Managed by sustainable investing fund managers Fiona Manning and William Scholes (both pictured), the fund was launched in April 2023 with a dual objective to deliver capital appreciation as well as measurable positive environmental and societal outcomes. The team’s differentiated investment strategy and research process look to identify companies that are enabling positive change in emerging markets.

Commenting on the announcement, Manning said: “We are delighted to be coming into 2025 having achieved two key milestones for the fund – the publication of our first Sustainability Report since the fund’s launch and the planned adoption of the FCA’s Sustainability Impact label.

“The measurement of impact is complex and still evolving. We are committed to working with companies and data partners to drive forward the measurement and delivery of positive impact in emerging markets. We will always be transparent about the challenges we face and will work to improve investor understanding of dual outcome sustainable products such as ours.”

Co-fund manager Scholes added: “Fiona and I are dedicated to finding those companies that we believe can help address unmet needs, solve a problem or push forward a global technological frontier. Our aim is to deliver strong returns for investors without compromising on franchise quality and draw more capital into long term investment in countries where it will go furthest towards achieving the ambitions of the United Nations’ Sustainable Development Goals.”

This story originated on our sister title, PA Future

“Today, if you are in emerging Asia and have good-quality governance, the valuation multiples you get are so much better. Any entrepreneur who truly wants to create value will adopt good governance standards,” he says.

“This is not a government initiative. It is happening because the markets are evolving. If you want to make money, your governance has to be of higher quality. We don’t see that as much in Europe, where there’s a lot more of a governmental push towards this.”

While this is good news for UK-based fund managers, there are additional hurdles to contend with, however, particularly further down the cap spectrum. Hicham Lahbabi, deputy head of Asian equities at Amundi, notes that although ESG is a key focus for many younger emerging market small caps, it can be difficult for western investors to determine whether they really are sustainable investments or not.

See also: Chinese equities: Will there be a sea-change in sentiment?

He says small-cap companies often do not have the same structure in place for areas such as corporate governance, or to formally implement plans for sustainability efforts such as a net-zero transition.

“Also, some of those names haven’t started their net-zero journey. For now, they have to be fully focused on their one product or their niche market, and can’t afford to allocate resources to something other than the business itself.

See also: ESG Out Loud: Interview with Eleanor Harry

“So, for investors, if ESG is something that is very important, smaller caps are at a disadvantage versus large caps because they still don’t have the resources internally to work on that and give investors as much comfort as large-cap companies can.”

Gaurav Narain, manager of the India Capital Growth fund, which as of November held 47.8% of its portfolio in small caps and 38.9% in mid caps, says regardless of governance policy, companies of varying sizes are recognising the importance of ESG in order to be seen as a market competitor.

To read more, visit the February edition of Portfolio Adviser Magazine

Kelshiker comes with 20 years’ experience in multi-asset and sustainable investing, having managed institutional assets and provided responsible investment advisory services at global firms. Prior roles include head of asset allocation and portfolio strategy at Standard Chartered Bank and senior portfolio manager at Allianz Global Investors.

He has worked on sustainable investment solutions and green finance projects for stakeholders including the University of Cambridge for the Commonwealth Secretariat, as well as the European Bank for Reconstruction and Development. Kelshiker is also a board member of Philanthropy Impact and a member of the Institutional Investors Group on Climate Change’s Just Transition Advisory Group. 

See also: Invesco launches defence, cybersecurity and AI ETFs

Richard Glenn, head of EMEA private markets distribution at Invesco, said: “We see more demand globally for impact-related investments, with investors increasingly searching for highly targeted and sophisticated solutions that can demonstrate transparent impact.

“Scaling these efforts around climate adaptation is essential to building resilience and ensuring a sustainable future for communities and economies facing the most severe impacts of climate change. 

“Kelshiker brings experience across multi-stakeholder environments and will play a key role in helping us engage with our clients on their financial and impact-orientated outcomes.”

Speaking about his appointment, Kelshiker added: “Invesco’s investment solutions are driving efforts to fund impact investing and climate adaptation at the scale needed to deliver transformative outcomes.

This story originated on our sister title, PA Future

Migo is a one-stop shop for opportunities in the closed-ended sector, and investment trust discounts have never been wider. But not every discount signals a true opportunity. For an investment to make it into our portfolio, there must be a clear catalyst driving that discount to narrow.

Two examples are the renewables and growth equity sectors. Our value-oriented approach means we previously avoided these areas due to the prevailing sky-high valuations. However, as these sectors sold off amid rising interest rates, opportunities have emerged.

Renewables have been heavily discounted since interest rates climbed in 2022. But the market overlooked the strength of the assets within many trusts and we saw a chance to acquire quality underlying assets at substantial discounts.

With increasing engagement from investors, boards are accelerating action to return capital to shareholders.

Whether via asset sales, merging with other trusts, or even full portfolio disposals to institutional investors, these are the sorts of catalysts we look for. For example, VH Global has a shareholder vote next year that could result in a wind-down. Aquila European Renewables shareholders similarly voted to return capital, and Atrato Onsite Energy’s board has just sold all of the trust’s assets to a Brookfield consortium, for much more than the prevailing share price.

Similarly, as interest rates rose, many of the growth equity trusts became labelled as ‘speculative’ or ‘risky’, despite their deep involvement in rapidly maturing industries. We believe trusts like these are well-positioned to benefit further from a more favourable environment, potentially lifting valuations and reviving the IPO market.

This activity marks a shift from previous cycles. Today, our strategy goes beyond the price – it is about identifying the events and trends that will deliver value from the underlying assets back to shareholders. Being an investment trust, Migo is also doing that, returning capital by buying back shares where appropriate.

Q: How do you see sustainable and ESG-oriented investing evolving from here?

The ESG conversation has thankfully moved beyond the buzzword phase we saw in 2020. Migo isn’t an ESG fund, but we’re still serious about engagement with investment trust boards – even more since our move to Asset Value Investors, one of the industry’s strongest advocates for responsible governance.

The pressure on boards to act in the best interests of shareholders has never been greater. This is indicative of where we are in the cycle, underscoring that robust governance and shareholder protection are essential.

Read the rest of this article in the December issue of Portfolio Adviser magazine

The annual report canvasses the views of 350 key decision makers at firms globally, gauging the extent to which they are building sustainability into their investment processes.

Among other notable trends, the findings suggest there is a gap between the statements investors are making on the importance of ESG factors and the actions they are taking.

See also: AIC: Trust managers rate healthcare as top sector for 2025

Some 88% of respondents said their firms have made more use of ESG data over the last year.

However, 92% believe it is not worth sacrificing short-term performance for the longer-term potential benefits of ESG investments, and 66% said that ESG considerations are likely to play less of a role in their investment choices over the coming years.

“The global investor community should be front and center of the drive for sustainability, but instead what we’re witnessing is worrying levels of apathy,” said Dr Matthew Bell, EY Global climate change and sustainability services leader.

“Many investors do make the right noises on climate change but there’s a real failure to walk the talk.

“In some ways, it’s understandable that investors are being passive – they are rightly worried about the many holes in company reporting, but what’s less forgivable is the apparent search for instant gratification when it comes to profitability.

“There’s a pervasive view that immediate gains matter more than the valuable slow-burn rewards from ESG investments; and despite the latest UN assessment highlighting the lack of action on climate change, and that global warming could pass three degrees Celsius by 2100, with devastating impacts, investors seem to be focused on shorter term economic cycles and geo-politics.”

Dissatisfaction with nonfinancial reporting

Just 55% of investors surveyed said that climate change would have any impact at all on their strategies, with focus instead placed on changes to the business cycle and possible trade restrictions.

Meanwhile, 93% claimed they are confident that companies will still meet their targets for sustainability and decarbonisation, while 62% say they are well equipped to assess companies’ climate change reports.

However, just 17% of those surveyed say they monitor changes in companies’ climate policies.

The report also suggested that investors are dissatisfied with the efforts companies are making to deliver nonfinancial reporting, with 80% suggesting reports need to highlight truly material statements more clearly.

See also: PwC: ‘The pressure is on’ for AI to start delivering results

Some 64% say there is a need for independent auditing of sustainability disclosures.

“If the world is to stand any chance of hitting net zero goals, we’ll need trillions of dollars of funding and that all hinges on having an investor community that takes sustainability seriously, treats it as a source of value rather than purely as a risk, and backs up words with actions,” EY’s Bell says.

“Done right, we could see an uptick in capital flowing into vital climate change projects, providing a much needed shot in the arm for climate finance and untold ripple effects in the battle against climate change.”

The move will see a reduction in the number of UK equity funds the business will run from five to three, and means the UK Sustainable Equity fund will no longer exist in its current form. Similarly, the firm’s UK Smaller Companies fund will also be merging with the UK Special Situations fund in the first half of 2025, subject to investor approval.

Launched in 2018, the Ninety One UK Sustainable Equity fund was designed as a strategy that contributed to a more sustainable future through investment in UK companies, as well as delivering outperformance of its benchmark over the long term. It is run by Matt Evans (pictured).

See also: M&G to adopt SDR label for Positive Impact fund

In a statement, Ninety One said: “We regularly review our funds to ensure that they continue to offer investors the very best of our long-term investment management expertise. We can confirm that the UK Sustainable Equity fund will be merging with the Global Sustainable Equity fund in the first half of 2025, subject to a favourable resolution passed by investors. 

“The receiving fund, which has a similar approach to sustainability and is supported by the same investment team, benefits from a wider range of investment opportunities geographically. Our broad Sustainable Equity capability remains strong and offers solutions used by a variety of institutional and advisor-led asset owners.”

Ninety One’s Global Sustainable Equity fund is co-managed by Stephanie Niven and Miles Hamilton, who have been running this fund since March 2022 and November 2023 respectively. The fund invests in companies across the globe, with its level of investment in the UK much lower than the UK Sustainable Equity fund. For example, at the end of October 2024, it had just 6.1% of its assets invested in UK-listed companies.

Evans will continue running the UK Sustainable Equity fund until the fund merges, and will then remain with the business, conducting research as part of the sustainable equity team.

See also: Ninety One Diversified Income promoted to Hargreaves Wealth List

Responding to the news, Hargreaves Lansdown decided to remove the Ninety One UK Sustainable Equity fund from its Wealth Shortlist, with Joseph Hill, senior investment analyst at Hargreaves Lansdown, adding that their conviction in the UK Sustainable Equity fund “has largely laid with its manager Matt Evans, who we think is a committed and passionate sustainable investor”.

Given the fund will no longer be available to invest in its current form in due course, or be managed by Evans, Hill concluded it was right to remove the fund from Hargreaves Lansdown’s Wealth Shortlist.

This story orginated on our sister title, PA Future

At SRI Services’ recent Good Money Week conference, fund group representatives shared the “back and forth” experience of applying for fund labels under SDR, describing how it has been extremely challenging to come up with the right disclosures – while at the same time not needing to change funds’ philosophies and processes.

See also: EFG Asset Management launches global impact credit fund

Panellist Therese Niklasson, global head of sustainable investment at Newton Investment Management, said it had been “tricky” going “back and forth with the regulator”, with difficulties seeing the goalposts the FCA had set out.

This latest guidance appears to be a response to such criticisms, with the FCA stating that SDR and investment labels are “a new regime without precedent, and so, naturally, market practice is still evolving”.

For both the ‘Sustainability Improvers’ and ‘Sustainability Focus‘ labels, the FCA included three separate examples of good practice in terms of stating the fund objective, the link between objective and outcomes, investment criteria, and policies and procedures to monitor performance.

The examples they give “are based on our [the FCA’s] experience of applications to date and are non-exhaustive but are intended to aid applicants as they prepare their documentation”. Additionally, the publication notes that many of the observations are relevant across all labels, not just the two it highlights.

See also: FCA issues warning notice to Crispin Odey

The FCA also included examples of poor disclosure practices that do not meet the SDR requirements, such as disclosing an asset selection process that does not link to the specified sustainability objective and aim of the product; no explanation and evidence as to why the scoring or threshold is appropriate for defining sustainability; and failure to disclose a manager override for asset selection where it exists.

Additionally, specifically for the ‘Sustainability Improvers’ label, this includes failure to disclose the types of evidence the manager relies upon to satisfy itself that assets have the potential to meet the robust, evidence-based standard; and short-term and medium-term targets missing or inconsistent with the long-term horizon over which the assets are expected to meet the standard of sustainability.

Reacting to the release, UKSIF’s CEO, James Alexander, said this should prove useful to firms creating these products: “We welcome the FCA’s publication of examples of good practice as firms seek to secure approval to use sustainable investment labels. UKSIF has consistently called for further guidance and clear examples of best-practice on certain aspects of the Sustainable Disclosure Requirements, including the labels, and we are pleased to see this confirmed by FCA.

“We hope to see the regulator build on this over time, including providing more detail on where firms may be falling short in their fund disclosures. We remain confident that in time the SDR can give retail investors greater confidence in their investment decisions on sustainability, while helping reinforce the UK’s position as a global leader in green and sustainable finance.”

See also: Generation next with Mirabaud AM’s John Kisenyi: Power play

Overstory Finance’s company director, Rebecca Kowalski, also welcomed “any practical guidance that can help with the speed and efficacy with which SDR and the labels can become a force for positive change”. 

“We have waited so long, and there have been many twists and turns. But it concerns me that regulation can cause people to wait until we have the consultation, or the final policy, or the interpretation, and then let that bed in. There really isn’t any time to wait.”

This article was first seen in our sister publication, PA Future

Working within a thematic strategy there are several structural themes that draw our attention. We are currently focused on US datacentre power demand, which is set to more than double by the end of the decade (50GW by 2030, up from 21GW in 2023). The renewables sector should benefit as hyperscaler companies like Microsoft, Google, Meta and Amazon have all made net-zero pledges, which will increase their demand for clean energy capacity.

We have also seen sharp rises in the rollout of utility scale solar production in states including Texas, Ohio and Florida resulting in an attractive investment opportunity.

Q: How do you see sustainable and ESG-oriented investing evolving from here?

We will start to see more impact-focused strategies as socially conscious generations (gen-Z and millennial investors) look to allocate their capital to strategies that aim to make a positive difference in the world.

See also: Generation next with Sarasin & Partners’ Tom Kynge: People skills are key

In ESG investing, we will see a less narrow, more nuanced approach to assessing companies, where fewer businesses are automatically thrown into the ‘penalty box’ and there is a greater effort by investors to collaborate, understand and partner with management, to improve their operations via engagement.

Access to relevant ESG and impact data underpins the efficacy of these approaches and, as such, we will see great improvements as these disclosures become more standardised across the marketplace.

Q: What will be different about the investment sector a decade from now?

The way we interact with data will be enhanced and soon we will be able to engage with visual analyses of trends more easily than crunching numbers in Excel. Future iterations of large language models will be trained on corporate datasets and will improve how we download, index and absorb relevant information.

This will increase efficiency for analysts and portfolio managers trying to understand the drivers of business models and creating forecasts.

Lastly, the demographic composition of the industry will become more diverse as larger numbers of women and ethnic minorities enter and progress through the profession.

Read the rest of this article in the October issue of Portfolio Adviser magazine

In Labour’s first Budget in 14 years, the government doubled down on its commitment to the National Wealth Fund and GB Energy, with chancellor Rachel Reeves saying the only way to get the economy growing again is to “invest, invest, invest”.

Below are the major announcements.

‘Modern industrial strategy’

Chancellor Reeves announced more details about the National Wealth Fund, with the aim to catalyse investment to drive the government’s modern industrial strategy to set out the sectors with the “biggest growth potential”.

This includes nearly £1bn for the aerospace sector, over £2bn for the automotive sector and up to £520m for a new Life Sciences Innovative Manufacturing fund.

Additionally, she said the government will protect government investments in research and development to “unlock these growth industries of the future”. The chancellor announced more than £20bn of funding, including at least £6.1bn to protect core research funding for areas such as engineering, biotechnology and medical science.

The government is committing to “making Britain a clean energy superpower”, Reeves said, and announced there will be a new, multi-year investment into carbon capture and storage, alongside the formation of 11 new green hydrogen projects, described as “among the first commercial-scale projects anywhere in the world”.

There will also be £3.4bn for a warm homes plan to increase energy efficiency in homes.

Details for the funding of GB Energy are set to revealed next year, and, overall, the government expects to spend £100bn in capital spending over the next five years.

Commenting on the UK Budget, Richard Lum, co-chief investment officer at Victory Hill Capital Partners, warned that “bigger isn’t always better” in the path to net zero: “Successive UK governments have focused on large-scale transition projects, and their planned investments in carbon capture and storage and green hydrogen, confirmed in the Autumn Statement, suggest our policymakers are following in their predecessors’ footsteps.

“While government support to de-risk this sort of huge investment has been impactful, these projects must not eclipse the pivotal role of mid-market developers. There are firms already delivering commercially viable, distributed solutions to bridge the gap between the UK’s energy needs and existing infrastructure, but meaningful government incentives are essential for them to thrive in the long term.”

Sophie Lawrence, stewardship and engagement lead at Greenbank said: “Given the urgency with which global action on climate change is needed, it is welcome to see clean energy investment feature as a core pillar of Reeves’ Autumn Budget.

“Investors have been clear for over a decade in their message that climate change presents a systemic risk to financial systems and that policy decisions which support an orderly transition to a low-carbon economy are essential if we are to avoid the worst economic, social and environmental impacts of climate change. Consistent policy signals are vital to give businesses and investors the confidence to invest in the clean energy transition. 

“However, it is important that the Government’s investment in carbon capture and storage (CCS) and hydrogen does not distract from investment in more sustainable solutions such as renewable energy or divert company efforts to decarbonise their business models. CCS and hydrogen should be reserved for the harder to abate areas of the economy rather than used to justify continued use of polluting technologies.”

Oil and gas windfall tax increase

Announced prior to the Budget, the government has increased the windfall tax on the profits oil and gas firms make in the UK, rising to 38% from 35% on 1 November until 31 March 2030.

However, Reeves said the government would remove the 29% investment allowance to ensure that the oil and gas industry can protect jobs and support the UK’s energy security, while maintaining the 100% allowances and the decarbonisation allowance

An analysis from Offshore Energy UK, published last month, asserted that the proposals to extend the windfall tax on the oil and gas sector “will deter the very investment needed across our energy landscape”, with CEO, David Whitehouse, commenting that the North Sea “is a strategic national asset and must be treated as such”.

“Windfall taxes extended on oil and gas producers when no windfall exists deter the very investment that we need across our energy transition,” he continued.

“While we use oil and gas, we must surely prioritise investment in our homegrown production, value in our economy, and our jobs.”

However, James Alexander, CEO of the UK Sustainable Investment and Finance Association, explained that this 3% increase would bring the UK in line with Norway, and could provide catalytic public investment to drive private capital into the UK’s energy transition.

“This is sensible financial planning for the future and is essential to deliver a just transition by creating jobs in the energy sector that will actually stand the test of time. North Sea oil and gas is finite and already dwindling, and since it’s traded on the global market it is subject to price shocks like those which caused the energy crisis.

“The government has had to hold firm in the face of relentless lobbying by oil and gas interest groups in order to put up the windfall tax. Oil and gas firms have consistently failed to invest in the transition, and as such are now increasingly being consigned to the past.”

Reporting to Alvise Munari, chief product officer, Mattison will lead the firm’s ESG and climate product development and business strategy, working closely with leaders across MSCI to drive innovation and scale throughout the ESG and climate product franchise and build integrated solutions designed to empower investors to remain at the forefront of sustainable investing.

See also: LGT Wealth Management promotes Stone to chief sustainability office

Mattison has over 20 years of experience in sustainable finance and previously served as president of S&P Global’s sustainability unit. He was also chief executive officer of climate analytics firm Trucost, which was sold to S&P Global in 2016.

Mattison has advised various financial institutions, companies and governments on how to integrate sustainability and climate change analysis into their decision-making, being a member of both the EU’s High Level Expert Group on Sustainable Finance and the People’s Bank of China’s Green Finance Taskforce. He is currently a senior advisor to the Taskforce for Nature-related Financial Disclosures.

“I am delighted to join MSCI at such a critical inflection point,” said Mattison. “Sustainability and climate change issues are reshaping the global investment landscape. MSCI is a leader in delivering high quality data and ratings, advanced analytics and client-led solutions to the world’s largest asset managers, asset owners and banks. I am looking forward to leading the next generation of innovation to deliver enhanced solutions and insights to clients.”

See also: Chikara Investments hires Ruffer analyst for Japan team

“We are thrilled to welcome Richard to MSCI as the leader of our ESG and Climate business,” added Munari. 

“Richard’s experience in sustainable finance, coupled with his proven track record in delivering innovative solutions, uniquely positions him to deliver on our commitment to helping investors meet their sustainability and climate goals. His leadership will not only drive our initiatives forward but also inspire new strategies that align with the evolving sustainable investment landscape.”

This article originally appeared in our sister publication, PA Future

The early preview of LCP’s Responsible Investment manager survey said out of the 119 investment managers – including portfolio managers, fund managers and asset managers – it engaged with, 57% believe the transition to net zero is likely to “be disorderly or fail”. This comes as the percentage of managers aiming for net zero across their assets has decreased. While 56% of managers working towards net zero said they are on track, 40% admitted that “it is hard to say” at this stage.

See also: Everyone Matters: Diverse thinking needed to address poor leadership

Further, training on responsible investment topics is not a priority for the managers surveyed. Over half of the investment managers (51%) reported their investment professionals receive less than five hours of training each year. In response, LCP urges managers to identify and address gaps in their transition plans to help ensure a smoother path to achieving net-zero targets. 

Despite this, there has been some progress. The percentage of managers working towards net-zero emissions for some of their assets has seen a 10% increase from LCP’s survey last year from 59% to 69%. Further, there has been some improvement in board oversight; 81% of managers now have someone at the board level responsible for overseeing ESG and stewardship, up from 67% in the 2022 survey. 

Sapna Patel, principal at LCP and lead author of the report, said: “There is a higher level of board oversight of responsible investment activity at investment managers now than there was in our previous survey. Crucially, this oversight must go hand in hand with sufficient training for those board members, and this has not improved from a low base last time.

“Responsible investment is a complex and rapidly changing field, so it’s important that investment professionals and board members with oversight responsibilities receive sufficient training to stay up to date and make informed decisions.” 

See also: CCLA mental health benchmark reveals limited progress over past year

Claire Jones, partner and head of Responsible Investment at LCP, added: “More investment managers are talking about net zero, either proactively or in response to asset owner demand. While it is encouraging to see many managers believe they are on track to meet their net-zero targets, we need to see more managers targeting net zero across all their assets under management. Every portfolio matters for achieving net zero, so all assets, not just some, must be considered. 

“Crucially, to protect portfolios from broader financial risks, these targets need to be backed up by actions that drive real progress toward net-zero emissions.”

This article originally appeared on our sister publication, PA Future

The not-for-profit financial services advocacy group concluded from its findings that corporate culture should remain “a top priority” across the sector. A further 99% of the 100 respondents said it is ‘extremely important’ or ‘very important’ that they work in a positive environment, while 47% of those surveyed chose the statement: “I like a workplace that values its people” from a list of six, as a top priority.

See also: CCLA mental health benchmark reveals limited progress over past year

What’s more, the survey found that respondents see sustainability as a “defining characteristic of corporate culture”. Approximately 96% of respondents believe that financial services companies have a critical role in limiting climate change and biodiversity loss, yet 61% are concerned the sector is not doing enough to tackle climate-related risks.

Diversity of thought

Elsewhere, inclusion and diversity are highly valued by employees. When asked the challenges that more diverse thinking would help their respective places of work, ‘poor leadership’ came out as the top answer, having been cited by 40% of those aged between 35-54 and 37% of those over the age of 55.

Similarly, approximately one-third of respondents cited a lack of diverse perspectives in decision-making as the biggest barrier to success.

The report stated: “While the financial services industry has placed a considerable focus on diversity and inclusion, the survey suggests that fostering diversity of thought – critical for effective workplace cultures – has fallen behind.”

See also: Generation next with Sarasin & Partners’ Tom Kynge: People skills are key

Pat Sharman (pictured), co-founder of Everyone Matters, said “companies need to walk the talk and stay true to their core values”.

“If they do, it will be reflected in a positive corporate culture, which will benefit everyone in the financial services workplace,” she explained. “Diversity of thought helps creative and critical thinking, which are essential future workplace skills as defined by the World Economic Forum.”