Stewardship: Responsible Investment and Environmental, Social and Governance Factors
Governance, social and environmental issues are an important part of considering the potential return of an investment. In the case of shares in companies, for example, the ability of the management team is an important governance factor determining potential future success or failure. We cannot underestimate the potential impact of a changing climate on the long-term future of companies, whether that be through potential government measures to limit the emission of greenhouse gases, or adaptations required to operate in a changing, warmer climate. However, the issue of climate change and the impact on investments is more uncertain in the near-term. Will the COP21 Paris agreement lead to a widespread carbon tax, or substantive limitations on greenhouse gas emissions, for example? Will it even lead to a reduction in subsidies for fossil fuels? We don’t know the answers to these questions for certain but they do play a role in evaluating the prospects for companies and the risks attached to investments. They are therefore issues we must consider.
This part of our website describes the approach we take to environmental, social and governance (ESG) factors and to responsible investment more generally.
- Our proxy voting policy can be viewed here.
- Reports are also available on governance and our engagement with companies here.
Fund managers are stewards of their clients’ funds. It is in our role as shareholders that we are in a position to exercise that role and assist companies in protecting, and growing, returns for our clients. In the UK, we are required by law to provide a statement on our compliance policy in accordance with the UK Stewardship Code. The full statement, which describes how we engage with companies to the benefit of our clients can be viewed here.