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Sustainable Portfolio Management – Annual Report 2022

The positive impact our investments are making

22 April 2022

Unless otherwise stated, companies referenced in this report were companies held by our Sustainable Total Return Strategy as of 31 December 2021 and may no longer form part of our portfolios. Reference to specific companies in this report is not an opinion as to their present or future value and should not be considered investment advice or a personal recommendation. They’re included in this report to demonstrate the positive impact companies can have.

ESG overview

Here we provide a snapshot of our sustainable strategy’s exposure to key environmental, social and governance (ESG) factors, and how it compares to the wider market1.

ESG data helps us to assess the internal operational quality of a business, and its ability to mitigate risks to future cash flow that may arise from ESG factors. We integrate ESG analysis throughout our investment due diligence, and the data shown below is an output of that process.

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  • Business Involvement
    Business involvment
  • International Norms Violations
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  • Governance Risk
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  • Our Top 5 Recyclers
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  • Environmental Risk
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  • Social Risk
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  • Gender Pay Gap
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Strategy impact is calculated by multiplying the company impact metric by the proportion of the company held by the strategy as of 31 December 2021, based on share count. This is a point-in-time assessment and we may no longer hold these companies within our portfolio. Strategy impact figures are not an opinion to each company’s present or future value. The company impact metric varies for each company shown - please see the accompanying company text for details.

The impact our companies are making

Our sustainable strategy invests in companies whose business activities support at least one of the UN Sustainable Development Goals (SDGs). Here, we highlight some of the ways our investee companies are making a real difference to a range of sustainability challenges. 

Business involvment

Schneider Electric

134m metric tons of CO2 saved by customers since 2018 through the IoT-enabled EcoStruxure architecture (equivalent to the emissions from 33.8 coal-fired power stations in one year).

Source: Schneider Electric, Sustainability Report 2020-2021 [PDF, 24.7MB]

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Danaher

70bn gallons of drinking water and wastewater treated daily using Trojan ultraviolet treatment systems, installed in more than 11,000 municipalities and 150,000 industrial facilities worldwide.

Source: Danaher, Sustainability Report 2021 [PDF, 14.5MB]

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Johnson & Johnson

2bn doses of medicine donated across 50 countries to tackle soil-transmitted helminths, one of the most widespread neglected tropical diseases that disproportionately affects low income countries. J&J has been in the top 3 companies worldwide on the Access to Medicine Index for the past decade for its efforts in distributing medicines to low and middle-income countries.

Source: Johnson & Johnson, March 2022

Business involvment

HDFC Bank

780,000 women in the unbanked/under-banked population supported through the Sustainable Livelihood Initiative, which provides vocational training, financial literacy education, and access to credit facilities, to promote financial independence.

Source: HDFC Bank, Sustainability Report 2019-2020 [PDF, 22.5MB]

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AIA

38m people provided with health and life insurance across Asia, helping to close the region’s estimated $83 trillion mortality protection gap, and helping families and communities to build financial resilience.

Source: AIA, Environmental, Social and Governance Report 2020 [PDF, 12.4MB]

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Microsoft

200m people offered “accessible by design” features in Microsoft 365, including AI to assist blind and low-vision readers, and options to reduce eye strain and accommodate light sensitivity.

Source: Microsoft, April 2021

Business involvment

Halma

110,000km of water pipes are being monitored for leaks using Halma’s acoustic leak monitoring system, helping to conserve billions of litres of water each year.

Source: Halma, Annual Report and Accounts 2021

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Croda

106,455 hectares of land saved in 2020 thanks to Croda’s agricultural biostimulants, adjuvants, and seed coatings. These products help increase agricultural yield and cropping intensity without soil degradation, biodiversity loss, or requiring land expansion through deforestation.

Source: Croda, Sustainability Report 2020

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UnitedHealth

2m consumer engagements with the GetCovered programme, which helps individuals who lost employer-based health insurance during the pandemic.

Source: UnitedHealth, Sustainability Report 2020 [PDF, 6.2MB]

*Strategy refers to both Sustainable Multi-Asset Class and Sustainable Global Equity discretionary strategies managed by Barclays Private Bank

EssilorLuxottica case study: Eliminating poor vision

In this short case study, we explore how one investee company is supporting the UN’s bold and admirable target of providing eye care for all by 2030.

Uncorrected poor vision is the world’s most widespread unaddressed disability. It affects 1 in 3 people, 90% of whom live in the developing world. It is estimated that 2.7 billion people live with uncorrected poor vision due to a lack of affordability, access, awareness, and often, acceptance2.

For a child, an eye test can be the difference between inclusion or exclusion, between access to information, and seeking a livelihood or not, according to United Nations (UN) Ambassador Dr Aubrey Webson3.

In July 2021, the UN passed a resolution that sets a target for eye care for all by 2030, adding eye care to the Sustainable Development Goals. Countries are set to ensure full access to eye care services for their own populations, as well as to support global efforts. New expectations for financial institutions to provide targeted finances to go towards preventable sight loss have also been created4. This resolution aligns with EssilorLuxottica's ongoing efforts to tackle uncorrected poor vision in a generation.

Raising global awareness

Raising awareness of refractive error is one of the most critical actions that can be taken. EssilorLuxottica’s social impact fund, Vision For Life, has played a part in creating the See Now global campaign to increase awareness and drive public mobilisation on ending avoidable blindness and vision impairment. By 2020, the campaign had reached 32 million people5. The fund also founded Our Children’s Vision, which plans to donate more than 500,000 pairs of glasses and screen 50 million children worldwide for vision impairments5.

Its Ready2Clip range of glasses is designed to fit any face shape and enable on-the-spot customisation and delivery for each wearer, adapted to their own prescription. These are particularly beneficial for school children, as they reduce waiting times and costs for parents6. Furthermore, EssilorLuxottica has pledged to provide 200 million people living below the poverty line with free ophthalmic glasses5.

Since 2013, EssilorLuxottica’s 2.5 New Vision Generation business has been working to help support and extend the eye care infrastructure for refractive error. For example, Eye Mitra7 trains young and unemployed people to become primary vision care providers, as well as supporting them in setting up their own businesses to sell prescription glasses and sunglasses in their community. Today, this is the world’s largest rural optical network5.

EssilorLuxottica has committed to eliminating poor vision worldwide by 2050.

Sources and references

Key investment risks

ESG data risk: Some positions within the strategy may not have an ESG rating due to the nature of their asset class (e.g. government bonds, gold, hedging derivatives). Should a position not be covered by MSCI (or an equivalent provider) due to lack of coverage, the Portfolio Manager will determine the position’s equivalent rating.

Market risk: The possibility for an investor to experience losses due to factors that affect the overall performance of the financial markets. Market risk, also called “systematic risk”, cannot be eliminated through diversification, though it can be hedged against. Sources of market risk include major natural disasters, recessions, political turmoil and geopolitical tension.

Liquidity risk: The risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimise a loss.

Derivatives exposure: The use of these instruments can, under certain circumstances, increase the volatility and risk profile of the strategy beyond that expected of a strategy that only invests in equities. The strategy may also be exposed to the risk that the company issuing the derivative may not honour their obligations which could lead to losses arising.

Currency risk: An investor will be exposed to currency fluctuations between their domestic currency, a fund’s holding currency, and the local currency of an investment.

Interest rate risk: An investor will be exposed to interest rate risk. Changes in interest rates will impact the performance and/or value of instruments. Interest rates tend to change suddenly and unpredictably.

Inflation: Inflation will reduce the real value of your investments in the future.

Taxation and tax relief: Levels of taxation and tax relief are subject to change.

Returns are not guaranteed: Past performance is not an indication of future performance. The value of investments, and any income, can fall as well as rise, so you could get back less than you invested. Neither capital nor income is guaranteed.

Related articles

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Sustainable Portfolio Management

In this year’s report, we focus on some of the exciting new technologies that could meaningfully improve sustainability outcomes, from precision manufacturing and measurement, to genomic sequencing, to digital infrastructure. And we’re delighted to feature an article from Sir David King on the strategies urgently needed to ensure climate repair.

For Accredited Investors in Singapore

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Please note that the sustainable strategies referenced in this report are not available to Private Clients in India. For more information, please contact your local office, or visit our Important information page.

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