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Joseph Rowntree Charitable Trust

PRI reporting framework 2020

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Innovation

SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

1) For many years, with the help of EIRIS, we supplied our mainstream fund managers with a regularly updated list of companies which we regarded as acceptable for our portfolio.  However, we have now recognised the growing expertise in responsible investment within the investment industry and have decided that the most effective way to align our investments with our values is to look for fund managers that take a responsible and sustainable investment approach.

Therefore in 2013 we moved the management of our externally managed funds away from one mainstream fund manager, who relied on us to supply ethical screening, to a small number of new fund managers who regard themselves as ‘responsible investors’ and run sustainable funds. We are currently invested in seven funds run on a sustainable basis.

During the interview process we paid as much attention to the fund managers’ approach to ESG and stewardship in general as we did to their investment processes and performance.  It was not sufficient that they had signed up to the PRI and the FRC UK Stewardship Code and other, similar, initiatives – we also expected them to have a real understanding of ESG issues, including ESG integration, and to have a regular and productive discussions with us with the companies in which they invest. We also sought a willingness on their part to have an ongoing dialogue with us into the future and to follow up our specific concerns with investee companies.

This is not to say that we have delegated all our ethical oversight to our managers.  We continue to inform ourselves about ethical issues and still recognise our direct obligations as a responsible investor.

To date we have been very pleased with both the financial and ESG impact of the new strategy.

Once a year, we meet with our fund managers to explicitly focus on ESG matters. However, we also have an ongoing dialogue with our fund managers on responsible investment issues throughout the year.

2) In recent years we have had two ESG meetings where we have brought all our fund managers into the same room to discuss a certain topic. We have been encouraged by the willingness of our fund managers to exchange ideas and learn from each other and believe that this is a very helpful way of stimulating debate and encouraging collaborative action.


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