Sarasin & Partners: Securing tomorrow 

 

At Sarasin & Partners, as a long-term asset manager, we aim to behave in a way that supports sustainable economic progress and protect the interests of future generations. What we invest in today matters to all of us. Companies drive capital allocation and growth, and are thus vitally important to the achievement of the UN Sustainable Development Goals. Investors can play a key part in ensuring that this happens.

 The notion of sustainability is central to our stewardship investment philosophy, which we deliver through three core activities:

  1. The allocation of capital to companies that are aligned with society
  2. Acting as long-term and engaged owners
  3. Conducting outreach to drive improved market incentives

Firstly, we seek to allocate capital to companies whose business activities improve societal welfare. We think about the goods and services the companies deliver, and we consider how they deliver them. We look for companies with robust environmental, social and governance credentials – as how a company behaves with local communities, with its staff, and with the environment has an impact on whether it will be successful or not over the long term.

Secondly, once our clients become shareholders, we support management to behave in a responsible way; and challenge management that diverges from these expectations. We help company Boards look through the everyday market noise to focus on what is important for their long-term success.

Thirdly, we look at the bigger picture. Individual businesses succeed or fail in a broader marketplace, and market failures that create system-wide problems can damage investor interests more than company-specific failures. Where we believe we can catalyse positive market-wide change, we undertake policy outreach. This often involves collaborating with like-minded investors, reaching out to regulators, policy-makers and civil society organisations.

A key focus for us is climate change, which is not only the defining challenge of our generation, but arguably the biggest long-term risk to investment performance. Alongside our engagements with specific companies, we are calling on governments to provide a long-term framework that incentivises lower carbon investments, and that disincentivises carbon-intensive activities. Specifically, we are pressing regulators to require proper reporting on material climate risks. As highlighted in the old adage “what gets measured, gets managed”, we see accurate climate risk reporting as a prerequisite for determined system-wide climate action.

Looking at the wider picture in this way is an intrinsic part of looking after our clients’ interests. There are deep and profound challenges we need to face, both as investors and as a society. Climate change is one, and it is not going away any time soon. Only by looking at our long-term responsibilities today will we be able to help our clients achieve security and prosperity tomorrow.