Sustainable investing insights

Climate change, driven by rising greenhouse gas emissions, is impacting every sector and region across the globe today – floods, droughts and extreme weather are becoming more severe and frequent. Climate change presents a range of risks for investors, but also a range of opportunities.

We consider material climate-related risks and opportunity throughout our investment process, with the aim of delivering better outcomes for clients. Utilising bespoke climate research and tools, we integrate climate analysis in investment analysis and processes, including in our active ownership activities. For some clients, we also invest in credible transition leaders and in climate solutions.

We are committed to delivering on our commitments to net-zero directed investing in order to manage the risks presented by climate change. That means, acting to be a positive catalyst for net-zero via actions across five areas of focus:

A healthy planet is critical to the global economy and our way of life. Unfortunately, in recent decades the world has experienced significant levels of nature loss. With this loss comes increased potential environmental economic risks from supply chain disruptions, regulatory restrictions and costs and changing client demands.

As investors we don’t see the risks linked to the loss of our planet’s life support systems as something niche, sitting only in responsible investment products. This is why we have developed an investment approach to natural capital, based around six key areas of focus.

As investors, we recognize the impact that social issues can have on our investments and the role we can play in promoting a fairer society. The rights and livelihood of others are key considerations in our social pillar, where our focus areas include:

• Human rights & communities
• Labour & employment
• Diversity, equity & inclusion (DEI)

We believe that the treatment of workers and communities is inherently linked to the resilience and long-term success of our investments. We also have a responsibility to demonstrate respect for workers and communities in our own activities and to encourage positive change where needed.

The International Bill of Human Rights and core conventions of the International Labour Organization (ILO) guide our approach. The UN Guiding Principles on Business and Human Rights (UNGPs) are our authoritative standard for understanding our responsibilities and those of our investments. Our approach to social issues entails six key areas:

For companies aiming to create inclusive businesses which fully reflect their customer base and local markets, it is important for them to consider diversity of - background, gender, race, ethnicity, nationality, sexual orientation and physical ability.

Our DEI position statement details what we expect of companies in relation to diversity, equity and inclusion. This is a core component of our active engagement and voting approach which we are continuously enhancing. In 2022, we introduced ethnic diversity voting policies in the US and UK.

Our DEI position statement for investments
Human rights approach
View other position statements
Our voting guidelines

We believe companies adopting improving practices in corporate governance and risk management will be more successful and deliver enhanced returns to shareholders.

We also believe it is our duty to be active and engaged owners on behalf of our clients. We seek to improve the financial resilience and performance of investments; thus enhancing and preserving the value of our clients' investments.

We draw on a number of international, legal and voluntary agreements for guidance on business ethics and governance. This includes the UK Stewardship Code and our primary source is the OECD’s Guidelines for Multinational Enterprises, which reflect governments’ expectations as to how responsible businesses should act.

It’s vital that we have integrity and transparency in how we operate, building trust in both our business and sector. As an investor, this is what we expect of investee companies and it is our focus operationally. We believe that all businesses should have consideration of:

Position statements
Stewardship report
Voting policies