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The ESG Phenomenon - Dunedin

Developments and commentary in and around the ESG investment space.
Dunedin
Shareholders of a UK investment trust have agreed to embed ESG
ideas into how the entity manages its money, part of a continuing
trend in the fund management space.
Proposals to change the policy of the Dunedin Income Growth
Investment Trust, as proposed in late April, were approved last
week.
The trust’s board said that adopting an “enhanced ESG approach”
fitted with its existing goals and would make its shares more
appealing to the market.
“The company had historically integrated certain ESG
considerations into stock selection. Good governance, and high
social and environmental standards have been important
considerations in selecting investments and the company’s
portfolio has always had a focus on quality companies,” it
said.
“Whilst the Investment Manager had not specifically excluded
companies with less good ESG metrics, its previous approach
steered it away from companies that screen poorly for these
factors. For example, the portfolio has been significantly
under-weight the fossil fuel and mining sectors, despite these
sectors accounting for a significant proportion of the dividend
income in the UK market,” it continued in a statement on
Friday.
The trust expects its portfolio to change and be fully compliant
by the time half-year results are issued in September this year.
Most, if not all, changes will be completed by the end of July,
it said.
“Over the past few years, there has been a decisive move among
investors to incorporate environmental, social and governance
considerations into their analysis of companies. It has become
far more than simply a ‘nice to have’, but an integral part of
risk and performance management,” the managers of Dunedin Income
Growth Trust, Ben Ritchie and Georgina Cooper, said.