At EPFM, we have undertaken several measures to ensure our investments are positioned for Climate Change.
While we apply some negative screening and avoid investing in some sectors completely, we consider Climate Change in all investments.
Our in-house proprietary investment process, the EPORA (Ethical Partners Operational Risk Assessment), considers companies’ policies, procedures, practices, investments,reporting, trajectory and commitment to Climate Change. It considers the companies’ or sectors’ relevant material Climate Change issues, controversies,and positive actions that have been undertaken to address these, as well as any inconsistencies, concerns and red flags as regarding how a company is addressing Climate Change. Wehave had over 500 company meetings with senior management since the launch of the inception of EPASF in August 2018.
Engagement is undertaken by each analyst, supported by our Sustainability and Advocacy Manger, the Investment Director and the CEO, and includes engagement with sustainability teams, risk management, investor relations, CEOs, and Boards. It may involve site visits, meetings, or ESG advocacy activities like EPFM speaking with banking fossil fuel lending teams, advising agricultural companies’ sustainability teams about investor expectations, educating investor relations about client exclusions on their stock due to fossil fuel lobbying concerns, or advising health insurers on sector collaboration and down-stream emissions reporting expectations.
Full policy attached.
During December 2020 the Fund returned 2.11% versus the S&P/ASX 300 Accumulation Index of 1.32%, outperforming the market by 0.79% (after fees). Overweight positions in Renewable Energy and Transition Commodities and an underweight position in Healthcare contributed to relative performance while an overweight position in Food Products and an underweight position in Information Technology detracted from relative performance.
Ethical Partners has made a submission to to the inquiry on the Climate Change Bill. In our view it is clear that we desperately need whole of government support around the important elements of this bill.
Biodiversity is a very important area of engagement for us at EPFM, and an area of increasing interest for investors. Experts believe that we are in the midst of the Earth’s sixth mass extinction event -some 75 per cent of terrestrial and 66 per cent of marine environments have already been severely altered by human activity and one million species face extinction – many within decades.
During October 2020 the Fund returned 2.85% versus the S&P/ASX 300 Accumulation Index of 1.89%, outperforming the market by 0.96% (after fees). Overweight positions in Insurance stocks and an underweight position in Metals & Mining contributed to relative performance while overweight positions in Consumer Staples and Media & Entertainment detracted from relative performance.