This report shows public data only. Is this your organisation? If so, login here to view your full report.

Jupiter Asset Management

PRI reporting framework 2020

Export Public Responses
Pdf-img

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Jupiter is an active asset management firm and our purpose is to help clients meet their long-term savings needs.  We believe in active fund management, putting performance at the heart of our clients’ portfolios though a commitment to investor excellence. As an active fund manager, Jupiter seeks to deliver investment outperformance after fees over the long term, without exposing clients to unnecessary risk. Stewardship is an important factor which underpins both this objective and our commitment to investor excellence. 

Our primary responsibility is to our clients who entrust their savings to our management. We aim to make a positive contribution to society as managers of other people's money. We seek to do so by aiming to increase the value of our clients' savings, and the way we serve clients

Our managers do not track an index, they actively seek out what they believe to be the best investment opportunities through carefully selected stock picking. Our investment culture is built on allowing talented fund managers the freedom and responsibility to pursue their own, clearly defined investment approach and philosophy.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Our motivations for pursuing a responsible investment policy are at one with our objective of seeking long-term returns for clients. Materiality around governance issues and matters which may affect the sustainability of a company’s business model is of paramount importance. We recognise and respect the expectations placed upon us to be willing and able to hold companies to account. However, our main aim is to build and strengthen relationships with companies. Board-level engagement can be a useful way to develop investment insights and to understand the psychology of a company’s leadership.

As signatories we have a shared common purpose in promoting sustainable capital markets and the ability to work collectively on systemic risks.  During the period we participated in the consultation for the 2020 UK Stewardship Code. This involved dialogue with our trade body, The Investment Association, and outreach with the Financial Reporting Council.  We supported various proposals around the 2020 Code including i) application across asset classes; ii) linking stewardship to organisational strategy / purpose; and, iii) having explicit reference to ESG within the Code. During the period we also became members of the Institutional Investors Group on Climate Change (IIGCC). The IIGCC has been an effective platform for Jupiter to work with other investors to engage with companies on the climate agenda and refine investor practices.

Upholding values and improving compliance with codes and international practice is another motivation for pursuing our RI policy.  As active owners, the pathway to best practice is a recurring theme in our engagement. We always review matters from the stance of representing our clients’ interests and do adopt an adversarial approach to these conversations. Through dialogue we impart our expectations to companies and underline why these matters are mutually beneficial in terms of shareholder and stakeholder alignment. We have faced some intensive situations in emerging markets (EM) where we think the underlying ESG issues could’ve been improved by adopting best practice. In these scenarios, we will engage extensively and where necessary engage with other holders, proxy advisors and regulators to escalate the agenda. We  experienced various cases in emerging markets where improper disclosure around related party transactions and succession processes have hampered companies and their shareholders. We have taken measured and progressive steps to escalate,call for reform and apply global standards to these considerations. This included engagement with the Indian Regulators and Stock Exchange.

We view promoting public policy change as an important responsibility. We participate in industry consultations and outreach from policy makers. We take decisions on a case by case basis and value the opportunity to contribute to use our active market experience in this regard. Any decision to pursue this course of action is judged on whether it is in the interest of our clients. During the period we have engaged with the Japan FSA, MOF and METI regarding Foreign Exchange and Foreign Trade Act changes.

The scope of our policy applies to our various asset classes: equity, fixed income and fund of funds. Our Stewardship Policy (incorporating proxy voting, governance and sustainability) is approved by the CIO on an annual basis. Jupiter’s UK Stewardship Code disclosure is approved by the Board and this is also done annually. We have not encountered any significant exceptions to the policy for the period under review.

The details below help summarise how the policy implemented:

ROBUST CULTURE & ACCOUNTABILITY: Our fund managers are involved in voting decisions and engaging with companies which includes specific stewardship focussed sessions with non-executive / independent directors across geographies. This approach has been in place for over a decade and has raised awareness of stewardship issues across our firm. This engagement experience has also contributed to the development of our managers and wider investment personnel.

Our fund managers are supported by Jupiter’s Governance & Sustainability Team who assist with voting and engagement on stewardship.

Stewardship features within the formal objectives of our investment personnel (fund managers and assistants; equity / credit analysts and product specialists). The objectives are based around the articulation of a fund manager’s own stewardship priorities and the CIO Office’s role is to monitor, review and assist our investment personnel on these matters.

This does not detract from the concept of fund management freedom - it is additional support to help ensure that there is a consistent approach across different asset classes and our organisation. The CIO’s office has invested in third-party ESG risk data and additional ESG headcount to help fund managers with their voting and engagement considerations. 

INTERNAL GOVERNANCE: Our fund management department has established a Stewardship Committee chaired by the CIO. The Committee provides a platform to coordinate and review engagement across asset classes in which Jupiter invests and to debate whether we are receiving the desired response from companies. The Committee also considers the external ESG landscape and industry and public policy matters. Other members include the Head of Governance & Sustainability, fund manager representatives from equity, fixed income and fund of fund asset classes and governance and sustainability specialists. The Vice Chairman of Jupiter Fund Management plc (JFM) is also a member of Stewardship Committee and this strengthens the alignment and information flows around stewardship to the Board.

The Executive Committee of JFM plc has also established a Corporate Social Responsibility (CSR) Committee. This Committee focuses on the wider CSR responsibilities of JFM plc (e.g. charitable giving, employee satisfaction, health & safety) and does not have authority over the actions of the Stewardship Committee. Nevertheless, information from the Stewardship Committee is relayed to the CSR Committee. We think this is valuable because stewardship activities are an important part of JFM's wider business purpose. In addition, this information helps to educate and inform senior management, thereby helping to further ingrain and support stewardship culture and awareness across our firm. The CSR Committee contains representatives of JFM's Executive Committee and the Head of Governance & Sustainability.

Our publicly available policy outlines prominent ESG themes in our voting and engagement activity. This is based on materiality, client feedback and investor experience.

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

Within our annual CDP Climate Change response, which can be found on the CDP website (www.cdp.net), we provide details on our substantive regulatory, physical and reputational risks and opportunities relating to climate change. We have reviewed our approach to this process and identified four risks and four opportunities related to climate change which are deemed most material to our corporate strategy. These are summarized as follows:

Risks:

1.            Transition risks at a corporate level relating to the potential costs of current climate-related regulation.

2.            Transition risks at a corporate level relating to the potential costs of future climate-related regulation.

3.            Physical risks which could affect companies held in our portfolios.

4.            Transition risks which could affect companies held in our portfolios.

Opportunities:

1.            Shifts in consumer preferences which may increase client demand for our environmental and sustainable equities strategies.

2.            Shifts in consumer preferences which may increase client demand for our environmental and sustainable fixed income strategies.

3.            Investment opportunities in companies which appropriately manage the transition to a net zero economy.

4.            Investment opportunities in companies that may stand to directly benefit from the energy transition, such as renewable energy producers. 

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

Risks:

1.            0-3 years

2.            0-3 years

3.            5+ years

4.            5+ years

Opportunities:

1.            5+ years

2.            5+ years

3.            5+ years

4.            0-3 years

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

Jupiter is not a significant producer of GHG emissions, and we consider our direct climate-related risk to be limited. The key aspects of climate change that have influenced the business strategy are climate change opportunities/risks associated with the assets we manage. By appropriately considering ESG risk factors including those arising from climate change, we believe our fund managers may be able to select companies which stand to benefit from the transition to a sustainable economy, while avoiding investments in companies unable to adapt to the energy transition, as well as exercising investor stewardship to enhance the management of climate risk by companies whose business models may be adversely affected.

Our Stewardship Committee receives information on the environmental, social and governance risks impacting our portfolios, with a view to understanding the voting and engagement activities around these matters. The CSR Committee, reporting to the Executive Committee, oversees the Company’s direct social responsibility initiatives, including climate risk.

We monitor climate change risks and opportunities in our funds’ investments by hosting or attending meetings with management teams and non-executive directors to question and challenge companies about the issues we think may affect their long-term value. Our GS Team helps identify relevant ESG factors that might affect the business performance of investee companies. To strengthen Jupiter’s capabilities, the CIO Office has invested in third-party ESG risk data and additional ESG personnel to help fund managers identify material environmental risks and opportunities affecting their portfolios. The CIO plays an oversight role in assessing stewardship objectives and monitors, reviews and assists our investment personnel in meeting them.

We are open to collective engagement and industry collaboration on climate change. In February 2019 we joined the Institutional Investors Group on Climate Change ('IIGCC'). The IIGCC is a collective body through which European institutional investors and asset owners coordinate initiatives to tackle climate change. This coordinating role primarily encompasses direct engagement with companies, but also facilitates industry dialogue on climate change and supports the implementation of related best practice. In 2019 Jupiter became a member of Climate Action 100+, an investor initiative which seeks to target collective action around a selection of the world’s highest emitting companies and coordinate shareholder engagement with this subset. Joining Climate Action 100+ allows us to play a lead role in collective engagements on climate with investee companies.

We have a formal framework for risk management, which is designed to identify and quantify all risks to our business including climate-related risks. We have been developing detailed climate impact reports for certain equity and fixed income portfolios, representing approximately 20% of our assets under management as at September 2019. These fund-level reports, issued to clients, focus on the GHG emissions attributable to the underlying portfolio companies, portfolio alignment with current climate goals, and a review of other portfolio level environmental risks. We continue to work alongside our industry partners to encourage TCFD adoption and develop reporting techniques capturing transition risks and opportunities more broadly. 

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

specify

          TCFD activity also appears in our public engagment report.
        

SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

Attachment


02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

We develop, refine and evolve our stewardship policy by learning from investor experience, best practice provisions and by engaging with clients and investor bodies and organisations including the PRI. Over time this has shaped our policies and the above elements have been considered, absorbed and acted upon.


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

In accordance with FCA requirements, Jupiter is required to establish, implement and maintain an effective Conflicts of Interest Policy that is appropriate to Jupiter’s size and organisation and the nature, scale and complexity of its business. We also refer to these matters publicly through our UK Stewardship Code disclosures.

Jupiter’s independent status is helpful in narrowing the scope of how conflicts may arise i.e. we are not part of a larger (listed) financial services group. Our funds do not hold Jupiter Fund Management plc shares.

Conflicts may arise when clients are also companies in which Jupiter invests. We have implemented a process where our GS Team monitor the corporate pension fund client data from our Institutional business department and cross reference this with upcoming shareholder / bondholder meetings and company engagement. In these circumstances, contentious issues are discussed with the relevant fund managers and the CIO and there will be close engagement with the company. In this instance, we will vote in the best interests of the funds / clients who hold shares in the company, using the principles of Treating Customers Fairly (TCF). Where applicable, we will obtain advance approval from the client prior to voting.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

There are various levels of activity which should be viewed in aggregate when we consider protection of client interests and identifying incidents at investee companies. Firstly, we highlight the regulatory and internal compliance procedures that provide the overarching protective framework. Our CIO Office, investment risk and compliance teams proactively monitor these regulatory provisions to protect our clients. This includes covering elements like liquidity, risk, positioning and positioning sizing. As a result of this oversight, fund managers will have to obtain permissions before conducting trading activity in certain scenarios. This is managed by the i) CIO Office (in terms of investment rationale), ii) Investment Risk (to examine liquidity profile) and iii) Compliance (to ensure there are no breaches).

In terms of day to day monitoring of incidents, we provide the following summary:

1.Individual investment strategies are charged with the daily monitoring of portfolio companies and this includes assessing news flows, company announcements, director changes and engaging with both management and independent directors.  

2. The daily monitoring undertaken by investment teams includes issues concerning regulatory breaches, health and safety incidents and bribery scandals within our investee companies. This approach is augmented with input from the GS Team. The team use third party data to systematically monitor ESG and business conduct issues and international standards across all of our portfolios. We use the services of Reprisk to monitor these alerts. As well as individual strategies having access to the tool, Jupiter's Investment Projects and Data Science team receive Reprisk data feeds across all of our portfolios. The individual fund managers have accountability for their own securities but the added involvement from our Technology and GS Team help provide group-wide monitoring in a systematic and agile manner. Furthermore, Reprisk does not distinguish between unlisted or listed companies or developed and undeveloped markets; its intelligence gathering is built around media sources rather than listing considerations. This helps with our fixed income and emerging market monitoring as well. We also compliment this scrutiny by procuring third party ESG risk data from Sustainalytics. Once again the data is directed through our Technology Department so it can be assessed and disseminated as quickly as possible. Key points from these observations are also collated and will be presented to our Stewardship Committee to scrutinise the fund manager's / GS Team's actions on these issues. The CIO's Office will also receive this information which will form part of their discussions with individual investment strategies.

The fund managers and / or the GS Team will seek to engage with companies should monitoring under pathways 1 or 2 reflect concerns that are deemed material to: i) the mis-treatment of customers, communities and employees at our investee companies, ii) health and safety breaches and regulatory / legal affairs, iii) company reputation and iv) if the situation is counter to the policies or values of our clients and Jupiter.

We will seek to engage with the company and its representatives should this situation occur, and this includes dialogue with board members. It should be noted that situations are judged on a case by case basis and it is not uncommon for these situations to be complex and protracted over many months (if not years), especially if legal proceedings are involved. The process may entail dialogue with other shareholders but we would seek advice from our internal compliance and legal teams before proceeding.

Our investment personnel and GS Team receive regular compliance training with respect to market abuse regulations and best practice approaches. Our internal protocol is to remain outsiders unless the fund manager considers there to be merit in knowing this information. Should we become insiders, then the standard internal procedures are triggered to guard against any conflicts of interest.

We would disclose dialogue with companies in relation to these specific issues within our bespoke client reports. Where relevant we will also publicly disclose our engagement on these company-specific issues.

The fund manager will continue to have accountability for trading decisions for the particular security.

3. Our Investment Risk and Performance Attribution team conduct quarterly 'Challenge Meetings' with fund management teams, this is based on an internal assessment risking risk and regulatory parameters but it also brings forth scrutiny on investee company performance, incidents and fund manager actions. Findings are relayed to the CIO Office and Performance Review Committee.


Top