At its core, WHEB is an impact investor. All the investments made through our investment strategy have positive social and/or environmental impact. This detailed methodology document sets out WHEB’s approach to assessing and measuring the positive impact associated with the products and services sold by companies held in the investment strategy.
SUSTAINABLE DEVELOPMENT GOALS
The UN Sustainable Development Goals (UN SDGs) were agreed by the world’s governments under the auspices of the United Nations in 2015. The seventeen goals set out aspirational and demanding targets for the world to achieve by 2030. The SDGs send a powerful message to the investment community as to what the world’s governments consider as development priorities through to 2030.
Click on each Sustainable Development Goal to see examples of how WHEB’s investment strategy supports that goal.
IMPACT MAP
All products and services have an impact. For some, it is a negative impact – harming or undermining the social and environmental systems on which life depends. For others, the impact is positive, helping to support or even restore these systems. At WHEB, we believe that understanding and assessing ‘impact’ is becoming a third dimension of investment expertise alongside established disciplines in assessing investment risk and return.
WHEB’s ‘impact engine’ is an analytical tool that rates the overall impact ‘intensity’ of the products and services offered by companies. This tool captures the different dimensions of positive impact that are created by products and services and provides an overall impact intensity rating for the company as a whole.
A second step in the investment process assesses the overall quality of the business including how it manages critical environmental, social and governance (ESG) issues.
The two dimensions are plotted together on an ‘Impact Map’ with the fundamental quality rating on the y-axis and the impact intensity rating on the x-axis. Only companies with a positive impact are considered for investment. More than 80% of listed companies receive negative scores in the impact engine and are not candidates for investment.
Impact map – portfolio holdings (31st March 2021)
ENGAGEMENT CASE STUDIES
Stewardship & Engagement
Stewardship and engagement have always been core activities for WHEB. Critically, and still unusually, this work is undertaken by the investment team itself. As a long-term investor, we play an important role in advocating for more progressive practices. As importantly, we can also benefit from these improved practices.
Voting
Voting Summary (2020)
- Votes against management
- Votes with management
- Do not vote 1
- Votes withheld 2
- Votes abstained 3
1 WHEB’s policy has been not to vote at company meetings where we sold the shares between registration and the actual meeting date. In 2021 we plan to vote all of our shares for which we are registered.
2 At some company meetings voting ‘against’ is not an option. In these cases, we elected to withhold our vote.
3 We elected to abstain on votes where the company had already indicated that it would withdraw the particular resolution.
Engagement
Company engagement in 2020 (by topic)
- Governance (not ESG Related)
- ESG Disclosure and Governance
- Social Issues
- Environmental Issues
In 2020, we engaged on 112 occasions with 38 companies representing 81% of the strategy.
In many cases we engage businesses on more than one issue in the course of the year. Approximately 50% of these engagements were ‘deep’ engagements in which we had more than three interactions with company executives on the issue in question.
With 37% of engagement on corporate governance issues, this was once again the most common area of company engagement. Director independence and CEO remuneration were areas that received the most attention in 2020. Social issues accounted for 11% of engagement and focused most notably on gender diversity and the management of the COVID-19 pandemic.
Environmental issues (25%) and ESG disclosure and governance (27%) accounted for the remainder of our engagement in 2020. Carbon emissions and targets were a key focus of our environmental engagement, while board accountability and executive incentives on sustainability were common themes in engagement on ESG governance.