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Liontrust Investment Partners LLP

PRI reporting framework 2019

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(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]

The Sustainable team have identified 20 areas of long-term growth within our economies that fall under three trends identified as: Better resource efficiency, Improved health, and Greater safety and resilience, with a number of underlying themes as outlined below. They team  believe that companies exposed to these themes are likely to see stronger and more persistent growth than those that are not, allowing the team to find growth even in an era of low economic growth.

Better resource efficiency

Improving the efficiency of energy use; improving the management of water; increasing electricity generation from renewable sources; improving industrial and agricultural processes; increasing waste treatment and recycling; making transportation more efficient.

Improved health

Providing affordable healthcare globally; connecting people; delivering healthier foods; building better cities; providing education; enabling innovation in healthcare; enabling healthier lifestyles.

Greater safety and resilience

Increasing financial resilience; saving for the future; insuring a sustainable economy; leading ESG management; improving auto safety; enhancing digital security; better monitoring of supply chains and quality control.

The team have done some work to show how their positive investment themes are aligned with the SDGs by analysing where each theme is directly linked to Key Performance Indicators in the SDG text. Each of their themes are limited to one main SDG, although in reality there are overlaps and most companies are exposed to more than one goal. An article showing which of their themes are aligned to which SDG, along with which specific Key Performance Indicator they improve, is available at https://www.liontrust.co.uk/what-we-think/blogs/how-the-sustainable-future-funds-are-aligned-with-the-sustainable-development; the updated version represents 2018 https://www.liontrust.co.uk/what-we-think/blogs/Mike-Appleby-Aligning-our-funds-with-the-UN-Sustainable-Development-Goals .

All 20 of the Sustainable Future investment themes are contributing in a positive manner to the SDGs as they can be linked to Key Performance Indicators in the text. As a reminder, their  positive investment themes are at the core of Sustainable investment process (it is where the team get their investment ideas) and are a key component in the investment decision, the others being quality of management, business fundamentals (essentially the investment returns the business can make) and valuation.

The Sustainable Development Goals where the Sustainable funds have largest exposure are:

Good health and well-being (SDG #3)
Affordable and clean energy (SDG #7)
Decent work and economic growth (SDG #8)
Industry, innovation and infrastructure (SDG #9)
Responsible consumption and production (SDG #12)

In addition to these, the team also have exposure to: Quality education (SDG #4), Clean water and sanitation (SDG #6), and Sustainable cities and communities (SDG #11).

 


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