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Stewardship Report 2017/18

As a long-term investor we are encouraged that responsible stewardship in our industry is continuing to gain momentum. A focus on wider impacts, in addition to financial returns, is finally becoming a mainstream conversation. Our industry plays an important role in shifting capital towards a more sustainable future. At Investec Asset Management we see our commitment to stewardship as an integral part of our effort to build a better investment firm to help finance a better world.

Download the 2017/18 Stewardship Report


Hendrik du Toit, Chief Executive Officer, discusses the role of stewardship in the investment industry

“We see our commitment to stewardship as an integral part of our effort to build a better investment firm to finance a better world.”

- Hendrik Du Toit

Our Stewardship commitments

We aim to preserve and grow the real purchasing power of the assets entrusted to us by our clients over the long term. In fulfilling this purpose, we assume a stewardship role, including the effective exercising of our clients’ ownership rights. We monitor, evaluate, and, if necessary, actively engage or withdraw investments, with the aim of preserving or adding value to our clients’ portfolios.

This report provides examples of how we are integrating ESG considerations into our investment process within different teams, as well as the engagement, advocacy and voting we carry out across the world.

Five core principles continue to guide our ESG efforts.

Disclosure

Disclosure

Disclose how we discharge our stewardship duties through publically available policies and reporting.

Governance

Governance

Address internal governance of effective stewardship including conflicts of interest and potential obstacles.

Integration

Integration

Support a long-term investment perspective by integrating, engaging and escalating and monitoring material ESG risks and opportunities.

Exercise rights

Exercise rights

Exercise our ownership rights responsibly, including engagement and voting rights.

Act together

Act together

Where appropriate, act alongside other investors.

Key ESG developments at Investec Asset Management


Therese Niklasson, Global Head of ESG


Useful links: Stewardship policy  |  Ownership policy


Integration progress

Integrating ESG into how we allocate capital is an important focus for us. This section highlights our ongoing work to deepen ESG integration across the different strategies through the integration programmes. These programmes allow us to create accountability and clear objectives for the investment teams and a way to map progress.


Read more about ESG integration with investments

Tackling big issues through investment management

Together with stakeholders across the industry we have been analysing the wide reaching implications that climate change and the Sustainable Development Goals (SDGs) have on society, the environment and the economy.

Climate change

The wide-ranging implications of climate change have placed a particular focus on the role and stance of the finance industry towards this issue. This past year saw a number of developments that emphasised our role as active owners. We are committed to:

  1. Engaging with investee companies.
  2. Measuring the contribution of our portfolio companies and portfolios.
  3. Engaging in advocacy work with the broader industry.
  4. Considering investment risks and opportunities when making investment decisions.

Sustainable Development Goals

The 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development asks all countries to “mobilise efforts to end all forms of poverty, fight inequalities and tackle climate change, while ensuring that no one is left behind.” We are looking to understand, map, and translate the SDGs into a measurable and quantifiable framework in three areas.

Business-wide Private markets Public markets
Investing for a positive impact on society and the environment. Mapping the SDGs to both the Africa Infrastructure and the Africa Private Equity funds allows us to measure and target the contribution of investment projects to the SDGs. We are considering mapping and scoring approaches that will bring together an understanding of sovereign SDG priorities.

 

Active Ownership

We aim to allocate our clients’ capital as efficiently as possible and to preserve and grow their wealth over the long term. We therefore take an active and transparent approach to stewardship and ownership. We believe this benefits our clients and improves broader society.

We are increasingly focused on the need to ensure active ownership is fully aligned with ESG integration. Once client capital is invested, active ownership can help to reduce risk and support the investment thesis, but there may still be loss of capital after negative corporate events.

Simon Brazier, Co-Head of Quality, discusses active ownership

Investec Asset Management's voting in a snapshot

Percentage of votes casts per region

Source: Investec Asset Management, ISS ProxyExchange. Data is for the 12 months to end March 2018.

Number of votes cast

(on a per meeting basis) by region vs number of meetings with at least one vote against/abstain/withhold

Source: Investec Asset Management, ISS ProxyExchange. Data is for the 12 months to end March 2018. *Dissenting means against/abstain/withhold.

Highlights from the team

The ESG team is a global team of ESG experts from a diverse set of backgrounds, with academic and professional expertise across a broad range of ESG areas. Currently a team of seven, they work closely with the investment teams to support the integration of ESG into the investment process, provide a focus for active ownership and facilitate research and learning.

Over the 2017-2018 reporting period the ESG team focused on:

  • Accelerating the development of tailored integration processes.
  • Deepening investment team knowledge of ESG issues.
  • Defining the core themes that will drive broader engagement efforts that are central to our investment exposure and aligned with our clients concerns.
  • Developing internal learning and development, including use of tools and interpretation of ESG data and information.

In the coming year the team plan to deepen integration within these frameworks and strengthen our engagement efforts.

Here are the personal highlights of the year from each team member:

Therese Niklasson

Global Head of ESG

“Continuing our engagement efforts with Chinese companies and departments regarding ESG disclosure and corporate governance. ”

David Couldridge

Head of ESG Engagement

“Introducing a global engagement strategy. Engagements take place as an integral part of our investment process – the investment teams initiate engagement based on their investment process and priorities. ”

Christoph Scaife

ESG Analyst

“Investec’s Private Market capabilities have mapped their portfolios against the United Nations Sustainable Development Goals in an attempt to measure its Developmental Contribution to the development of Africa."

Naasir Roomanay

ESG Analyst

"ESG is considered within every area of investments from the philosophy to education and research, and in active ownership responsibilities. This level of integration remains a priority for IAM. ”

Neil Winspear

ESG Analyst

“Improving the ESG process for the Credit Opportunity Funds and including reporting in all credit applications. Included in the reporting are impact development data points that contribute towards the United Nations Sustainable Development Goals. ”

Rebeca Coriat

ESG Analyst

“Continuing to discharge active ownership responsibilities via proxy voting and engagement, across IAM’s 1,500 holdings spread over 65 different markets and corporate governance regimes. ”

Faye Roberts

ESG Analyst

“IAM has been rated A+ by the PRI for ‘Strategy and Governance’. ”

Investments carry the risk of capital loss.

Important Information

This material is for informational purposes only and should not be construed as an offer, or solicitation of an offer, to buy or sell securities. All of the views expressed about the markets, securities or companies reflect the personal views of the individual fund manager (or team) named. While opinions stated are honestly held, they are not guarantees and should not be relied on. Investec Asset Management in the normal course of its activities as an international investment manager may already hold or intend to purchase or sell the stocks mentioned on behalf of its clients. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This content may contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Actual results may differ materially from those stated herein.
All rights reserved. Issued by Investec Asset Management, July 2018.