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Responsible investment

Our TCFD report can be downloaded from the results and reports page.

Acting responsibly is a key part of our long-term investment philosophy. We commit to constructive, long-term engagement with the companies and funds in which we invest, believing that careful and thoughtful stewardship is essential to addressing Environmental, Social and Governance (‘ESG’) risks and to driving positive change.

We believe that responsible investment and business success go hand in hand. We are committed to building businesses for the long term and consider the ESG impact of the investments that we own.

We expect to invest in businesses which will:

Grow, provide employment and generate economic benefit in an environmentally and socially responsible way, both during and after our ownership.

We aim to invest in companies and funds that:

Take a responsible approach towards the environment and society, built on good governance practices.

In the past, our stewardship activities focused primarily on governance matters, most notably in our majority owned investee businesses, which we seek to operate in line with industry good practice. Today, we continue to build on these foundations by incorporating ESG matters into our investment decision-making to ensure that a broader spectrum of issues that are important to us are formally evaluated alongside our key investment criteria. Our investment team consider these issues in its due diligence process when proposing new additions to our portfolio.

Please visit the Sustainability section of the annual report for further information.

PUBLIC COMPANIES

We aim to invest in global businesses with recognised brands, intellectual property and strong market positions that have a good track record of delivering attractive returns. Our approach means that we do not generally invest in capital intensive businesses or companies directly involved in the extraction and production of coal, oil or natural gas. As a consequence of our highly selective and quality orientated investment style:

 

  • we make considered use of our voting rights and vote all our stock ahead of shareholder meetings
  • we expect to vote in line with management recommendations but are prepared to abstain or vote against resolutions where we consider they are not in the interests of our own shareholders
  • we will use our influence through engagement and voting to encourage companies to plan and demonstrate the actions they have taken to address climate risks and opportunities.

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PRIVATE CAPITAL

We invest in established businesses, across a range of sectors, which have robust operating margins, strong management teams and good growth opportunities:

 

  • we introduce a high standard of corporate governance into these businesses, generally with an independent, experienced non-executive chair and formal audit and remuneration committees to support the board
  • our team take non-executive roles in these businesses and use their positions to maintain close relationships with the management teams
  • we hold frequent meetings with management which cover a wide range of subjects, including ESG matters, and regularly review performance
  • we seek to ensure that these companies understand and manage their own environmental impacts
  • we seek to encourage them to invest in suitable technology to improve energy efficiency and make a successful transition to renewable energy and a low carbon future.

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FUNDS

The Funds team invest in private equity funds managed by leading managers in North America and Asia:

 

  • we expect managers to consider all factors, including ESG matters, when seeking to maximise returns whilst taking account of the associated risks
  • we will encourage our fund managers to consider the risks and opportunities presented by climate change in their investment selection process and in the future to explore initiatives to reduce emissions from the businesses within their funds.

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