Newton understands the investments it makes can have far-reaching influence – not just on its clients’ financial prospects, but on environmental and social factors shaping those prospects, such as:
Newton believes the interests of investors, and of society more widely, can be mutually supportive. Reflecting this belief, Newton is an active and engaged owner of financial assets, investing in a manner it believes meets its responsibilities to clients and society as a whole.
Newton aims to look at investment prospects from all relevant angles, in search of the widest perspective possible on the investment landscape. Its multidimensional research platform has fundamental, in-house research as a key component, but also includes thematic, Environmental, social and governanace (ESG)-focused, quantitative, geopolitical, forensic accounting, credit, investigative and private-market research. It believes this approach leads to better investment decisions.
Newton’s sustainable strategies aim to encourage a better allocation of capital that leads to the generation of sustainable risk-adjusted returns for clients alongside improved long-term global outcomes for society and the environment.
Intrinsic to the understanding of the potential of an investment is an appreciation of the quality of the company’s management, its structure, the appropriateness of its internal controls and the assurance that ESG matters are managed to the benefit of long-term investor value. Speaking directly with companies as part of the research process can play a crucial part in helping to achieve this understanding.
Newton believes it is important that investors exercise the ownership rights they have been afforded, and it endeavours to exercise voting rights in all markets.
As a responsible and engaged investor, Newton engages for change where it believes this to be in the best long-term economic interests of its clients. It believes that responsibly managed companies are better placed to achieve sustainable competitive advantage and provide strong long-term growth.
Newton's engagement in action - highlights from 2022:
Evidence of the direct link between the human burning of fossil fuels and climate change is all around us, yet despite the increasingly unequivocal science there is a long way to go in the fight to limit the impact of rising temperatures and increasingly frequent volatile weather events on our planet.
Despite 196 countries agreeing at COP21 in Paris in 2015 to limit temperature rises to well below 2 degrees Celsius above pre-industrial levels, global carbon emissions have continued to rise. What is clear is that if we are to collectively hit the net-zero target, it will require an extraordinary and global effort by governments, companies and individuals, and asset managers will have a crucial role to play.
Newton is a signatory to the Net Zero Asset Managers initiative, an international group of asset managers committed to supporting the goal of net-zero greenhouse-gas emissions by 2050 or sooner.
Newton’s approach to net zero is led by science, focusing on real-world emission reductions rather than superficial portfolio decarbonisation. This guides its priorities around focusing on the regions, sectors and companies that are the most carbon-intense.
Newton’s focus is on companies run for the long term, which effectively balance the interests of stakeholders while also actively managing material risks for their industry (or economy). Newton believes such companies can deliver resilient returns for investors.
Thematic heritage
A research approach which has used themes to understand economic, political, social, environmental and technological backdrops, and bring investment opportunities to the fore.
Deep insights
A rigorous investment research capability includes research analysts, responsible investment team, data scientists, thematic analysts and forensic accounting.
Collaborative approach
Building partnerships with clients, Newton recognises the power of external alliances to leverage change on scale.
Bold decisions
A conviction-led approach to investing, stepping away from indices and ensuring engagement is done for the benefit of the portfolio.
Active ownership
Long commitment to active ownership through the integration of ESG inputs into investment research reinforced by active engagement and voting which may deliver better outcomes.
Newton aims to optimise performance for its clients by investing in what it believes to be well-managed, sustainable companies and governments. Its sustainable strategies seek to support – invest in – entities that are:
Solutions providers
Companies that are tackling the most pressing social and environmental needs as identified in Newton’s sustainable taxonomy.
Balance stakeholders
Companies integrating the highest standards of sustainability into their business models to minimise any negative impacts on society or the environment.
Transition
Companies that are explicitly committed to transforming their business models for defined social or environmental benefits.
Avoiding market failures
Actively omitting companies involved in areas of high social cost, environmental degradation, exploitative monopolies or violators of the UN Global Compact.
Newton’s sustainable ‘red lines’ are built on a combination of exclusions that effectively avoid investments in security issuers involved in or that generate a material proportion of revenues from areas of activity that Newton deems to be harmful from a social and/or environmental perspective.
WHY NEWTON INVESTMENT MANAGEMENT?
Via its parent company BNY Mellon, Newton has taken various steps to reduce its carbon footprint, such as reducing energy use and related greenhouse-gas emissions, procuring renewable electricity, and using carbon offsets to compensate for the remaining emissions in its footprint. Newton also places sustainability, education and diversity at the core of the projects it sponsors within the wider community.
In-house expertise Newton’s investment managers are supported by a well-resourced, global responsible investment team, comprising subject-matter experts. The responsible investment team guides Newton’s overall sustainability ecosystem and drives its internal frameworks, policies, standards, and specialised insights.
Newton's sustainable strategies seek a balance between the current and future needs of stakeholders. They aim to encourage a better allocation of capital that leads to the generation of sustainable risk-adjusted returns for clients alongside improved long-term global outcomes for society and the environment.
* Source: Newton group of companies as at 30 June 2023. Sustainable AUM represents strategies managed within Newton's sustainable investment process. Note, thematic strategies includes thematic strategies that follow a sustainable process. Newton global assets under management (AUM) is the combined total assets under management of Newton Investment Management Limited (‘NIM’), Newton Investment Management North America LLC (‘NIMNA’) and Newton Investment Management Japan Limited (‘NIMJ’).
Newton Investment Management Ltd signed the UN Principles for Responsible Investment in February 2007, less than a year after they were drafted.
Newton Investment Management Ltd was an early adopter of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, providing voluntary disclosures in line with these since 2019, prior to them becoming a regulatory requirement.
Newton is a founding supporter of the charity The Centre for Financial Capability, and is a founding member of its ground-breaking collaborative project KickStart Money, which aims to take financial education to almost 20,000 UK primary school children, catalysing a movement to build a savings culture for the future.
Newton is a founding supporter of the charity The Centre for Financial Capability, and is a founding member of its ground-breaking collaborative project KickStart Money, which aims to take financial education to almost 20,000 UK primary school children, catalysing a movement to build a savings culture for the future.
Part of the 100 Black Interns programme, which offers a range of investment internships to black students and recent graduates.
In March 2021, Newton joined the Net Zero Asset Managers initiative, demonstrating its commitment to work with clients to help fulfil their net-zero ambitions and to navigate portfolios through the complex energy transitions that are unfolding. (Note: theis committement applied to Newton Investmemt Management and Newton Investment Management North America.
The value of investments can fall. Investors may not get back the amount invested.
Fund Manager: Phillip Shucksmith and Matthew Brown
Portfolio Managers: Nick Pope , Julianne McHugh
Fund Managers: Jon Bell, Robert Hay and Jim Lydotes
Fund Managers: Howard Cunningham and Scott Freedman
Fund Managers: Louise Kernohan, Georgina Cooper and Nick Pope
Fund Managers: Ian Smith, Paul Birchenough and Alex Khosla
Fund Managers: Nick Pope and Julianne McHugh
Newton’s dedicated responsible investment team is fully integrated across its investment process, working alongside the group’s conventional financial analysts to help inform investment decisions. Meet some of them here.
Portfolio manager, fixed income team
Portfolio manager, fixed income team
BNY Mellon Sustainable Global Dynamic Bond Fund's Benchmark: The Fund will measure its performance against 1 month EURIBOR + 2% per annum (the ""Cash Benchmark""). The Cash Benchmark is used as a target against which to measure the performance of the Fund over 5 years before fees.
EURIBOR is the Euro Interbank Offer Rate and is a reference rate that is constructed from the average interest rate at which Eurozone banks offer unsecured short-term lending on the inter-bank market. The Fund is actively managed, which means the Investment Manager has discretion over the selection of investments, subject to the investment objective and policies disclosed in the Prospectus.
BNY Mellon Sustainable Global Real Return Fund's Benchmark:The Fund will measure its performance against 1 month EURIBOR + 4% per annum (the ""Cash Benchmark""). The Cash Benchmark is used as a target against which to measure the performance of the Fund over 5 years before fees.
EURIBOR is the Euro Interbank Offer Rate and is a reference rate that is constructed from the average interest rate at which Eurozone banks offer unsecured short-term lending on the inter-bank market. The Fund is actively managed, which means the Investment Manager has discretion over the selection of investments, subject to the investment objective and policies disclosed in the Prospectus.
BNY Mellon Future Earth Fund's benchmark: The Fund will measure its performance against the MSCI AC World NR Index (the ""Benchmark"").
The Fund is actively managed, which means the Investment Manager has absolute discretion to invest outside the Benchmark subject to
the investment objective and policies disclosed in the Prospectus. While the Fund's holdings may include constituents of the Benchmark, the selection of investments and their weightings in the portfolio are not influenced by the Benchmark. The investment strategy does not restrict the extent to which the Investment Manager may deviate from the Benchmark.
BNY Mellon Future Food Fund's benchmark: The Fund will measure its performance against the MSCI AC World NR Index (the ""Benchmark"").
The Fund is actively managed, which means the Investment Manager has absolute discretion to invest outside the Benchmark subject to
the investment objective and policies disclosed in the Prospectus. While the Fund's holdings may include constituents of the Benchmark, the selection of investments and their weightings in the portfolio are not influenced by the Benchmark. The investment strategy does not restrict the extent to which the Investment Manager may deviate from the Benchmark.
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
Important information
Newton will make investment decisions that are not based solely on ESG considerations. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that ESG and sustainability considerations are assessed and the assessment of their suitability for Newton's sustainable strategies may vary depending on the asset class and strategy involved. For Newton’s sustainable strategies, ESG reviews are performed prior to investment for corporate investments (single name equity and fixed income securities). The analysis will then also follow the Newton sustainable investment process to ensure it fits with the wider Newton sustainable investment philosophy.
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