Edinburgh, Scotland, 16th May 2023 – Martin Currie, the active equity specialist and steward of US$20.8 billion in assets under management (AUM) as of 31 December 2022, released its annual stewardship report, titled Moving Beyond ESG. It details Martin Currie’s responsible allocation, management and oversight of investor capital to create long-term value. Martin Currie is a specialist investment manager of Franklin Templeton, one of the world’s largest asset management firms.
“Martin Currie has considered environmental, social and governance (ESG) factors in our investment process for many years because we believe a focus on the long term – in equity investing, as well as our stewardship and sustainability activities – is the best approach to fulfill the ambitions of our clients,” said Julian Ide, Martin Currie CEO. “But as the market continues to evolve, we are moving beyond the constructs of ESG and toward stewardship, sustainability and impact. In progressing our thinking around ESG, we will continue to align our business with companies that will contribute to a more sustainable economy, society and environment.”
The firm’s focus on the long term helps deliver returns that satisfy its clients’ expectations. The average tenure of Martin Currie’s client base is seven years, and 90% of the firm’s AUM and 76% of its portfolios have outperformed their benchmark over a 10-year period.
“As science and society address a growing range of issues that pose both risk and opportunity to investors, sustainable investment has become a significant trend in financial markets. And up to this point, much of the focus has only been on ESG,” said Anne Simpson, Global Head of Sustainability at Franklin Templeton. “ESG has always been an imperfect acronym to reflect sustainable investment because it lacks an ‘F’ for finance or fiduciary. Given Martin Currie’s long history and clear focus on stewardship and sustainable investing, it is fitting that they are at heart of driving forward the conversation of rethinking the acronym ESG.”
Martin Currie’s detailed its 2022 stewardship activities in its report, including:
Establishment of Stewardship, Sustainability and Impact (SSI) team
In 2022, Martin Currie developed a new Stewardship, Sustainability and Impact (SSI) team, led by David Sheasby, who serves in dual roles as Martin Currie’s Head of Stewardship, Sustainability and Impact and Franklin Templeton’s Stewardship and Sustainability Council co-chair.
“We think it’s time to bring the focus back to long-term value creation and our duty as fiduciaries to our clients. We are using the core elements of ESG – stewardship, sustainability and impact – to do better investment analysis, support our clients’ interests and contribute to solving real-world challenges,” said Sheasby. “Our new SSI team will also address the growing prominence of impact investing, as many investors focus on the intentionality of their investments and seek to generate positive impact alongside financial returns.”
The SSI team advises Martin Currie’s investment teams on the incorporation of responsible investment into its analysis process and provides best practices on stewardship. In addition to Sheasby, the team includes portfolio manager Lauran Halpin, SSI specialist and portfolio manager John Gilmore, and SSI investment analyst Eoghan McGrath.
Proxy Voting and Engagement In 2022, Martin Currie voted on 6,108 resolutions across 549 shareholder meetings in 36 different markets. The firm also recorded 591 total engagements with 405 companies in 31 markets, with climate change as the top engagement topic with companies.
In addition to its individual engagement activities, Martin Currie increased the breadth of its engagements by joining two new collaborative engagement platforms as a lead investor: the United Nations-supported Principles for Responsible Investment’s (UN PRI) Advance initiative and CDP’s Non-Disclosure Campaign. (CDP was originally known as the Carbon Disclosure Project.)
Advance is aimed at addressing human rights issues with a particular focus on the mining industry. CDP’s Non-Disclosure Campaign allows CDP signatories to directly engage with companies that have failed to respond to the CDP’s climate change, forests or water security questionnaire. These new collaborative engagements are in addition to the firm’s ongoing work with Climate Action 100+.
Martin Currie used proxy voting as a tool to escalate engagement on important issues and voted on 363 resolutions against management. The highest proportion of votes against management were on director or remuneration-related topics.
Net Zero Emissions Alignment
Martin Currie became a signatory to the Net Zero Asset Managers Initiative (NZAMI) in July 2021. In July 2022, the firm submitted its initial commitment to align 15.4% of the firm’s AUM with NZAMI’s goal of net zero greenhouse gas emissions by 2050. The firm later strengthened its commitment in October 2022 to 18.9% of its AUM.
Martin Currie will continue to work with its investment teams and collaborate with clients to increase its net zero commitment to 100% of AUM by 2040. In addition to future commitments, the firm offset 200% of its corporate emissions in 2022 and aims to reduce its emissions intensity by 50% by 2030.
Improved Diversity
Since establishing diversity targets in April 2021, Martin Currie has made progress in increasing representation across many areas of the business. Gender diversity increased from 16% to 26% since April 2021, with increased female representation on both the Executive and Distribution teams. The full annual stewardship report can be found here.
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.
The analysis of Environmental, Social and Governance (ESG) factors forms an important part of the investment process and helps inform investment decisions. The strategies do not necessarily target particular sustainability outcomes.