sustainable, Responsible &/or ESG Policy:
The investment strategy is founded on the principle of stewardship. Stewardship relates to the ability and desire of the owners and leaders of companies to make good long-term decisions on behalf of the businesses they run while effectively balancing the interest of all stakeholders. The investment team takes a bottom-up and qualitative approach to finding and investing in companies which it believes are both of (a) high quality and (b) contribute to, and benefit from, sustainable development. To determine whether a company contributes to, and benefits from, sustainable development, the team will assess whether the activities of a company lead to positive social or environmental outcomes (see process description below).
An output of our process is that we avoid companies that do not contribute positively to sustainable development. In response to client requests we have documented our position on harmful and controversial products and services. You can read our position statement on our website.
The investment team has a strong conviction that such companies face fewer risks and are better placed to deliver positive long-term, risk-adjusted returns. The team believes that this approach will help to preserve client capital in volatile and falling markets allowing for the steady compounding of returns through economic cycles.
The investment team does not set quantitative thresholds for incorporating sustainability or ESG considerations, but rather evaluates a company’s track record and business model against the following quality and sustainability frameworks and makes qualitative judgements.
Quality assessment
The team will only invest in companies that have been through its quality assessment process. When assessing the quality of a company, they consider quality across three dimensions: management, franchise and financials.
Sustainability assessment
In assessing whether a company “contributes to and benefits from” sustainable development, the investment team will consider whether:
- there is either a direct or enabling link between the activities of the company and the achievement of a positive social or environmental outcome;
- any contribution to positive social or environmental outcomes has resulted from revenue or growth drivers inherent in the company’s business model, strategic initiatives that are backed by research and development or capital expenditure, or from the company’s strong culture and sense of stewardship e.g. for equity and diversity; and
- the company recognises potential negative social or environmental outcomes associated with its product or services and works towards minimising such outcomes, e.g. a company that sells affordable nutritious food products in plastic packaging, but is investigating alternative packaging options.
The investment team documents and discloses its assessment and framework mapping of investee companies on its website through its Portfolio Explorer tool.
Process:
Sustainability is core to our investment philosophy and integrated into our investment process. The investment team focus on the sustainability of each company’s products and services as well as operational ESG factors. We define development as sustainable if it furthers human development and has an ecological footprint that respects planetary boundaries. We focus on company stewardship and sound governance, avoiding businesses linked to harmful activities, and engaging and voting for change. All members of the investment team sign our Hippocratic Oath, pledging to uphold the principles of stewardship.
The sustainable investment objective of our portfolios is to invest in companies which both contribute to, and benefit from, sustainable development achieving positive social and environmental sustainable outcomes. All investee companies contribute to improving human development, while many also contribute to positive environmental outcomes.
Positive social outcomes
The team assesses positive social outcomes by reference to the our human development pillars. Stewart Investors has developed these human development pillars, by reference to, amongst other things, the UN Human Development Index.
Positive environmental outcomes
The team assesses positive environmental outcomes by reference to the climate solutions developed by Project Drawdown, a non-profit organisation that has mapped, measured and modelled over 90 different solutions that it believes will contribute to reaching drawdown – i.e., the point in the future when emissions stop increasing and start to steadily decline.
Our consideration of sustainability is holistic; it includes ESG but is more than ESG. For example, financial sustainability in the form of conservatism around the balance sheet, or the fair treatment of all stakeholders by management in the time of crisis. We believe these considerations to be as important to the sustainability positioning of a company as the product or service it sells.
When assessing a company’s sustainability we ask ourselves the following questions:
- Products and services - Do the products and services make a valuable contribution to sustainable development?
- Context - Can the company benefit from sustainability tailwinds and navigate headwinds?
- Company ethos - Do the culture and values embody sustainability and continuous improvement?
- Operational impact - Is the company trying to reduce impacts from its operations?
We avoid companies that do not contribute to sustainable development and we engage with companies to improve sustainability outcomes. We have established a materiality threshold for harmful or controversial activities at 5% of revenues – 0% threshold for manufacture of tobacco products and controversial weapons. Details can be found in our position statement available on our website.
An initial investment will only be made if the company contributes to, and benefits from, sustainable development. Sustainability must be core to each company’s business model and management must be committed to managing ESG risks and opportunities effectively.
Following a period of research and team discussion which results in the creation of a company report, analysts will add high conviction companies (based on quality and sustainability) to the focus list. These companies may stay on this list for a long time before they become positions in one (or more) of our strategies. Whether a company is on the focus list or in the portfolio will depend on an ongoing evaluation of the relative merits of the companies in the strategies and those on the list relating to quality, sustainability, valuation, long term growth prospects, and portfolio construction considerations relating to diversification.
We supplement our internal research around sustainability using Sustainalytics. At the end of each quarter, portfolios are checked to ensure companies meet global norms for best practices and raise no exceptions against our thresholds for harmful activities. We also receive controversy reporting from RepRisk.
Issues such as climate change, biodiversity and water, human rights and modern slavery, and diversity and inclusion are integrated into our investment selection and engagement and voting processes. Our approach to climate change is explained in detail in our recently published report. Our approach to biodiversity and water is reflected in our selection of companies that mitigate their impact on the natural environment or provide services/products that improve efficiencies. We have engaged on a number of related issues such as palm oil, deforestation, plastic waste and the use of harmful chemicals. Human rights and modern slavery are a risk throughout the supply chain of our investee companies. Our approach is to focus on quality companies that treat their employees well and manage the risks in their supply chain effectively. Where we identify problems we engage. Our recent collaborative engagement on conflict minerals in the semi-conductor supply chain is a good example of this. Our approach to diversity is explained in our statement and article about what we have done so far. We will provide updates on related activities on these issues, amongst others, in our annual report.
Dialshifter
This fund is helping to ‘shift the dial from brown to green’ by…
- Investing in companies contributing to sustainable development
- Avoiding companies engaged directly in harmful and controversial products and services
- Engaging and voting to improve companies’ environmental and social policies and processes and practices (including leading collaborative engagements)
- Promoting transparency and accountability
- Researching and knowledge sharing on sustainable investing.
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…
engaging with investee companies on their net zero targets and action plans. Creating transparent climate change reporting and sharing our learning with clients, prospects and the industry. Given our investment approach is committed to allocating capital to high-quality companies that are developing and implementing solutions to alleviate climate change and biodiversity loss, while not investing in fossil fuel companies, our portfolio are c.90% lower in carbon than their corresponding benchmarks, free of fossil fuel extraction companies, and have more than 50% of companies contributing to climate change solutions.
SDR Labelling: Unlabelled with sustainable characteristics
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
|
|---|---|---|---|---|---|---|---|---|
Stewart Investors Asia Pacific and Japan All Cap Fund |
Sustainability Tilt | Unlabelled with sustainable characteristics | OEIC | Asia Pacific | Equity | 30/06/1988 | Sep 2024 | |
ObjectivesThe Fund aims to achieve capital growth over the long-term (at least five years).
Sustainability objective The sustainable objective of the Fund is to invest in companies which both contribute to, and benefit from, sustainable development, achieving positive social and environmental outcomes. All investee companies contribute to improving human development, while many also contribute to positive environmental outcomes. |
Fund Size: £445.00m (as at: 30/06/2024) Total Screened Themed SRI Assets: £15173.00m (as at: 30/06/2024) Total Responsible Ownership Assets: £15173.00m (as at: 30/06/2024) Total Assets Under Management: £15173.00m (as at: 30/06/2024) ISIN: GB0030184088, GB00B50G1435, GB0030183890, GB00B57XX416 |
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Sustainable, Responsible &/or ESG OverviewThe Fund aims to achieve absolute returns over the long-term by making investments into high-quality companies that contribute to, and benefit from, sustainable development. The team achieves positive social and environmental outcomes by avoiding companies that participate in harmful and controversial practices and investing in, and engaging with, companies that directly or indirectly support positive social and environmental outcomes such as health and wellbeing, financial inclusion, waste, water and energy efficiency and renewable energy. Engagement and voting are used as tools to improve the underlying companies’ approaches to social and environmental issues. The team uses Project Drawdown to map the portfolio to climate change and biodiversity solutions and Human Development Pillars to map to social factors like health and wellbeing, financial inclusion and water and sanitation. All holdings are also mapped to the Sustainable Development Goals. |
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Primary fund last amended: Sep 2024 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Sustainability focus
Find funds which substantially focus on sustainability issues
Sustainability theme or focus
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
Encourage more sustainable practices through stewardship
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
UN Global Compact linked exclusion policy
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Report against sustainability objectives
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance) Environmental - General
Environmental policy
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Limits exposure to carbon intensive industries
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Plastics policy
Funds that are reviewing or encouraging companies to manage down the overuse of plastics (particularly single use, non-recyclable plastics). These funds will typically aim to encourage the use of alternative materials, but are unlikely to exclude companies purely on the basis of their use of plastics. Strategies vary. See fund information for further detail. Climate Change & Energy
Climate change / greenhouse gas emissions policy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Coal, oil & / or gas majors excluded
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Fracking and tar sands excluded
Funds that avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary. See fund information for further information.
Arctic drilling exclusion
Funds that avoid companies that are involved in extracting oil from the Arctic regions. See fund literature for further details.
Fossil fuel reserves exclusion
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
Encourage transition to low carbon through stewardship activity
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Nuclear exclusion policy
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
Fossil fuel exploration exclusion - direct involvement
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Fossil fuel exploration exclusion – indirect involvement
The fund manager excludes companies with indirect involvement in fossil fuel exploration. For example they would be expected to exclude banks and insurance companies that are effectively enabling new coal, oil and or gas reserves to be discovered and in due course extracted through the provision of necessary finance or services.
Require net zero action plan from all/most companies
Find funds that require all, or almost all, of the companies it invests in to have a ‘net zero action plan’ - meaning that the companies they invest in have worked out how they will, over time, reduce their total carbon (and other greenhouse gas) emissions to nil.
TCFD reporting requirement (Becoming IFRS)
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/ Social / Employment
Labour standards policy
Find funds that have a labour standards policy - which can be expected to mean that the fund will invest in / favour companies that have higher standards in this area - although fund strategies can vary significantly (as with all policy areas). See eg https://www.ilo.org/international-labour-standards Ethical Values Led Exclusions
Ethical policies
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Tobacco and related products - avoid where revenue > 5%
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of tobacco products including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Alcohol production excluded
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Gambling avoidance policy
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Pornography avoidance policy
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Animal welfare policy
Find funds with policies that require specific animal welfare standards to be met. These may reference well-known welfare standards (3Rs - Replace, Reduce, Refine) or certification schemes. Strategies vary. See fund information for further detail. Human Rights
Human rights policy
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Child labour exclusion
Find funds that have policies in place to ensure they do not invest in companies that employ children.
Oppressive regimes (not free or democratic) exclusion policy
Find funds with policies that exclude companies or other assets where regimes are not democratic, or where people may be oppressed. May use eg. Freedom House research. Strategies vary. See fund literature for further information.
Responsible supply chain policy or theme
Find funds that have policies or a theme that relates to the responsible management of supply chains. These may relate to employment issues, notably people employed by their suppliers, as well as the sourcing of materials and products. See fund literature for further information.
Indigenous peoples’ policy
The fund has a policy which sets out their position on the treatment of indigenous people by investee assets/companies - typically meaning they won't invest in companies with low standards.
Modern slavery exclusion policy
The fund has a policy which excludes assets with involvement in Modern Slavery Gilts & Sovereigns
Does not invest in sovereigns
Find funds that do not invest in / exclude 'sovereigns' - debt issued by governments. See eg https://www.investopedia.com/terms/s/sovereign-debt.asp Banking & Financials
Invests in banks
Find funds that include banks as part of their holdings / portfolio.
Predatory lending exclusion
Fund excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, includes ‘doorstep lending’)
Exclude banks with significant fossil fuel investments
Will avoid banks that have a large part of their loan book (or other assets) invested in fossil fuels companies - particular coal, oil and gas.
Invests in insurers
Funds that do or may invest in insurance companies. Governance & Management
Governance policy
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Avoids companies with poor governance
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Anti-bribery and corruption policy
Find funds that have policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination. See fund literature for further information.
Digital / cyber security policy
Find funds that have policies explaining how the fund managers take into account digital/cyber security related risks. Funds with cyber policies will typically favour companies with higher standards or that are helping to solve problems - but strategies vary. See fund literature for further information.
Encourage board diversity e.g. gender
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Encourage higher ESG standards through stewardship activity
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Fund Governance
ESG integration strategy
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
ESG factors included in Assessment of Value (AoV) report
Environmental, social and governance issues are part of this fund’s reporting of their ‘value’ to clients. AoV reporting is a statutory requirement. Including ESG factors in its calculation is not. Asset Size
Invests in small, mid and large cap companies / assets
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies. Impact Methodologies
Aims to generate positive impacts (or 'outcomes')
Funds that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Measures positive impacts
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Positive environmental impact theme
Find funds that specifically set out to help deliver positive environmental impacts, benefits or 'real world' outcomes.
Positive social impact theme
Find funds that specifically state that they aim to deliver positive social (i.e. people related) impacts and/or outcomes.
Invests in environmental solutions companies
Find funds that direct investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Invests in social solutions companies
Find funds that invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Aim to deliver positive impacts through engagement
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets How The Fund Works
Significant harm exclusion
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Assets mapped to SDGs
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Combines norms based exclusions with other SRI criteria
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Focus on ESG risk mitigation
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
Do not use stock / securities lending
This fund does not use stock lending for performance or risk purposes. Unscreened Assets & Cash
Assets typically aligned to sustainability objectives 70 - 79%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives 80 – 89%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives > 90%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets
All assets (except cash) meet published sustainability criteria
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation. Intended Clients & Product Options
Intended for investors interested in sustainability
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Intended for clients interested in ethical issues
Find funds designed for clients who care about ethical and values-based issues, often alongside sustainability issues also.
Available via an ISA (OEIC only)
Find funds that are available via a tax efficient ISA product wrapper. Fund Management Company InformationAbout The Business
Boutique / specialist fund management company
Find fund management companies that are smaller or specialise in particular areas - notably, ideally ESG related. Strategies vary. Sustainable, Responsible &/or ESG Policy:The investment strategy is founded on the principle of stewardship. Stewardship relates to the ability and desire of the owners and leaders of companies to make good long-term decisions on behalf of the businesses they run while effectively balancing the interest of all stakeholders. The investment team takes a bottom-up and qualitative approach to finding and investing in companies which it believes are both of (a) high quality and (b) contribute to, and benefit from, sustainable development. To determine whether a company contributes to, and benefits from, sustainable development, the team will assess whether the activities of a company lead to positive social or environmental outcomes (see process description below).
An output of our process is that we avoid companies that do not contribute positively to sustainable development. In response to client requests we have documented our position on harmful and controversial products and services. You can read our position statement on our website.
The investment team has a strong conviction that such companies face fewer risks and are better placed to deliver positive long-term, risk-adjusted returns. The team believes that this approach will help to preserve client capital in volatile and falling markets allowing for the steady compounding of returns through economic cycles.
The investment team does not set quantitative thresholds for incorporating sustainability or ESG considerations, but rather evaluates a company’s track record and business model against the following quality and sustainability frameworks and makes qualitative judgements.
Quality assessment The team will only invest in companies that have been through its quality assessment process. When assessing the quality of a company, they consider quality across three dimensions: management, franchise and financials.
Sustainability assessment In assessing whether a company “contributes to and benefits from” sustainable development, the investment team will consider whether:
The investment team documents and discloses its assessment and framework mapping of investee companies on its website through its Portfolio Explorer tool. Process:Sustainability is core to our investment philosophy and integrated into our investment process. The investment team focus on the sustainability of each company’s products and services as well as operational ESG factors. We define development as sustainable if it furthers human development and has an ecological footprint that respects planetary boundaries. We focus on company stewardship and sound governance, avoiding businesses linked to harmful activities, and engaging and voting for change. All members of the investment team sign our Hippocratic Oath, pledging to uphold the principles of stewardship.
The sustainable investment objective of our portfolios is to invest in companies which both contribute to, and benefit from, sustainable development achieving positive social and environmental sustainable outcomes. All investee companies contribute to improving human development, while many also contribute to positive environmental outcomes.
Positive social outcomes The team assesses positive social outcomes by reference to the our human development pillars. Stewart Investors has developed these human development pillars, by reference to, amongst other things, the UN Human Development Index.
Positive environmental outcomes The team assesses positive environmental outcomes by reference to the climate solutions developed by Project Drawdown, a non-profit organisation that has mapped, measured and modelled over 90 different solutions that it believes will contribute to reaching drawdown – i.e., the point in the future when emissions stop increasing and start to steadily decline.
Our consideration of sustainability is holistic; it includes ESG but is more than ESG. For example, financial sustainability in the form of conservatism around the balance sheet, or the fair treatment of all stakeholders by management in the time of crisis. We believe these considerations to be as important to the sustainability positioning of a company as the product or service it sells.
When assessing a company’s sustainability we ask ourselves the following questions:
We avoid companies that do not contribute to sustainable development and we engage with companies to improve sustainability outcomes. We have established a materiality threshold for harmful or controversial activities at 5% of revenues – 0% threshold for manufacture of tobacco products and controversial weapons. Details can be found in our position statement available on our website.
An initial investment will only be made if the company contributes to, and benefits from, sustainable development. Sustainability must be core to each company’s business model and management must be committed to managing ESG risks and opportunities effectively.
Following a period of research and team discussion which results in the creation of a company report, analysts will add high conviction companies (based on quality and sustainability) to the focus list. These companies may stay on this list for a long time before they become positions in one (or more) of our strategies. Whether a company is on the focus list or in the portfolio will depend on an ongoing evaluation of the relative merits of the companies in the strategies and those on the list relating to quality, sustainability, valuation, long term growth prospects, and portfolio construction considerations relating to diversification.
We supplement our internal research around sustainability using Sustainalytics. At the end of each quarter, portfolios are checked to ensure companies meet global norms for best practices and raise no exceptions against our thresholds for harmful activities. We also receive controversy reporting from RepRisk.
Issues such as climate change, biodiversity and water, human rights and modern slavery, and diversity and inclusion are integrated into our investment selection and engagement and voting processes. Our approach to climate change is explained in detail in our recently published report. Our approach to biodiversity and water is reflected in our selection of companies that mitigate their impact on the natural environment or provide services/products that improve efficiencies. We have engaged on a number of related issues such as palm oil, deforestation, plastic waste and the use of harmful chemicals. Human rights and modern slavery are a risk throughout the supply chain of our investee companies. Our approach is to focus on quality companies that treat their employees well and manage the risks in their supply chain effectively. Where we identify problems we engage. Our recent collaborative engagement on conflict minerals in the semi-conductor supply chain is a good example of this. Our approach to diversity is explained in our statement and article about what we have done so far. We will provide updates on related activities on these issues, amongst others, in our annual report.
DialshifterThis fund is helping to ‘shift the dial from brown to green’ by…
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… engaging with investee companies on their net zero targets and action plans. Creating transparent climate change reporting and sharing our learning with clients, prospects and the industry. Given our investment approach is committed to allocating capital to high-quality companies that are developing and implementing solutions to alleviate climate change and biodiversity loss, while not investing in fossil fuel companies, our portfolio are c.90% lower in carbon than their corresponding benchmarks, free of fossil fuel extraction companies, and have more than 50% of companies contributing to climate change solutions. SDR Labelling: Unlabelled with sustainable characteristics |
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