South from Arthur’s Seat © Paul Donaldson
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Sustainability in practice.
We factor in sustainability to our investment approach in two complementary ways: ESG Integration and Stewardship.
The goal is always to add long-term financial value for our clients.
We also offer additional ‘sustainable investment’ options for interested clients.
ESG Integration
Experience has taught us that the companies which adhere to the highest standards of corporate governance and effectively manage sustainability factors typically make the best long-term investments for clients.
Reflecting this, we seek to identify the financially material risks and opportunities that are most relevant to each company and integrate this analysis into our investment process.
Our analysis covers three key areas:
- Environmental and climate considerations
How does a company approach environmental and climate considerations? What is its exposure to the physical and financial risks of the long-term transition to a low-carbon economy?
- Social considerations and human capital
How does a company approach its people, stakeholders, and wider society? How robust is its social licence to operate?
- Corporate governance
Does a company adhere to appropriate standards of corporate governance and oversight? To what extent does management discharge its obligations to stakeholders in a fair and responsible manner?
Pale Gold, Craignish © Ethel Walker
Stewardship
We are committed to being good stewards of our clients’ assets. Through the careful allocation, management and oversight of capital, we aim to create long-term value for our clients.
It is our duty to act as trusted stewards of our clients’ assets by engaging constructively with the companies in which we invest and by exercising our shareholder voting rights in a careful and considered manner.
Engagement
Engagement has always been an integral part of what we do. Constructive dialogue with management teams gives us insight into how a company operates.
Our selective approach means we invest in a relatively small group of companies. This allows us to engage regularly and to address in detail only those issues we deem material to each company.
Proxy voting
Proxy voting provides an opportunity to encourage high standards of governance and sustainability, and to protect long-term value.
While we carefully consider the views of a company when determining how to vote, we always vote in the best interests of our clients. We consider every resolution on an individual basis and, where we can vote, we have a 100% voting record.
Our Research team is ultimately responsible for all aspects of ESG Integration and Stewardship, with specialist guidance and analytical support from our Stewardship and Sustainability team.
Integrity as standard
Our approach to factoring in material ESG issues runs through every one of our strategies. However, we understand that sometimes a client might need something extra to meet their specific investment requirements. We’re here to help.
Additional Objective Portfolios
Our ‘Additional Objective Portfolios’ (AOP) framework was introduced in 2022 for clients who want their portfolio managed in line with clearly defined ‘higher bar’ sustainability requirements, such as the ‘Article 8’ EU Sustainable Finance Disclosure Regime.
In these variants of our core portfolios, each holding is subject to an additional – and ongoing – suitability assessment that builds on our existing ESG analysis.
Keep Athens in Mind © Brent Millar
Signatories and memberships.
We are members or signatories of several groups that complement our own stewardship activities.
Air Mail © Gordon Mitchell
Annual Sustainability Report.
In our Annual Sustainability Report, we share our progress on ESG Integration and Stewardship. It explores the work we’ve done over the past year to protect and enhance long-term value for our clients - from engagement and proxy voting to sustainability-related research and analysis.
In our 2024 edition, we reassert the consistency of our approach at a time of significant industry change, while also highlighting enhancements to our process and ongoing investment in our capabilities.
Task Force on Climate-related Financial Disclosures Entity Report.
Our 2024 entity level ‘TCFD’ report, available below, sets out our approach to managing climate and transition related risks, and the opportunities related to both our own operations and our clients’ portfolios.
Focusing on work undertaken by the firm in 2024, the report is aligned with the disclosure recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and complies with the relevant FCA ESG Sourcebook requirements.
Product level TCFD disclosures for individual portfolios are also available on demand. Please follow up with your usual Walter Scott client contact if this would be of interest.
Reserve © Gordon Mitchell
Document library
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Say hello to our client service team.
If you would like to find out more about how to invest with us, either directly or via one of our partners, please get in touch. Our dedicated client service team is waiting to help.
+44(0)131 225 1357
clientservice@walterscott.com
