PI Partnership – Newton Investment Management
The benefit is that this analysis has been carried out by respon- sible investment specialists, who have had a direct understand- ing of the issues and have been able to guide the investment teams. However, while such an approach has helped our indus- try analysts to capture relevant, material ESG issues, many longer-term sustainability considerations may not be financial- ly material over a typical investment horizon or singularly rele- vant to an investment case.
As we support the transition towards truly sustainable invest- ment opportunities, we believe that ESG-related risks, issues and opportunities must be integral to the investment decision, in addition to being part of the ‘mosaic’ of inputs captured dur- ing the research process.
In this context, our focus within the responsible investment team has been to hand over the direct responsibility for con- ducting ESG analysis to our industry analysts, and to help equip them with the skills to integrate that analysis to the high- est standard.
Working together
This evolved process is starting to support the vision of the ‘new’ economic model that we believe we need to work to. Our vision is one of true integration: active stewardship roles for the investment teams, which ensure their accountability and
ownership for the risks they buy on behalf of our clients. It’s a transformation that we believe needs to happen more widely in our industry. The evolution of roles is supported by a well-resourced central responsible investment team, whose task is to undertake spe- cialist research, in collaboration with the investment team, and provide support, where needed, on company engagements, as well as to develop tools and insights through ESG data. By creating a partnership between our investment and sustain- ability skillsets, we believe we can get the best of both worlds and build genuine thought leadership that should help us out- perform for our clients.
A great example of where this is needed more than ever is in the efforts around achieving net-zero carbon emissions. This is an issue that will never be solved solely by a single responsible investment team or by any industry in isolation. For the necessary transition that needs to happen around energy, or any other system, we must invest with a deep under- standing of the issues across our investment teams. This includes not only the way we build solutions, but also how we evaluate our integration processes. Ultimately, it’s about allocating to companies that we believe are best positioned to be truly sustainable, and which do their utmost to be leaders in their respective fields.
Important information This is a financial promotion. These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. This material is for professional investors only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell in- vestments in those securities, countries or sectors. Newton manages a variety of investment strategies. Whether and how ESG considerations are assessed or integrated into Newton’s strategies depends on the asset classes and/or the particular strategy involved, as well as the research and investment approach of each Newton firm. ESG may not be considered for each individual investment and, where ESG is considered, other attributes of an investment may outweigh ESG considerations when making in- vestment decisions. Issued by Newton Investment Management Ltd. ‘Newton’ and/or ‘Newton Investment Management’ is a corporate brand which refers to the following group of affiliated companies: Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA). NIMNA was established in 2021 and is comprised of the equity and multi-asset teams from an affiliate, Mellon Investments Corporation. In the United Kingdom, NIM is authorised and regulated by the Financial Conduct Authority (‘FCA’), 12 Endeavour Square, London, E20 1JN, in the conduct of investment business. Registered in England no. 1371973. NIM and NIMNA are both registered as investment advisors with the Securities & Exchange Commission (‘SEC’) to offer investment advisory services in the United States. NIM’s in- vestment business in the United States is described in Form ADV, Part 1 and 2, which can be obtained from the
SEC.gov website or obtained upon request. Both firms are indirect subsidiaries of The Bank of New York Mellon Corporation (‘BNY Mellon’).
October 2022 portfolio institutional roundtable: Responsible investing
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