Investing responsibly is about common sense. It is part of the duties of a portfolio manager to analyse relevant and material risks and opportunities regardless of whether they are classified as ESG factors or, say macroeconomic trends and political risk. Making well informed investment decisions is essential to our ability to achieve our goal of generating a sustainable and competitive risk-adjusted return over time. As Brummer & Partners encompass different investment strategies and because our funds invest in different types of financial instruments, each fund’s approach to responsible investment needs to be adapted to its specific situation and circumstances and the portfolio managers together with the analysts are best suited to decide on how that should be done.
Brummer & Partners AB and Brummer Multi-Strategy AB (the manager of BMS) have separate policies for responsible investment under which the various investment management firms in the group are requested to draw up their own policies and define what responsible investment means to them. The hedge funds in which BMS invests are supported by Brummer’s Sustainability and Risk Control teams. The group wide Sustainability team supports the funds with policy development, education, client communication and general advice and recommendations relating to responsible investment, and the Risk Control team monitors compliance with the policies on a quarterly basis.
BMS together with the other funds in the group have decided to exclude long and short investments in companies involved in controversial weapons and long investments in coal. The Risk Control team screens all funds against ISS-ESG's database quarterly to identify any direct holdings in such companies. The funds are also screened for direct holdings which violate international standards on environmental protection, human rights, labour standards and anti-corruption. The purpose of the norms based screening is not necessarily to encourage the funds to exclude companies which violate international standards. Instead, the Sustainability team engages in dialogue with the funds on the investments concerned and ensure that the chief investment officers are aware of the associated ESG issues and factor these into their analyses. Flagged companies are reported by the Risk Control team to the board of directors who may ask the CIO for more information. The Sustainability team engages with the investment team on flagged companies and provides research on ESG issues, assists in dialogue with the company or follow up on the dialogue held by the investment team.
The Investor Relations team is responsible for communicating our responsible investment practices and for collecting feedback on client preferences on how we can improve.