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.