IFA Magazine talks to Ama Seery, ESG Analyst, Janus Henderson Global Sustainable Equity Fund about the principles and practice of sustainable investing
IFAM: How important do you think sustainable investment strategies will be for investment funds going forward? Is this just the latest fad or is it set to become a core element of the investment selection process for fund managers and advisers alike?
AS: I will never say that responsible investing is a fad. Our fund is almost thirty years old so to us the approach is just good investment sense. Of course, we are very happy that more and more people are seeing that now and putting their money behind these strategies too.
Looking ahead, I think that more importance than ever before will be attached to sustainability, especially because the issues that this seeks to address are becoming more acute. On a regular basis we are seeing the impacts of climate change on our TV screens and in our lives. As this becomes more and more prevalent, investing sustainably is going to make more sense. It’s here to stay.
IFAM: What are the investment objectives of the GSE fund?
AS: Within the fund, we seek to try and address sustainable development as well as incorporating innovation and long-term compounding growth. Our aim is to invest in a way which allows sustainable development, promotes innovation and delivers healthy returns for our investors. The way we do this is we look to invest in companies which provide a positive impact for the environment and society whilst at the same time allowing us to stay on the right side of disruption. That means not investing in certain areas which we think will be disrupted in the future. We have a ‘do no harm’ mentality, and by this I mean that we don’t want to be invested in areas which harm the environment and society. Now, more than ever, we feel that this approach will provide our clients with consistent growth over the long-term. We can see this evidenced over the last ten years in our strategy as we have consistently outperformed our benchmark over that period.
IFAM: In your opinion, what makes the fund different? What do advisers need to know about the fund when doing their investment research?
AS: One of the biggest things which makes us different is our longevity in this space.
This is not a fad. We are not jumping on any bandwagons. We’ve been doing this for almost 30 years and as a result it has informed our investment process. When we started investing sustainably back in 1991, this was only a few years after the Brundtland Report. This report was created by a UN Commission back in 1987 and describes sustainable development as meeting the needs of the present without compromising future generations ability to meet their own needs. This is the most widely used definition of sustainable development. Our entire investment philosophy is based on this foundation. Over the years we’ve added to our philosophy with all the additional refinements of this definition. This includes what is known as the triple bottom line – sometimes called the 3Ps – people, planet, profit. It can also be expressed as environment, society and economics. The triple bottom line informs our investment process which has environmental and social impact themes as well as having environmental and social avoidance criteria. We’ve also gone on to include another refinement which results from the UN Sustainable Development Goals (SDGs), particularly with regards to enhancing our reporting. We produce an annual sustainability report in which we are able to show the portfolio’s contribution to the UN SDGs not in a traditional mapping sense but showing the actual percentage contribution to each goal. I think that this is a key differentiator for us and our fund.
Continue reading article…