How do we define our purpose? What does effective stewardship mean to us? Our definitions on sustainability and investment demonstrate our understanding of concepts driving all that we do.
To reveal the definitions, click on the tiles below.
(Also referred to as active investing)
Actively selecting investments based on an investment team’s own judgment, research and experience rather than an asset’s index weighting. An actively managed fund is not a tracker fund.
(Also referred to as engagement)
Using the rights of influence as financial stakeholders to actively engage companies or assets and other stakeholders to further the long-term interests of end investors. This consists of objective-driven dialogue seeking positive and sustainable change in the purpose, governance, strategy operations and in the impact on the environment and society.
A measure of the percentage of a fund that is invested differently than its benchmark. It expresses how active the fund manager is. (See ‘Active Management’.)
(Also referred to as public policy engagement)
Actively seeking to influence change in public policy in the interests of investors and the wider society by engaging with policymakers, regulators and industry bodies on a range of issues. These include: the financial system and investment industry, corporate governance, business purpose, climate change, inequality and inclusion.
- Environmental: climate change, natural resource stewardship, pollution, waste and the circular economy.
- Social: human rights, indigenous people’s rights, child and slave labour, bribery and corruption, inclusion and diversity, health and safety, ethics, conduct and culture.
- Governance: board composition, succession planning, executive remuneration, minority shareholder rights and protections, and investor stewardship.
Please note, the items listed above for each factor are not exhaustive. They are examples of each factor that are included solely for illustrative purposes.
A responsible investing approach which systematically and consequentially integrates financially material ESG factors and engagement insights alongside traditional performance factors in investment analysis and investment decisions.
(Also referred to as positive screening)
A responsible investing approach which invests in assets with an above-average ESG performance, thereby creating a portfolio with a better ESG performance than the benchmark.
An investment strategy that excludes sectors or behaviours that reflect a set of values including moral or ethical beliefs.
An investment firm or team’s policy to exclude investments from specific sectors, business activities and/or behaviours from their investment universe.
A responsible investing approach which excludes investments from specific sectors, business activities and/or behaviours from the investment universe.
Purposefully targeting companies which can generate positive social or environmental outcomes in addition to financial gains. Impact investors mainly target investments that are able to provide solutions which make a positive contribution towards the attainment of the 17 Sustainable Development Goals (SDGs).
A hub of expertise that leads and oversees our advocacy positions; works with the Investment Office to ensure that our investment and stewardship teams integrate stewardship and ESG factors in their activities; and holds every department and employee in the firm accountable for applying best practice responsible business policies in governance, client relations, people and supplier management. In doing so, the Responsibility Office keeps our purpose of creating wealth sustainably for our clients and their investors at the centre of everything we do.
Convened by the UN, the Sustainable Development Goals (SDGs) are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice. There are 17 goals, 169 targets, and progress towards these targets are tracked by 232 indicators inherent in the goals.
Engaging with investments (or assets) for positive social and environmental outcomes that support the attainment of the SDGs.
Investing in assets with the expressed intention to create a measurable, positive, real-world outcome to support the attainment of specific SDGs and generate superior sustainable financial returns.
An investment strategy which identifies SDG-aligned engagement opportunities that enhance long term financial stakeholder value and address a specific societal or environmental need in addition to delivering strong financial returns for investors.
An investment strategy which excludes sectors or behaviours that reflect an investor’s moral or ethical beliefs; and/or an approach that promotes social or environmental themes in its investments.
The role in which investment managers use the rights – if not the obligation – of financial stakeholders to engage with companies or assets to pursue the objective of sustainable wealth creation for investors.
This is the purpose of investment – to deliver sustainable and superior long-term returns for investors, recognising that meeting the material needs of the environment, workers and society as fundamental factors that support value creation.
There are two broad types of thematic investing:
- Thematic investing (social or environmental):
An investment approach that promotes specific social or environmental themes, and often allows investors to express their values. It can exclude or target the best ESG performers or invest in the most impactful companies.
- Thematic investing (megatrends):
An investment approach that focuses on powerful, long-term global themes or megatrends that are both structural and transformative in nature.
Exercising the rights given to equity holders in companies to vote on business matters and director elections during annual and extraordinary general meetings.
Defining best-practice ESG
Which analytical tools and disciplines separate the best from the rest?
Sustainability in action
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