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 environmental and social factors shaping those prospects, such as:
- Climate change
- Human rights in supply chains
- Diversity and fairness across workforces.
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.
Across the portfolios it manages, Newton uses a thematic framework, helping it to achieve long-term perspective and navigate a world in flux. Newton’s investment themes alert the members of the investment team to the new opportunities that change creates and help identify the emerging risks that will impair the value of investments.
Key areas of focus for Newton’s sustainable strategies include net zero (achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere), electrification and the circular economy.
Active engagement at Newton Investment Management
Newton may engage with selected companies to understand better a company’s approach to managing emerging environmental, social and governance (ESG) issues. Newton may also specifically engage with companies which meets its ESG and sustainability criteria but have also been identified as transitioning away from environmentally or socially harmful activities, to help determine the progress being made in achieving their objectives, supporting the changes being made or encouraging further enhancements.
In addition, engagement may be undertaken in an effort to influence and to support change in the business practices or activities of a company and to obtain information that helps Newton achieve a better understanding of the company’s circumstances. Newton typically exercises voting rights at shareholder meetings of portfolio company holdings.
Newton's engagement in action - highlights from Q2 2022:
Voted at 1,838 Annual General Meetings and 108 Extraordinary General Meetings on behalf of clients.
Engaged with 67 issuers for the purpose of raising ESG concerns or seeking further information.
Newton's approach to net zero
The sixth and latest report by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) in August 2021 warned that the world would reach 1.5 degrees Celsius of warming by 2030 under all scenarios examined. At the COP26 climate summit last November, there was much talk but still a relative dearth of concrete detail over how net-zero carbon emissions would be achieved. What is clear though is that if we are to collectively hit the pledged net-zero targets, there will need to be an extraordinary and global effort, and asset managers will have a crucial role to play in the transition.
Find out more on Newton’s approach to cutting carbon emissions. In a recent paper, the following issues are addressed:
- The stark realities of climate change today…and tomorrow
- Why present-day pledges may not be sufficient for limiting emissions
- Why Newton chooses real-world decarbonisation over portfolio decarbonisation
- The need to support emerging markets in the energy transition
- Why a holistic approach including government and genuine cross-company support is needed
Newton net-zero pledge
50%
of Newton financed emissions to be covered by credible transition plans by 2030
100%
of Newton financed emissions to be covered by credible transition plans by 2040 1, 2
What's Newton's sustainable investment process?
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
An investment approach which has used themes to understand economic, political, social, environmental and technological backdrops, and bring investment opportunities to the fore, since 1978.
Deep insights
Rigorous investment research capability that includes sector 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
Consideration of material and relevant environmental, social and governance risks, issues and considerations into investment research reinforced by active engagement and voting to 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.
Sustainable ‘red lines’
Sustainable ‘red lines’, with responsible investment team validation, seek to ensure there is no investment in security issuers that:
- Breach the UN Global Compact
- Are incompatible with a 2˚C world
- Are deemed to have material ESG risks which are likely to negatively affect future performance and are associated with significant social or environmental harm
The strategies seek to avoid investing in companies that participate in specific areas of activity that Newton deems to be harmful from an environmental and/or social perspective.
Brought to you by Newton Investment Management
in practice
focus
* Source: Newton Investment Management as at 30.06.2022
1Source: UN PRI, 2020e
Solution focus
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 Investment Management as at 30.06.2022
i Source: UN PRI, 2020
Associations and Partnerships
Part of the 100 Black Interns programme, an industry-led initiative to offer 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.
Newton's Sustainable Fund range
The value of investments can fall. Investors may not get back the amount invested.
Fund Manager: Team approach
Fund Managers: Paul Markham & Yuko Takano
Fund Manager: Team approach
Fund Managers: Jon Bell and Robert Hay
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.
Sakshi Bahl
Niall Brennan
Tanushree Chandhok
Ragi Khimasia
Jennifer Law
Lloyd McAllister
Alexander Parkinson
Parag Saxena
Rebecca White
Onkar Jagtap
Amit Khandelwal
Antoine Najm
Anchit Sharma
Diya Choudhary
Harish Venkatachalam
Shalin Vora
Sakshi Bahl
Responsible Investment Analyst
Niall Brennan
Co-Head of Responsible Investment Data Integration
Tanushree Chandhok
Stewardship analyst
Ragi Khimasia
Responsible investment analyst
Jennifer Law
Head of Stewardship
Lloyd McAllister
Head of ESG Research
Alexander Parkinson
Co-Head of Responsible Investment Data Integration
Parag Saxena
Responsible investment analyst
Rebecca White
Onkar Jagtap
Amit Khandelwal
Antoine Najm
Stewardship analyst
Anchit Sharma
Stewardship analyst
Diya Choudhary
Stewardship analyst
Rebecca White
Responsible investment data analyst
Shalin Vora
Responsible investment data analyst
Resources
Sustainable real return strategy – quarterly outlook
What does climate adaptation mean for EM investment?
BRICS, mortar and opportunity
‘Multi-polar’ world could present opportunities
Contact us
Sales Support
+44 (0) 20 7163 8888
1 While Newton’s final target of having 100% of its financed emissions covered by credible transition plans by 2040 necessarily implies that all of its global assets under management (AUM) will be committed to net zero emissions by that point, currently 67% of its AUM (as distinct from financed emissions) are subject to the initiative.
2 ‘Financed emissions’, global assets under management’ or ‘AUM’ refers to the combined assets under management of Newton Investment Management Ltd and Newton Investment Management North America LLC.
Important information
Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Managers Limited (BNYMFM), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.
Assets under management (AUM) relates to the combined assets managed by the Newton Investment Management group. From 1 September 2021, Newton group of companies includes Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA).
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