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Investing to
improve lives

The Stewardship Annual Report 2021 highlights the results of our sustained commitment to the development of productive ESG engagements embedded in our investment process.

Stewardship Annual Report 2021
Date published
31 Mar 2021

Report Summary

Highlights in 2020

  • Mapping of companies to the UN Sustainable Development Goals.
  • The launch of the Australia Sustainability Equity strategy.
  • The establishment of Carbon Value-at-Risk modelling.
  • Development of modern slavery analysis through our ESG working group.
  • Becoming a signatory to Climate Action 100+ as lead investor on an Indian cement company.

Download full report


# companies engaged
with (private)*

# structured engagement
programs commenced


shareholder meetings


Active participants in collaborative engagement initiatives

Climate Action 100
Climate Action 100


Water risk

*Source: Martin Currie. Engagement activity is for the period 1 January 2020 – 31 December 2020.
PRI – Principles for Responsible Investment. Engagement and voting activity is for the period 1 January 2019 to 31 December 2019.

At Martin Currie, we have been leading in sustainable long-term investing now for many years and we continue to invest significant resources in maintaining that leadership and delivering outstanding and sustainable outcomes for our clients.


Neil Gaskell

Neil Gaskell
Former Chairman of Martin Currie
Global Portfolio Trust

There is now a gathering momentum behind the asset management industry’s view that good stewardship is an integral part of its core purpose. Active engagement with companies to understand, in depth, their responses to Environmental, Social and Governance (ESG) issues, is no longer a ‘bolt on’ to investment performance. The focus on stewardship not only strengthens the sustainability of good investment performance, it encourages improved long-term ESG behaviours from investee companies within the wider context of contributing to the UN Sustainable Development Goals (SDGs).

During my nine-year tenure as Chairman of the Martin Currie Global Portfolio Trust, Martin Currie has developed its dynamic approach to active ESG-related engagement across its investment portfolios. Martin Currie has played a leading role, in my view, towards positive stewardship and a more sustainable investment environment. The 2021 Annual Stewardship Report highlights some of the results of this sustained commitment to the development of productive ESG engagements embedded in the investment process.

2020 was undoubtedly a year of social and economic disruption caused by the COVID-19 pandemic, and 2021 will focus attention on climate change in the run up to COP26 in Glasgow. However, alongside climate change, there is an emerging emphasis on social issues such as modern slavery, workforce diversity and health. I am delighted that Martin Currie is committed to staying at the forefront of the asset management industry in its stewardship behaviours as this year’s Stewardship Report demonstrates.


Investing to improve lives

Our mission of ‘Investing to Improve Lives’ is what guides us, drives us and defines us. It is the purpose behind everything we do. Whether as stewards of our clients’ capital, as investors in equity markets or as members of our local and global communities, we never forget the responsibilities our work brings.

Creating long-term value

Investing to create long-term, sustainable value is at the heart of our business. We believe in looking beyond the numbers, understanding that the investments we make and the returns we deliver have more than just a financial impact.

By doing so, we not only help fulfil the real-life ambitions of our clients, but align with companies that over the long-term will contribute to a more sustainable economy, society and environment.

Investing to create long-term, sustainable value is at the heart of our business.

Beyond the balance sheet

As investors, we believe financial returns and environmental, social and governance (ESG) factors are fundamentally intertwined.

ESG analysis is therefore fully embedded in our investment processes, allowing us to meaningfully improve our understanding of investee companies, their material risks and their opportunities.

More than a business

We understand that our business is bigger than its sum of parts and that its influence reaches many stakeholders.

It is why we hold ourselves to the same exacting standards that we expect of others: from fostering a diverse and inclusive workplace, being trusted advisors to our clients, and positively contributing to where we live and work.


Investing to create long-term, sustainable value is at the heart of our business.

Stewardship year in review

David Sheasby

David Sheasby
Head of Stewardship and ESG

A Green awakening

Inevitably, COVID-19 dominated most of the headlines in 2020. However, viewed through a longer-term lens, the year was perhaps more significant for the growing consciousness and action on environmental issues globally. An increasing number of countries committed to reaching net zero emissions, including the UK, China, Japan and South Korea. Meanwhile, the European Union set out its ambitions to become the first climate-neutral continent by 2050 unveiling its Green Deal – a €750 billion ‘green’ stimulus package. Likewise, 2020 saw a huge rise in the numbers of companies announcing carbon neutrality targets. These ranged from small and medium-sized enterprises to major multinationals across a multitude of sectors, including Microsoft, Apple, Ford, Inditex, BP and American Airlines.

Pandemic impacts

The ‘social’ aspect of ESG is often in the shadows of environment and governance, but the COVID-19 crisis brought it very much to the fore. Companies had to adapt very quickly to navigate near-term challenges presented by the crisis, with decisions taken on human capital, customers, suppliers and the communities in which they operate in. Corporate reactions to the crisis were, on balance, generally positive and we witnessed a wide range of short-term measures announced by companies to support various stakeholder groups. Capital allocation considerations (specifically, capital structure and share repurchases, dividends, remuneration, and capital raising and shareholder rights) also gained increased relevance during the crisis, with a heighted need for good corporate governance to enhance long-term financial stability and value creation.

New regulations

Although it may have gone under the radar for many investors, 2020 was actually a very significant period for policy development, with over 130 new policies and revisions recorded by the PRI in its regulation database. The EU led the pack: key regulations included the EU Taxonomy on mitigation and adaptation and the Sustainable Finance Disclosure Regulation (SFDR). In Asia, progress on financial policy reforms and net zero goals has built on the existing dialogue on green finance.

The focus on climate in the region has also increased, with Singapore preparing guidelines on environmental risk management, and the Hong Kong’s Securities & Futures Commission (SFC) consulting on new regulation for the management and disclosure of climate-related risks by fund managers. Stewardship also gained momentum in the region, with India’s first stewardship code (which is mandatory for all investment managers in the Indian market) coming into force during the year.

Martin Currie 2020: Development and progress
  • Continued refinement of proprietary ESG scoring.
  • Mapping of companies to the UN Sustainable Development Goals.
  • The launch of the Australia Sustainability Equity strategy.
  • The establishment of Carbon Value-at-Risk modelling.
  • Ensuring all EU-domiciled funds are consistent with the requirements of ‘Article 8’ as part of the EU Sustainable Finance Disclosure Regulation.
  • Development of modern slavery analysis through the ESG working group.
  • Commencement of an in-depth engagement on cyber security.
  • Becoming a signatory to Climate Action 100+ as lead investor on an Indian cement company.
  • The launch of a new ESG reporting publication ‘Stewardship Matters’.
  • Publication of over 20 stewardship thought leadership pieces.


ESG - An integral element of Stewardship

What is it?

ESG refers to a set of factors that may impact the ability of companies to generate sustainable returns over the long term. It involves understanding the governance structures and culture of a company (and its broader social and environmental impacts), employing a broad view of changes taking place in the world and assessing the effect these can have on a company’s cash flows, balance sheet, reputation and, ultimately, corporate value.

Why do we do it?

Stewardship is increasingly important for our clients and we engage with them to understand their needs and to ensure that we report our activities (on their behalf) effectively to them. As stewards of our clients’ capital we take a holistic view of investee companies, looking at all material information, whether quantitative or qualitative. There is compelling evidence that ESG factors influence returns over the long term, and therefore have to be incorporated by fiduciaries when assessing risks and opportunities. We leverage both our own analysis and that of external data providers.

How do we do it?

As bottom-up investors, our process starts at the company level. Once an idea has been identified, we subject it to rigorous fundamental analysis and peer review to decide whether it merits inclusion in our high-conviction portfolios. ESG analysis is embedded in this assessment, influencing key assumptions such as the cost of capital, revenues or costs and thus our estimate of a company’s intrinsic value. Our starting point is governance which stems from the belief that this is a fundamental determinant of long-term performance. Problems here are more often than not reflected in a company’s environmental and social track record, making it a reliable proxy for wider sustainability. In broad terms, we divide our process into three categories: identification, integration and active ownership. Responsibility for this work lies with the portfolio managers and analysts – the people who know the companies best. This way we can achieve true integration.

Our process and the relationships with external data providers is overseen and managed by the Head of Stewardship and ESG, who is independent of the investment teams and is responsible for oversight of the overall approach as well as the reporting on our stewardship activities, including engagement and active ownership. With a background in investment, the Head of Stewardship and ESG is able to provide informed oversight and assurance of how activities are undertaken and reported.

There is compelling evidence that ESG factors influence returns over the long term, and therefore have to be incorporated by fiduciaries when assessing risks and opportunities.

Climate change engagement

How TCFD reporting provides a vital framework for dialogue

Our commitment to TCFD

We believe the Task Force on Climate-Related Financial Disclosures (TCFD) reporting framework is a vitally important tool to understand how companies are managing climate-related risks. It is designed to enable decision-useful disclosure of information on climate-related risks and opportunities for better integration of the financial impacts of climate change into the investment process. Reflecting this we are public supporters of TCFD and have joined CA100+, where one of the objectives is to encourage disclosure using the TCFD framework.

This will become a fundamental part of the way engage with companies, shaping our dialogue on climate change around the four key areas of
disclosure as recommended by the TCFD:

Governance 1. Governance

‘Disclose the organization’s governance around climate-related risks and opportunities’.

Our overall approach is overseen by the Head of Stewardship and ESG and co-ordinated through our ESG Working Group. Climate change forms part of our assessment of the material risks and opportunities that companies face in generating sustainable returns over the long term and as such is embedded into our investment process. Our sustainability and ESG-related work is fully integrated into our investment process, considering factors including climate change when analysing the investment case for a company. All stock research is required to consider the material and relevant ESG factors that could impact the ability of the company to generate sustainable returns.

2. Strategy


‘Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material’.

We have worked extensively over the course of the last year to produce an assessment of the Carbon Value-at-Risk for each of the companies that we invest in as well as overall portfolios. This has been a collaboration between the investment teams to share ideas and best practice as this has evolved. In addition, we produce a carbon footprint for portfolios, looking at both overall emissions as well as carbon intensity, which identifies the overall profile and main contributors to a portfolio’s carbon footprint. With an increasing number of companies announcing net zero ambitions, we are also looking at the substance behind these ambitions and the extent to which companies are setting out science-based targets. Tools such as the Transition Pathway Initiative (TPI) also help identify the degree to which companies held are aligned with the transition to a lower-carbon economy. We continue to explore tools to help us with broader scenario testing including the PRI’s Inevitable Policy Response (IPR) framework.

3. Risk Management

Risk Management

'Disclose how the organisation identifies, assesses, and manages climate-related risks’.

As active owners we look for companies to identify, manage and disclose material risks and opportunities. We have begun the process of more formally incorporating climate risk into our investment risk framework. We use both company disclosed and estimated data to help us identify and manage climate-related risks. This includes carbon footprint and weighted average carbon intensity as well as the work that we have been doing on Carbon Value-at-Risk which looks across the company value chain. We believe that the TCFD framework is a robust framework for disclosure of climate-related risks and opportunities and, as such, we encourage companies to adopt this approach. We have engaged with a number of companies over the last year to encourage them to use this framework and we have joined Climate Action 100+ as the lead investor on one of the target companies.

4. Metrics & Targets


‘Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material’.

For most of our portfolios we produce a carbon footprint each month looking at the carbon emissions based on Scope 1 and 2 emissions, and the intensity of emissions, including the weighted average carbon intensity, relative to its benchmark. In addition, we look at Carbon Value-at-Risk. For some clients, a more detailed report is produced looking at the individual company contributions by scope and for those clients based in France a report compliant with Article 173 is produced.

One of the areas of focus for us is how companies are approaching climate change: the commitments that they are making – for example, net zero; and what scenarios and modeling they are carrying out. We recognise that there is not one set transition pathway, but we encourage companies to adopt science-based targets and provide sufficient disclosure for investors to make informed decisions. Initiatives such as the Net-Zero Asset Managers Alliance and the Net-Zero Asset Owner Alliance are set to drive increased transparency and frame some of the guidance around metrics and disclosures. As the scenarios and transition pathways develop and become more established, we are likely to increasingly use these.


Regulatory information and risk warnings

This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’), authorised and regulated by the Financial Conduct Authority. It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.

The information contained in this document has been compiled with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this document for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.

The document does not form the basis of, nor should it be relied upon in connection with, any subsequent contract or agreement. It does not constitute, and may not be used for the purpose of, an offer or invitation to subscribe for or otherwise acquire shares in any of the products mentioned.

Past performance is not a guide to future returns.

The views expressed are opinions of the portfolio managers as of the date of this document and are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.

Please note the information within this report has been produced internally using unaudited data and has not been independently verified. Whilst every effort has been made to ensure its accuracy, no guarantee can be given.

The analysis of Environmental, Social and Governance (ESG) factors forms an important part of the investment process and helps inform investment decisions. The strategy/ies do not necessarily target particular sustainability outcomes.

The information provided should not be considered a recommendation to purchase a particular strategy/fund or sell any particular security. It should not be assumed that any of the securities discussed here were or will prove to be profitable.