DISCOVER RESPONSIBLE INVESTING

Sustainable
investing at Newton Investment Management

What does Sustainable investing mean for Newton Investment Management?

Newton understands the investments it makes can have far-reaching influence – not just on its clients’ financial prospects, but on the environmental and social factors which can shape those prospects, such as:

  • Climate change
  • Human rights in supply chains
  • Diversity and fairness across workforces.

Newton invests based on the conviction that 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.

Across the portfolios it manages, Newton uses a thematic framework, in the belief themes provide necessary perspective and aid idea generation and risk management. In seeking to identify the drivers of long-term, structural change in the world, the investment team at Newton has currently identified nine influential themes.

In Newton’s sustainable strategies, a particularly influential theme is Earth matters. This theme considers a wide scope of environmental concern, and focuses on the key areas of net zero, electrification, and the circular economy.

Other themes, many of which also include elements conducive to sustainable investing, include:

According to Newton, the impact of structural change will manifest across traditional economic sectors and will be significant in magnitude and long-term in duration.

Invest with purpose

Active engagement at Newton Investment Management

Companies which are run for the long-term, actively managing risks while also balancing the interests of varied stakeholders can arguably produce more resilient returns for shareholders. As such, Newton aims to support positive changes in companies through voting and engagement.

Newton’s engagement activities are not limited to the companies in which it invests. As a provider of investment solutions, Newton has an inherent responsibility to do what is right on behalf of clients as well as wider asset owners and stakeholders in the financial system. As such, it has been active participant in the debate around enhancements to financial systems; its executives and investment professionals donate their time to work on furthering best practices and regulations in the industry.

Newton's engagement in action - highlights from Q4 2021:

  • Voted at 51 Annual General Meetings and 26 Extraordinary General Meetings on behalf of clients

  • Engaged with 28 companies with the primary purpose of raising ESG concerns

What's Newton's sustainable investment process?

Newton’s focus is on companies run for the long term, those that 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.

Active ownership

The integration of ESG inputs into investment research is reinforced by active engagement and voting.

Deep insights

Rigorous investment research and forensic accounting conducted by sector analysts and Newton's dedicated responsible investment team provides global perspectives.

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 means stepping away from indices and ensuring engagement is done for the benefit of the portfolio.

ESG reporting

Providing detailed reports on environmental and social footprint of portfolios as well as stewardship activities carried out on clients’ behalf.

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 feature structural growth opportunities, such as those providing solutions to environmental or social challenges.

Balanced

Entities which can manage social and environmental factors well enough, while still capable of generating gains for shareholders.

In transition

Recognise issues and are, or can, adapt their business models to reverse potentially harmful actions.

Not involved in market failures

Avoid or omit companies involved in areas of high social cost, environmental degradation, or which are violators of the UN Global Compact Principles.

Sustainable ‘red lines’

Newton’s responsible investment team has veto powers. The team can object to an investment in a particular security if it believes a company or government is beyond redemption and cannot improve. These red lines:

  • seek to ensure that any investments do not violate the UN Global Compact’s ten principles that promote responsible corporate citizenship (relating to areas such as corruption, labour standards, human rights and the environment).
  • help Newton avoid companies with characteristics incompatible with the aim of limiting global warming to 2°C; incorporate a tobacco exclusion as Newton does not view tobacco business as compatible with its commitment to sustainable improvement.
Why Newton Investment Management?

Brought to you by Newton Investment Management

    Scale
    Expertise
    Commitment
    in practice
    Experience
    Solution
    focus
    Logo icon
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* Source: Newton Investment Management as at 31.12.2021
1Source: UN PRI, 2020e

Solution focus

Newton's suite of sustainable strategies seek both positive investment returns and positive societal outcomes.

Solution focus
Scale*
Expertise
Commitment in practice
Experience

* Source: Newton Investment Management as at 31.12.2021
1Source: UN PRI, 2020e

Associations and Partnerships

Part of the 100 Black Interns programme, which offers a range of investment internships to black graduates.

Newton has signed up to the international Net Zero Asset Managers initiative to support the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to support investing aligned with net zero emissions by 2050 or sooner.

Newton's Sustainable Fund range

BNY Mellon Sustainable Real Return Fund

Fund Manager: Suzanne Hutchins

BNY Mellon Sustainable Global Equity Fund

Fund Managers: Paul Markham & Yuko Takano

BNY Mellon Sustainable Global Dynamic Bond Fund

Fund Manager: Team approach

BNY Mellon Sustainable Global Equity Income Fund

Fund Managers: Ilga Haubelt, Robert Hay, and Jon Bell

BNY Mellon Sustainable Sterling Bond Fund

Fund Managers: Howard Cunningham & Scott Freedman

BNY Mellon Sustainable UK Opportunities Fund

Fund Managers: Louise Kernohan & Georgina Cooper

BNY Mellon Sustainable Global Emerging Markets Fund

Fund Managers: Ian Smith and Paul Birchenough

BNY Mellon Sustainable European Opportunities Fund

Fund Manager: Paul Markham

Meet the team

Newton’s dedicated responsible investment team is fully integrated in their investment process, working alongside their conventional financial analysts to inform their investment decisions.

Resources

Achieving real-world outcomes

Newton’s global head of sustainable investment Therese Niklasson explains why it is vital for investments to make a real-world impact.

The value of investments can fall. Investors may not get back the amount invested.

 

572371 Exp: 14 September 2022