Annual ESG Reports

Through our Annual ESG report, we aim to demonstrate the work that we have undertaken around ESG issues over the past year. These reports include case studies of our work on individual companies, highlights of our company engagement and an update on what we as a firm are doing to improve our ESG credentials.

Annual ESG Report 2019-2020

Annual ESG Report 2018-2019

Quarterly ESG Reports

Our Quarterly ESG reports share highlights of our ESG-related activity alongside our Research team’s insights into timely ESG issues.

Quarterly ESG Report Q2 2020

Quarterly ESG Report Q1 2020

Quarterly ESG Report Q4 2019

Quarterly ESG Report Q3 2019

ESG Insights

Responsible Investing
Our approach to environmental, social and corporate responsibility is firmly embedded in our research process.

A Healthy Balance
The rising demand for healthcare creates new pressures for the industry, forcing companies to balance profitability, productivity, the patient and public service.

Living the Dream
The urgent need to address climate change tends to inspire fear, even panic. Dr Gabrielle Walker, a recognised expert on the topic, argues that a more positive approach is required.

Opening Minds to Diversity of Thought
Diversity comes in many forms. One of the most influential is cognitive diversity, which ensures that teams include individuals with different views.

Setting Boundaries on Stewardship
Professor Peter Montagnon argues that shareholder’s rights and responsibilities are misunderstood.

Standards at the End of the Supply Chain
Investment Managers Alan Lander and Des Armstrong travelled to Vietnam and Bangladesh to revisit apparel and footwear factories in South-East Asia.

Supply Chains Trapped as Western Retailers Close their Doors
Retailers adaption to the Covid-19 crisis is not only impacting their employees, but just as stark workers at the end of the supply chain.

Talking ESG in Texas
Few issues energise environmental campaigners more than fracking. Investment Manager Des Armstrong recently visited Texas to see how one producer is working to improve its operations environmentally.

Engagement Case Studies

Engagement with companies is an integral part of our research process. It helps us to understand the particular strengths and vulnerabilities of a business, and the basis for its long-term strategy. Ongoing dialogue also allows us to raise concerns or encourage change across all aspects of a business, including ESG. We do not just accept well-rehearsed corporate messages; we listen, probe and then reach our own judgement.

Companies are chosen for illustrative purposes only to demonstrate our ESG Investment process and are not intended to be an indication of performance. This information should not be considered a recommendation to purchase or sell any security.


E | S | G

We met with the chief financial officer of Google’s parent company, Alphabet. During our meeting, we spent considerable time discussing the reputational and operational challenges facing the company. These include shareholder misgivings around governance, and employee discontent about conditions and treatment, as well high-profile concerns around privacy and unsavoury online content. To some extent, the company’s position at the forefront of a rapidly evolving industry makes some of these challenges unavoidable. However, management could do much more to address the concerns of stakeholders; a view we expressed during our meeting.


E | S | G

EssilorLuxottica is the product of a 2018 merger between the French lens maker Essilor and the Italian eyewear group Luxottica. At a meeting in March, we raised a number of concerns around the cultural differences between the two companies. Those differences appeared central to the fact that integration plans were not yet agreed and that the search for a new CEO for the combined group was expected to take almost two years. Only days later, a number of press reports published clear details of governance conflicts between the two businesses.

Following our meeting, we concluded that over the longer term, the combined group may well be a powerful player in the strong growth market of corrective eyewear. However, we also agreed that management’s current behaviour was of material concern. From our perspective, the risk that cultural and management misalignment might have a negative operational impact on the company overall could not be ignored.


E | S | G

There are very few businesses that don’t have an ESG narrative to share. In a meeting with the chief financial officer of 3M, it was made clear that its customers aren’t just talking about wanting sustainable products anymore, they’re now demanding them. And 3M, is only too happy to oblige! In EVs (electric vehicles), 3M provides myriad products and solutions that go into the design and creation of an electric vehicle. For instance, there is a significant and growing number of cameras in EVs. 3M offers solutions to hide the cameras. It also develops vital components in EV batteries and produces sealants that bind plastic car parts together. By 2030 more than half the cost of building a car will come from electronic components, and 3M has a broad range of solutions for both component makers themselves, and for the assemblers.


E | S | G

We enjoyed a wide-ranging discussion with a number of Colgate-Palmolive’s senior managers. Among other subjects, the conversation touched on director skills and qualifications, sustainability, preferred shares and priorities for use of cash. Colgate has a well-structured board in terms of gender, independence and a good mix of tenure. Furthermore, all members of the audit committee are financial experts. The company’s 2018 proxy statement also provided more disclosure around the qualities sought in board members and the rationale for each quality. The listed qualities are business operations, industry, regulatory and public service, information technologies, international, corporate governance and diversity.

We also discussed Colgate’s stated sustainability commitments and progress with its 2015-2020 plan. The aims of this plan range from reaching 1.3 billion children with the company’s ‘Bright Smiles, Bright Futures’ programme, to partnering with local and global organisations to bring clean water to under-served parts of the globe. Colgate has been awarded an “A” score for both water and climate by the CDP and it is committed to 100% recyclables (reusable, compostable) in all categories, and 25% recycled content for plastics by 2025.


E | S | G

As a soft drink supplier, primarily through its Vimto brand, Nichols is at the forefront of the debate around plastics. Following its half year results, we discussed this and other environmental issues with the company’s chief financial officer (CFO).

Vimto’s packaging is 100% recyclable so the issue is what the consumer then does with that packaging. To what extent soft drink distributors can change, or be responsible for, consumer behaviour, is a challenging question. Overall, 75% of packaging that is taken home is recycled, but recycling of ‘on-the-go’ product categories is lower at 43%. Consumers tend to be less diligent with their recycling when out and about.

The CFO stressed that the company would continue to work with its industry peers to enhance labelling and education on the recyclability of its products so that there is no misconception as to what can and what can’t be recycled. This will hopefully nudge consumer behaviour. The BFCA (the industry association that Nichols and most UK beverage companies are part of ) will work with the UK government on a plastics consultation starting in the autumn. On the agenda will be a proposed industry-wide deposit return scheme, which would potentially take a reverse vending machine approach.