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The Scott Trust Limited (Guardian Media Group)

PRI reporting framework 2018

You are in Strategy and Governance » Objectives and strategies

Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

The Investment Committee reviews annually the progress made in respect of ESG integration and implementation of responsible investing in detail. However, beyond this formal review, more frequent reviews occur with respect to specific policy objectives, as needed, such as progress on fossil fuel divestment. For example, responsible investment objectives are an agenda item in quarterly IC meetings as well.

The Scott Trust (shareholder of GMG) also reviews the ESG progress and the GMG Board gets monthly updates on Responsible Investments (when appropriate).

SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          Clear communication of ESG activities to both investment staff and more widely within the organisation

Progress achieved

Improved monitoring on portfolio ESG characteristics has improved communication and transparency. Staff briefings on progress lead to communication of this work beyond the investment staff. A new endowment fund report during the period provided new levels of communication to stakeholders.

Key performance indicator

          Engage with external managers on ESG issues, change behaviour and drive innovation

Progress achieved

We have continued to engage with managers with a view to changing behaviour and driving innovation in the ESG space. For example, during this reporting period we:

  • Led an exercise which led to the creation of two new fossil fuel free hedge fund share classes
  • Supported and refined new innovative approaches to passive low carbon equity investing.
  • Acted as an early investor supporting a new clean energy global public equity thematic ESG fund.
  • Engaged with managers over voting and engagement reporting transparency
  • Improved visibility on the ESG and RI characteristics of the portfolio as below helps inform this activity.
          Implement fossil fuel divestment policy, reducing exposure to fossil fuels and add exposure to low carbon solutions

Key performance indicator

          Percentage exposure to fossil fuels is closely tracked and is expected to fall over the period.

Progress achieved

Further substantial reductions in fossil fuel exposure were achieved during the reporting period in keeping with the medium term plan. We made new fossil fuel free commitments to listed equity, private investments and hedge funds. Our key segregated fixed income fund is already divested. Specifically in public equity we funded a low carbon passive solution, and invested with a leading sustainable active manager showing leadership on ESG issues.

We also made progress on the objective to invest in proactive solutions to a low carbon economy, notably a new commitment to a thematic clean energy fund. We also tilted our low carbon passive towards companies with green revenues, doubling exposure here.

We continue to have dialogue with investment managers to change behaviour drive new product creation for sustainable investments promoting a low carbon economy. As an example, during the reporting period we gave feedback during the design phase for a new thematic clean climate change fund. Based on our engagement, the manager refined their clean energy investable universe and made the fossil fuel exclusion clearer and more transparent.

other description (2)

          Broaden the scope of proactive investments.

Key performance indicator

          Find positive impact investments beyond those aligning with low carbon economy that also meet financial objectives.

Progress achieved

We set new targets for proactive investment. We evaluated new managers. For example, this work during the reporting period let to a subsequent commitment to a venture fund looking to fund solutions for dementia. It also led to a commitment to a private infrastructure manager investing in a very broad range of sustainable infrastructure sectors which may lead to an equally broad range of positive environmental and social outcomes.

Financial performance of investments

ESG characteristics of investments

Key performance indicator

          We aim to increase the portion of the portfolio held by managers meaningfully integrating ESG and show higher ESG ratings.

Progress achieved

Analysis during the period included both manager level information (ESG and responsible investment policies etc.), and detailed analysis of the underlying holdings of our portfolio held via external managers - this latter work involved carbon emission footprinting and ESG ratings using 3rd party ESG analytical tools on all three pillars. This data showed continue progress, with these ratings reflecting the continued switch into strategies integrating ESG.

Other activities

Key performance indicator

          Support RI initiatives and proactively pursue UN PRI commitments

Progress achieved

We completed our first full reporting period as members and supporters of the work of ShareAction and Institutional Investors Group on Climate Change (IIGCC).

Key performance indicator

          Continue to use our unique journalism platform to promote various RI initiatives

Progress achieved

We continue to give exposure to key RI initiatives around ESG, fossil fuel divestment and investment transparency. Examples:

06.2. Additional information.