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Schroders

PRI reporting framework 2019

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (B) Implementation: Thematic

(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

We manage the following sustainability themed strategies: Global Climate Change, Global Sustainable Growth, Global Healthcare, QEP Global ESG, QEP Global ESG ex Fossil Fuels, European Sustainable Equity and Sustainable Multi Factor Equity.

Schroders' Global Climate Change strategy is an actively managed, thematic global equity strategy that seeks to invest in companies that are positively impacted, or likely to benefit, from efforts to mitigate or adapt to the impact of climate change. Stocks are researched and reviewed by the portfolio managers and two members of the Sustainable Investment team who are climate change specialists. The overarching principle is that climate change must have a significant positive impact on the long-term business outlook for a stock to be included. Importantly, the ESG specialists have a veto on whether the stock should be included in the universe. The strategy does not invest in companies which own fossil fuel reserves (e.g. oil, coal, gas, tar-sand, shale gas).

Schroders' Global Sustainable Growth strategy is an actively managed, global equity strategy investing in companies demonstrating positive sustainability characteristics, defined as those companies managing the business for the long-term, and recognising their responsibilities to a broad group of stakeholders. We believe that when aligned with strong underlying fundamentals, this can result in consistently stronger earnings growth which is often under appreciated by the market.

Schroders' Global Health Care strategy invests in healthcare, medical services and related products and companies on a worldwide basis. The investment approach is built on the insights gained from proprietary local research, combining top-down analysis of the four healthcare sub-sectors: pharmaceuticals, medical services, medical supplies/devices and biotechnology, with bottom-up stock research of companies within these sub-sectors. Four locally-based healthcare analysts examine companies on a stock-by-stock basis, and our capabilities mean that we are able to pick up on stocks which are off the radar screens of many other investors. These include medium size and smaller companies that have strong growth potential.

Schroders' QEP Global ESG invests in stocks on the basis of valuation and business quality to deliver higher returns across the market cycle. The fund has a number of social and environmental exclusions and also seeks to overweight companies that have a higher sustainability score. The QEP Investment team analyses a broad, global universe of over 5,500 ESG-rated stocks to build a highly diversified portfolio. The team currently has access to over 400 different data items which provide varied insights into ESG issues for companies globally.

Schroders’ QEP Global ESG ex Fossil Fuels leverages the same investment process as Schroders' QEP Global ESG, with additional, more stringent exclusions for fossil fuels.

Schroders’ European Sustainable Equity focuses on companies demonstrating positive sustainability characteristics, as measured by Schroders’ proprietary ESG analysis tool, CONTEXT.   The fund managers believe that companies demonstrating positive sustainability characteristics, such as managing the business for the long term, recognising its responsibilities  to its customers, employees, and suppliers, and respecting the environment, are better-placed to maintain their growth and returns over the long term.

Schroders’ Sustainable Multi Factor Equity is a systematic, benchmark-relative global equity strategy with a fully integrated approach to sustainable investing.  Sustainability is treated as a risk factor, using an innovative proprietary framework (SustainEx) to measure the environmental and social impact of companies, and is integrated into the multi-factor strategy alongside value, quality, momentum and low volatility. The strategy constrains carbon intensity to 50% of the benchmark (MSCI ACWI).


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