Building a pathway towards a more Sustainable environmental, social & economic future with launch of new Australian Sustainable Equity strategy
As part of its continually evolving range of client-driven solutions, Martin Currie, the specialist active equity manager is proud to announce the launch of the Martin Currie Australia Sustainable Equity strategy.
The strategy is designed to provide higher returns than the index over the longer term, while considering and positively influencing the Sustainability practices of the companies it invests in.
Kimon Kouryialas, Co-Head of Global Distribution said:
“The development of this solution is a direct result of discussions and engagement with investors, who have told us that they increasingly want to align their investments with achieving a more Sustainable society, environment and economy, but also do not want to forfeit Financial returns.”
The Sustainable Equity strategy builds on Martin Currie Australia’s long-term experience in integrating ESG into Australian Equity portfolios, and combines its unique multi-lensed research process with portfolio construction that tilts towards companies that score highly on its proprietary Sustainability assessments.
The strategy will be managed by Portfolio Managers Will Baylis, Naomi Bant and Matt Lambert, drawing on fundamental analysis and stewardship activities of the 17-member Martin Currie Australia team.
Martin Currie believe that companies on a ‘Sustainability Pathway’ towards healthier outcomes for all stakeholders - such as employees, communities, customers and the broader society - will, in fact, prove to be more successful financially over time.
Importantly, Martin Currie highlights that Sustainability Equity is not an ‘SRI’ strategy with negative values screens, believing that simple screens can have limitations for benchmark-relative strategies.
Will Baylis, lead Portfolio Manager for the strategy said:
“We invest on the basis of a forward-looking evaluation of future returns, not on past performance. We believe that screens put undue precedence on the past activities of a company and penalise companies who are in fact moving in the right direction.”
As such, the strategy intentionally has limited exclusions1, and instead focuses on identifying and scoring companies that:
- provide more benefit vs. harm to society;
- have a management that focuses on their Sustainability risk; and
- have a clearly articulated pathway towards a Sustainable environmental, social & economic future.
Martin Currie also believe that they can positively influence a company’s Pathway to improve their Sustainability practices through Active Ownership, which is embedded in the investment process for all Martin Currie strategies.
Reece Birtles, Martin Currie Australia Chief Investment Officer said:
“Companies can be nudged in the right direction, and as a significant asset owner in Australia, Martin Currie can and do use our position to actively engage with company management and boards to influence positive change towards Sustainability.
Each year, the investment team conduct over 1,000 meetings with company management, and also their competitors, customers and suppliers, and this gives them an ability to influence corporate behaviour to change for the better.”
Poor Quality companies that cause net harm to society, or have business practices that have high Sustainability risk, will be penalized by Martin Currie Australia’s disciplined portfolio construction process for their fundamentals. This results in a larger investment universe with optimal expected return and risk characteristics relative to the benchmark.
The Sustainable Equity strategy will form part of Martin Currie’s A$9 billion in Australian equity assets under management. In total, Martin Currie manages over A$20 billion for clients worldwide (as at 31 March 2020).
1 Excludes unsustainable companies, defined as those involved in the production or distribution of cluster munitions, the manufacture of tobacco products and companies with child labour breaches