Sustainability
and ESG

Environmental, Social and Governance issues are central to the Trust’s monitoring of sustainability

Why it matters to us

While financial returns matter, so too does the impact our investments have on society and the environment. We work closely with CT’s Responsible Investment team to systematically integrate environmental, social and governance (ESG) factors into CT UK High Income Trust’s investment process, with a view to reducing risk and improving returns over the long term – both in financial and sustainability terms.

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Our Approach

Environmental, Social and Governance (‘ESG’) issues are the three central factors in measuring sustainability and can present both opportunities and threats to the long-term investment performance, the Trust aims to deliver to shareholders. The Board is therefore committed to taking a responsible approach to ESG matters, for which there are two strands.

Firstly there are the Company’s own responsibilities on matters such as governance and secondly, the impact it has through the investments that are made on its behalf by its Manager.

Responsible Ownership

The Board recognises that the most material way in which the Trust can have an impact is through responsible ownership of its investments. The Manager engages actively with the management of investee companies to encourage that high standards of ESG practice are adopted.

The Manager has long been at the forefront of the investment industry in its consideration of these issues and has one of the longest established and largest teams focused solely on ESG.

Engaging actively with companies on significant ESG matters, to reduce risk, improve performance, encourage best practice and underpin long-term investor value forms a fundamental part of the Manager’s approach towards responsible investment. Engagement in the first instance rather than simply divesting or excluding investment opportunities is also part of this approach.
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A family with a dog is walking in the forest

Voting on the portfolio investments

We expect the Company’s shares to be voted on all holdings where possible. During the last financial year, the Manager voted at 36 meetings of investee companies held by the Company.

The Manager did not support management’s recommendations on at least one resolution at approximately 32% of all meetings. With respect to all items voted, the Manager supported over 94.5% of all management resolutions. One of the most contentious voting issues remained remuneration. Either by voting against or abstaining, the Manager did not support 32% of all management resolutions relating to pay, often due to either poor disclosure or a misalignment of pay with long-term performance.

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