Cazenove declared winner of the ‘ESG investing olympics’
Friends Provident Foundation, the Joffe Charitable Trust, and the Blagrave Trust have announced the winner of their ‘ESG investing olympics’ competition, with investment managers Cazenove picking up the prize of a £33.5 million investment mandate.
Held earlier this year, the ‘ESG investing olympics’ was a first of its kind open tender with the key instruction for would-be managers to “impress us” on social and environmental integration and impact.
60 proposals were received from a wide range of managers, with five invited to present to an auditorium of mission-led investors, including charities and religious organisations, at the Royal Institution in London in March. The five ranged from boutique impact managers purposely seeking to invest in solutions, to large managers integrating ESG and seeking to move markets and transnational companies via their stewardship.
By taking this approach to selecting a new manager, the charities hoped to:
Bring investment management out of the shadows
Draw on the expertise of like-minded investors
Share learning on emerging best practice in the market, and
Send a market signal regarding asset owner demand for investment with purpose and expectations for ESG integration and impact.
The proposals were assessed for intentional social and environmental impact, high standards of ESG integration covering exclusion, engagement and its escalation, voting record, in-house expertise, and impact reporting.
We are delighted to announce Cazenove as the winner of the ‘ESG investing olympics’ and look forward to becoming the cornerstone investors in a new best in class multi asset class ESG fund. Our Trustees were torn between choosing an ‘evolving incumbent’ or a ‘new disruptor’ and decided on the former. We were impressed with Cazenove’s proposal, which meets our new, challenging, investment policies, was well received by attendees in March, and offers the potential to achieve scale and influence the wider market.
The charities also recognised the strengths of runners-up EQ Investors and commended their ‘best in class’ credentials as a boutique impact manager and ‘new disruptor’.
We are thrilled to be selected by these leading purpose-led investors, and together are committed to investing for a better future. The ‘ESG investing olympics’ set an amazing example of collaboration and transparency, breaking new ground in sustainable investing. We look forward to continuing in this spirit, working with the charities to use their investments for good, developing best practise in investing for impact. Our innovative multi-asset fund, launching in December, has a clear intention to generate both a competitive financial return and a positive impact on people and planet. Available to charities and individual investors, the Cazenove Sustainable Growth Fund will have a carbon footprint of less than half of the global equity index and will generate five times the social impact.
We believe that charities should use all their assets to achieve their mission, rather than just the income generated from their endowments. In order to deepen our understanding of what this means in practice, the ‘ESG investing olympics’ has already enabled us to both get a wider sense of the market than would have been possible acting on our own, and to benefit from the expertise of others. We are excited to continue to learn together holding ourselves to high standards of ESG investing moving forwards.
Friends Provident Foundation holds a strong belief in the potential of ‘investing to engage’ and ‘radical transparency’ to effect change in mainstream financial markets. In the spirit of the ESG investing olympics, which set out to bring investment management out of the shadows and send a clear market signal for higher ESG standards, we will work with Cazenove to continually raise market standards and best practice, and will regularly report on our experience.
In the Autumn, they will publish a ‘state of the sector’ report, covering ESG market trends and remaining gaps identified from analysis of the 60 proposals.
I don’t want to give too much away but one positive trend identified is fossil fuel divestment becoming commonplace. Gaps in the market include less developed integration of the ‘S’ of ESG in stock selection, and weak shareholder engagement escalation policy and practice.
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