SDG 1 aims to eradicate extreme poverty by 2030. Virtually all companies held in WHEB’s investment strategy have philanthropic programmes aimed at tackling poverty in their local communities and around the world.
Sonova, a company held in the strategy, develops manufactures and services a variety of hearing care solutions including hearing instruments and aids as well as cochlear implants. Untreated hearing loss among children can impede speech, cognitive development and school performance. This can make it difficult to find work in adult life, increasing the likelihood of children becoming trapped in a cycle of poverty and isolation.
In addition to offering products specifically designed for children, Sonova’s not-for-profit Hear the World Foundation focuses on increasing access to hearing care in low and middle income countries, especially for children. Launched in 2006, the Foundation provides funding, hearing technology and training to local professionals and reached 16 countries through 18 different projects during the 2020/21 financial year.
Royal DSM NV manufactures nutritional and pharmaceutical ingredients, and speciality chemicals and is in WHEB’s ‘Environmental Services’ investment theme. The company has developed a portfolio of products to address the nutritional requirements of a variety of the world’s most at-risk populations. One programme, works with the NGO Vitamin Angels to deliver essential vitamins to children under five and to pregnant and new mothers. To date Vitamin Angels has provided 70 million children in 70 countries with vitamin A. The goals is to reach 50 million mothers by 2030.
At the end of 2020, 32% of WHEB’s strategy was invested in companies supporting SDG 3 ‘Good Health and Well-being’.
One of these companies is CSL which develops medical products for serious and life-threatening diseases. This includes for the treatment of bleeding disorders, rare and serious infections and autoimmune diseases. CSL also manufactures vaccines and related products, including for flu and cervical cancer. In 2020 the company produced 80m influenza vaccines for use in the US and UK. The company also works with the World Federation of Haemophilia (WFH), a not-for-profit global network aiming to improve diagnosis and access to care for patients in developing countries. CSL has committed to donate 50 million international units of product over a three year period.
WHEB’s investment strategy currently has two investments in our ‘Education’ investment theme representing 3% of the total strategy.
One investment is in Grand Canyon Education which provides a variety of services to support university education. The business is located in Arizona in the United States and primarily supports Grand Canyon University with 19,000 places on campus and a further 70,000 enrolled on-line. The university is very popular with lower income groups having kept tuition fees flat for the last ten years. The quality of the education is nonetheless very good with no academic programmes failing the US’s gainful employment guidelines and course completion rates of >90%.
Cerner sells software and IT to hospitals and other healthcare facilities to improve efficiency and health outcomes. The company has substantial internal infrastructure to support its Diversity Equity and Inclusion efforts. Through various mentoring, networking and community engagement programmes, Cerner’s Women in Action (WIA) group aims to educate, inspire and empower women of all races, nationalities, cultures and religions. The WIA has 2,221 members and allies and activities centre around the topics of Women in Leadership, Women in Technology, Women in Healthcare and Multicultural Women. Part of Cerner’s efforts include disclosing workforce representation. As of 2020, this includes 35% Female representation at the Management level and 38% across the global workforce.
7% of the strategy is invested in companies that directly support SDG 6 ‘Clean Water and Sanitation’.
One example of this is Xylem which manufactures a range of pumps, filtration and testing and treatment equipment for the water industry. The company’s Watermark programme also seeks to ‘provide and protect safe water resources for communities in need around the world and educate people about water issues’.
During 2021 a focus will be on providing sanitation and hygiene (WASH) infrastructure and providing education to frontline healthcare workers and communities across six countries experiencing COVID-19 spikes. For example, in India, WASH services will be rehabilitated for 70,000 people from Mumbai’s most low income areas and assistance will be provided to disaster-prone coastal communities in Bangladesh.
Approximately 7% of WHEB’s strategy is invested in companies that support SDG 7 ‘Affordable and Clean Energy’.
Companies that support SDG 7 include manufacturers and operators of renewable energy equipment such as TPI Composites. TPI Composites is a specialised manufacturer of composite materials primarily for the wind turbine industry. The company is an outsourced manufacturer of wind turbine blades and is also building capacity in the US to manufacture lightweight body parts for electric buses.
WHEB’s focus on high quality businesses means that a high proportion of companies in the strategy are companies with a strong culture and high quality employee relations. One example is Autodesk which makes software enabling designers to factor in environmental criteria into their product designs. The company is certified as a ‘Great Place to Work’ with 91% of employees saying it is a great place to work. In addition, in 2021 the company won Best Place to Work for LGBTQ Equality on the Human Rights Campaign Foundation’s Corporate Equality Index.
18% of WHEB’s investment strategy is invested in companies that support SDG 9 ‘Industry, Innovation and Infrastructure.
This goal is supported by companies that help to improve the energy and resource efficiency in manufacturing companies through more efficient and more automated equipment and processes. Companies like Daifuku support this goal through the sale of warehouse and factory automation equiptment. Companies that provide environmental consulting and advice as well as companies that help make infrastructure and buildings safer are also considered to support SDG 9.
Other companies in the strategy contributing to this SDG include A.O. Smith and Ansys. A.O. Smith’s products play a significant role in reducing the energy demand of buildings that is associated with heating and cleaning water, as well as filtering air. Ansys’ simulation software is an important tool of cost-efficient validation of designs.
Centene is a US company focused on providing managed healthcare services to clients in the US. The company focuses in particular on individuals and families who receive healthcare support through Government programmes principally Medicaid and Medicare. The company serves 25.5 million beneficiaries in the US focusing almost exclusively on poor and disadvantaged communities many of whom would not be able to access healthcare services without Centene’s presence in their community.
24% of WHEB’s investment strategy is invested in companies that support SDG 11 ‘Sustainable Cities and Communities’.
SD11 is focused on making cities and human settlements inclusive, safe, resilient and sustainable.
This includes companies that are helping to deliver low carbon logistics and transport such as the US business Aptiv plc. Aptiv is a manufacturer of vehicle components. The company provides products and services that support advanced safety features including automation and signal and power solutions used in hybrid and electric vehicles.
This includes companies that support the ‘circular economy’ through, for example the use of recycled materials. One such company is DSM that has developed Akulon® a high-performance polymer used in a variety of applications from food packaging to sports equipment. Several types of Akulon are manufactured from post consumer plastic such as disused fishing nets.
The strategy invests in a range of other companies that support SDG 12 such as businesses that manufacture materials and equipment used in pollution control.
4% of WHEB’s strategy is invested in companies providing products and services that directly increase the amount of renewable energy that is generated and sold around the world.
SDG13 is mainly focused on the public policy that is needed to tackle climate change. Several portfolio businesses including First Solar, Vestas, Ecolab and DSM are supporters of RE100 a network of companies committed to sourcing renewable energy and supporting public policy to accelerate decarbonisation of the electricity system.
Relatively few companies in the WHEB strategy have a direct relationship with the marine environment. This was a subject that we discussed at WHEB’s Independent Advisory Committee (see http://www.whebgroup.com/media/2019/03/20190223-Summary-minutes.pdf). One company that does support cleaner and healthier oceans is Renishaw plc. which has supplied equipment to enable researchers to accurately assess the proportion of microplastics in oceanwater.
The WHEB strategy is invested in one company that uses wood in their production processes. Smurfit Kappa, a manufacture of recycled cardboard packaging, uses wood to supplement their recycled cardboard operations. The company announced in 2020 that 99.8% of the virgin wood fibre that they produce or purchase is Chain of Custody certified under Forest Stewardship Council® (FSC), Programme for the Endorsement of Forest Certification™ (PEFC) or the Sustainable Forestry Initiative® (SFI).
The 2021 ‘World’s Most Ethical Companies’ list selected by the Ethisphere Institute cited 135 companies for their role in influencing and driving positive change in the business community and societies around the world. Of these companies, five are companies that are held in WHEB’s investment strategy. These five are Aptiv, Ecolab, Linde, Premier, and TE Connectivity
Several of the companies that are held in WHEB’s investment strategy are themselves active supporters of the UN’s Sustainable Development Goals.
For example, Vestas, a leading developer and manufacturer of wind power turbines, has set an aim to become the ‘safest, most inclusive and most socially responsible company in the energy industry’. Vestas has adopted six of the UN SDGs which it believes to be most relevant to the business, in order to focus efforts for funding education, health and access to energy for local communities.
The SDGs Vestas aligns with include SDG 17 Partnerships for the Goals, as well as SDG 4 Quality Education, SDG 7 Affordable and Clean Energy, SDG 8 Decent Work and Economic Growth, SDG 12 Responsible Consumption and Production and SDG 13 Climate Action.