Responsible Investor

Corporate responsibility

Responsible Investor

We strive to be responsible stewards of our clients' assets within a framework of good governance and transparency

Responsible investment is an integral part of our investment philosophy and approach, as well as our approach to business more broadly. We believe the rationale for long-term responsible investment is clear; stronger economies and well-run or improving businesses that look to the future will deliver stronger, more sustainable investment returns. Being a responsible investor helps us to generate better informed investment decisions and outcomes for our clients.

We also recognise that the asset management industry plays an important role in the economy by helping to transfer today's savings into investment for tomorrow that will enhance productivity, support opportunity and enable future growth. Long-term responsible investment is even more critical given this underlying context.

At Columbia Threadneedle our investment approach is underpinned by a belief that sharing insights across asset classes and geographies generates a richer perspective on global, regional and local investment landscapes. Consistent with this core belief, our dedicated Governance and Responsible Investment team has worked alongside our investment professionals since 1998, facilitating integration of material Environmental, Social and Governance (ESG) analysis into the investment process. In addition to exercising our stewardship and monitoring responsibilities, this approach enables us to consider the risks and opportunities of existing and prospective investments.

Columbia Threadneedle subscribes to and is a signatory to the United Nations-backed Principles of Responsible Investment (PRI) and in 2016 we received an A+ rating in EMEA from the PRI for our overall approach to responsible investing. In the UK we are also a signatory to the Stewardship Code. In its most recent survey of Responsible Investment Performance (2015), ShareAction ranked Columbia Threadneedle no.1 in the 33 largest asset managers in the UK.

Our Responsible Investment Policies set out the underlying principles we draw upon, explaining how our approach is structured, how it works in practice and how it fits into, and contributes to, our overall investment approach, processes and related stewardship engagement activities.

Further details can be found in our quarterly ESG reports on our Governance and Responsible Investment website.

During 2015, we voted at 1,871 company meetings, registering our dissent against one or more resolutions at almost half of those meetings (49%). Over the past three years we have steadily tightened our corporate governance policies to reflect increasing expectations on companies. This has resulted in an increase in the percentage of meetings where we vote against management. We classify a dissenting vote as one that does not support management, whether it is opposing or abstaining on a management resolution, or supporting a proposal tabled by a shareholder that is not endorsed by management. We disclose voting decisions seven days after the relevant company meeting.

Proxy voting - Breakdown of dissent votes

Proxy voting - Breakdown of dissent votes

During the year there have been some marked developments where our Governance and Responsible Investment team has taken a leading role in representing the investor voice. We are selective in choosing the areas where we participate, focusing on those we believe have the most impact and benefit for our clients.

  • We are part of a steering committee set up by the Investment Association to focus on productivity in the UK investment system. This work culminated in a review of the barriers as well as potential solutions to the “productivity puzzle”, which was welcomed by the UK government. Five key recommendations were made: enhance company reporting for efficient capital allocation; enhance investor stewardship and engagement; simplify behavioural incentives and the investment chain; develop efficient and diverse capital markets; and overcome tax and regulatory impediments to the provision of long term finance.
  • A Social Bond Guidance was launched as part of the 2016 update to the Green Bond Principles. This guidance was the end product of a steering committee of investors, underwriters and issuers, and Columbia Threadneedle was invited to take part given our position as a leader in the social investment fund market. The guidance aims to stimulate social bond issuance so that, over time, the social bond market will become as popular as the green bond market, which has reached over €100bn of issuance.

We have continued to develop our responsible investment product range this year in response to investor demand.

In October 2015 the Threadneedle Ethical UK Equity Fund was launched. The Fund takes a three-pronged approach incorporating negative screening, best in class and outcome-focused investing. The latter refers to the aim of investing in companies that derive revenue or growth from sustainable outcomes. This approach moves towards the impact investing space, where dollars invested are expected to show real progress in terms of social or environmental goals. The Fund identifies the revenue exposure of a given company to solutions that have the potential and are seeking to deliver sustainable offerings and growth. These include technologies, services and products that provide solutions for environmental sustainability; climate/energy transition; health and wellbeing; safety and security; demographic challenges; education; and communities.

The Threadneedle Ethical UK Equity Fund builds on our existing product range, which includes two pioneering initiatives, the Threadneedle Low Carbon Workplace partnership and the Threadneedle UK Social Bond Fund, a partnership with Big Issue Invest, the investment arm of The Big Issue.