rathbone unit trust management limited rathbone greenbank … · 2016-08-11 · european sri...

Rathbone Unit Trust Management Limited

&

Rathbone Greenbank Investments

European SRI Transparency Code V3.0

Fifth Statement of Commitment

1 April 2016 to 31 March 2017

European SRI Transparency Code V3.0 (Feb 2013) - Rathbone Ethical Bond Fund

European SRI Transparency Code (V3.0, February 2013)

This submission is made on behalf of the Fund Management Company

Rathbone Unit Trust Management Limited (“RUTM”)

a subsidiary of

Rathbone Brothers Plc (“Rathbones”)

&

the Fund Management Company’s ESG research provider

Rathbone Greenbank Investments (“Rathbone Greenbank”)

a trading name of

Rathbone Investment Management Limited (“RIM”)

a subsidiary of

Rathbones Brothers Plc

Statement of Commitment

Sustainable and Responsible Investing is an essential part of the strategic positioning and behaviour of Rathbone Brothers Plc, the parent organisation of Rathbone Unit Trust Management and Rathbone Greenbank Investments. RUTM has been involved in SRI since 2002 and Rathbone Greenbank since 1997; both parties welcome the European SRI Transparency Code. This is our fifth statement of commitment and covers the period from 1 April 2016 to 31 March 2017. Our full response to the European SRI Transparency Code can be accessed below and is available in the annual report of the retail funds and on RUTM’s website (www.rutm.com).

Compliance with Transparency Code

Rathbone Unit Trust Management is committed to transparency and we believe that we are as transparent as possible given the regulatory and competitive environments that exist in the countries in which we operate. Rathbone Unit Trust Management meets the full recommendations of the European SRI Transparency Code.

31 March 2016

http://www.rutm.com/


1. General Information

1a Provide the name of the fund management company managing the fund to which this Code applies.

Company: Rathbone Unit Trust Management Limited 1 Curzon Street London W1J 5FB Manager: Bryn Jones Fixed Income Investment Director Telephone: 020 7399 0399 Facsimile: 020 7399 0057 Email: [email protected] Website: www.rutm.com

1b Describe the general approach of the fund management company with regards to how it takes environmental, social and governance (ESG) criteria into consideration.

While RUTM does not apply ESG criteria in the management of its range of ‘conventional’ unit trusts, in 2001, it became apparent that there was a market for a retail unit trust composed of ethically screened corporate bonds. In May 2002, RUTM launched the Rathbone Ethical Bond Fund (REBF), a fund investing in sterling-denominated bonds issued by companies or institutions which meet a defined set of ethical criteria. Rathbone Greenbank’s ethical research team works closely with REBF’s manager to ensure that only bonds issued by organisations screened in accordance with the fund’s published criteria are held within the fund. Further information about Rathbone Greenbank Investments and its approach to responsible investment is available at: http://www.rathbonegreenbank.com/

1b Is the fund management company approach towards ESG criteria part of its corporate social responsibility approach? Yes/No. If yes, insert a link to the company’s CSR policy.

RUTM is the fund management subsidiary of Rathbone Brothers Plc; as such, its policy with regard to CSR is covered by that of the parent group, details of which can be found at: http://www.rathbones.com/about-us/corporate-responsibility

Rathbone Brothers Plc is committed to the concept of socially responsible investing. RUTM incorporates the values of its parent company, whose statement on responsible investing is available at: http://www.rathbones.com/about-us/corporate-responsibility/socially-responsible-investing

European SRI Transparency Code 2013 V3.0 1. General Information

2. Approach to ESG evaluation of companies and countries 3. Fund Management Process 4. Controls and ESG reporting

5. Additional

mailto:[email protected]


http://www.rathbonegreenbank.com/

http://www.rathbones.com/about-us/corporate-responsibility

http://www.rathbones.com/about-us/corporate-responsibility/socially-responsible-investing


1b Has the fund management company signed the Principles for Responsible Investment? If yes, please insert the link to the answer to the PRI questionnaire.

No.

1b If not, please explain why.

RUTM is the fund management subsidiary of Rathbone Brothers Plc; Rathbones demonstrated its support for responsible investing by becoming a PRI signatory in September 2009. Public disclosure of responses to the PRI questionnaire will be made from 2014 onwards.

1b Is the fund management company a signatory or a member of other international and/or national initiatives supporting SRI practices? Please answer if you deem this information to be useful.

Yes – RUTM is a signatory to the UK Stewardship Code. Rathbones has been a signatory to CDP (Carbon Disclosure Project) since 2006 and to its Water Disclosure programme since 2010. Rathbones is also a Living Wage Employer. Rathbone Greenbank is a long-standing member of the UK Sustainable Investment and Finance Association (UKSIF) and the Ecumenical Council for Corporate Responsibility (ECCR), as well as being a founding endorser of the Forest Footprint Disclosure Project (now CDP Forests Program). Rathbone Greenbank became a CDP investor member in March 2015 and a member of the Institutional Investors Group on Climate Change (IIGCC) in May 2015.

1b Has the fund management company established an ESG engagement policy? If yes, describe the policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy.

No.

1b If not, please explain why.

RUTM itself does not have a specific ESG engagement policy; however, Rathbone Greenbank (the fund’s ESG research provider) does have such a policy and cites REBF’s corporate bond holdings when introducing itself to companies for engagement purposes. As such, the engagement strategy and objectives of the fund manager are aligned with those of Rathbone Greenbank as published here: http://www.rathbonegreenbank.com/research-and-publications/engagement

1b Has the fund management company established a voting policy? If yes, describe the policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy.

RUTM’s voting activity is covered by the policy and recommendations of RIM’s Corporate Governance Committee, which is advised by Institutional Shareholder Services (ISS). In addition, RUTM has published its own statement for meeting its obligations as a signatory to the UK Stewardship Code: http://www.rutm.com/downloads/general/uk-stewardship-code-11-2010_1311.pdf

http://www.rathbonegreenbank.com/research-and-publications/engagement

http://www.rutm.com/downloads/general/uk-stewardship-code-11-2010_1311.pdf


1b Describe how the fund management company or the group contributes to the promotion and the development of SRI.

Individual managers within RIM, the investment management arm of RUTM’s parent company, Rathbone Brothers Plc, have for many years been involved in managing segregated portfolios for private clients, trusts and charities with mandates based on strong religious beliefs or ethical concerns. Since 1997, RIM has incorporated an ethical investment team offering a dedicated service for responsible investors. In 2004, this unit was formally rebranded as Rathbone Greenbank Investments and now manages segregated portfolios on behalf of private clients, trusts and charities with funds under management of £761 million

1. As at 31 March 2015, this team

comprised 14.5 full-time equivalent (FTE) employees dedicated to the application of social, environmental and ethical principles in the management and screening of client portfolios. The fund’s manager regularly promotes SRI through interviews with the financial press and in corporate presentations and road shows. Rathbone Greenbank promotes the development of SRI by:

producing bi-annual newsletters on sustainable investment for clients, IFAs & media;

producing a quarterly e-bulletin for distribution to IFAs, professional intermediaries & media;

hosting annual investor days on a sustainability theme;

participating in and hosting seminars and workshops (Good Money Week, Ethical Finance Conference, UN Global Compact Working Group on Corruption, Principles for Responsible Investment (PRI) webinar on corporate tax);

contributing articles and interviews to mainstream & SRI media (Financial Times, Investment Adviser, Your Money, Blue & Green Tomorrow, Responsible Investor);

providing financial support for the work of other parties (Ecumenical Council for Corporate Responsibility, Ethical Investors’ Ethical Fund Directory, sriServices’ Fund EcoMarket);

contributing to the development of government and NGO policies, surveys and reports (Transparency in Supply Chains (TISC) legislation as part of the Modern Slavery Act 2015, Business Benchmark on Farm Animal Welfare, Access to Nutrition Index);

contributing to stakeholder panels (The Chartered Institute of Personnel and Development (CIPD) survey on Human Capital Management, member of Social Stock Exchange Admissions Panel).

1c Briefly describe the SRI fund range.

Name of the fund(s): Rathbone Ethical Bond Fund ISIN code(s): GB0030957020 (R-Class, Income Units) GB0030957137 (R-Class, Accumulation Units) GB00B7FQJT36 (I-Class, Income Units) GB00B77DQT14 (I-Class, Accumulation Units) Legal form: Unit Trust (UCITS Scheme) Fund domicile: United Kingdom Inception date: 14 May 2002 Rathbone Ethical Bond Fund is currently the only fund managed by RUTM which is screened according to SRI principles. Details of other literature relating to the fund can be found at: http://www.rutm.com/pi/fund-rathbone-ethical-bond-fund.aspx (for Private Investors) http://www.rutm.com/pa/fund-rathbone-ethical-bond-fund.aspx (for Professional Advisers)

1c Describe/list your SRI products and the specific resources allocated to your SRI activities.

1 As at 31 December 2015

http://www.rutm.com/pi/fund-rathbone-ethical-bond-fund.aspx

http://www.rutm.com/pa/fund-rathbone-ethical-bond-fund.aspx


Date since when the fund management company has internal teams and date of inception of the first SRI fund: RUTM was established in 1999 following the rebranding of unit trusts inherited when Rathbones acquired Laurence Keen Unit Trust Management in 1995. REBF (its first SRI fund) was launched on 14 May 2002. Brief description of the “SRI organisation” (e.g. research, analysts, portfolio management, corporate governance teams): The fund is managed by Bryn Jones (Rathbones’ Fixed Income Investment Director), assisted by Noelle Cazalis (Assistant Fund Manager). SRI research is provided by Rathbone Greenbank’s ethical research team comprising Perry Rudd (Head of Ethical Research), Matt Crossman (Ethical Research & Corporate Engagement; Group Corporate Governance Manager) and Kate Elliot (Ethical Researcher). Number of people who are directly involved in the analysis and/or portfolio management activities: Five. External resources used for ESG analysis and engagement/voting (number of providers, names, service provided and links to their website): The fund’s research provider, Rathbone Greenbank, conducts core ethical screening and ESG analysis on behalf of the fund. This research team uses a wide range of sources to inform its views on corporate ESG performance, including:

Company annual report & accounts

Corporate responsibility/sustainability reports & websites

Company meetings

Non-governmental & not-for-profit organisations

Industry groups

Sell-side research from ESG analysts

Specialist SRI conferences & seminars/webinars

Financial news monitoring, including M&A activity

Specialist SRI media publications

In addition, as of June 2015, Rathbone Greenbank’s ethical research team has had access to MSCI’s ESG Manager platform including its Business Involvement Screening, Impact Monitor and ESG Ratings tools.

RUTM personnel are members of Rathbones’ Corporate Governance Committee which receives advice on voting on corporate governance issues (primarily relating to executive remuneration, acceptance of report & accounts and auditor fees & independence) from Institutional Shareholder Services Inc. (ISS) www.issgovernance.com. As voting rights do not ordinarily attach to corporate bonds, RUTM does not engage in this activity in the context of the fund in question.

1d Describe the content, frequency and resources allocated/used by the fund management company to inform investors about the ESG criteria taken into account.

A brochure describing the Ethical Processes & Systems, Investment Criteria and Investment Strategy of the fund is updated annually and is available at: http://www.rutm.com/pa/fund-rathbone-ethical-bond-fund.aspx

http://www.issgovernance.com/



Annual & Interim Manager Reports (for periods ending 30 April & 31 October, respectively) are available in both short and long versions. Contents include manager’s report, ethical report (long version), full list of holdings (long version) and ten largest holdings (short version).

1e Provide the name of the fund to which this Code applies and its main characteristics.

Fund name: Rathbone Ethical Bond Fund Asset class: Corporate bond Geographical focus: Global ISIN code: GB0030957020 (Income Units) GB0030957137 (Accumulation Units) GB00B7FQJT36 (I-Class, Income Units) GB00B77DQT14 (I-Class, Accumulation Units) Legal form: Unit Trust Risk class (KIID): 3 (lower risk = 1, higher risk = 7) Sector of theme focus: The fund does not explicitly focus on a particular sector or theme; it invests predominantly in sterling-denominated corporate bonds, as well as some supranationals. SRI strategy: Fund applies an Exclusion of Holdings approach (as defined by Eurosif) in combination with positive screening (bond issuers must demonstrate at least one positive attribute).

1f What is this fund trying to achieve through taking into account ESG criteria?

The objective of the fund is to provide a regular, above average income to retail and institutional clients by investing in a relatively low-risk collective of bonds and bond market instruments that meet strict ethical and financial criteria.

1f If part of the fund assets is invested in unlisted organisations with high social, community or impact investing relevance, please specify.

The fund is predominantly invested in listed corporate bonds, several of which are highly relevant to social, community or impact investing (e.g. charities, housing associations, sustainable transport, development banks). The following unlisted holdings

represented 0.17% of the fund’s portfolio

as at 31 March 2016:

GLASGOW TOGETHER CIC 4% Bonds 31/08/2020 GREENWICH LEISURE LTD 5% Bond 31/10/2018 MIDLANDS TOGETHER 4% Bond 30/10/2018 SOUTH BRISTOL SPORTS CENTRE 7% Ser A Bonds 31/01/2023 THERA GROUP 3.5% MTN 28/04/2018 THERA TRUST PLC 5.5% Bonds 31/12/2020

2. Approach to ESG evaluation of companies (and countries)

2a What fundamental principles underlie the ESG research methodology?

In general terms, the fund defines ESG as an investment strategy which believes that long-term growth can be achieved by companies which conduct their business and apply capital responsibly, giving full consideration to a range of social, environmental and ethical issues as they might affect interested parties (employees, customers, share/bond holders, etc) as well as wider society.

The fund applies negative screening criteria to exclude from its universe any issuers of corporate bonds in breach of any of the exclusion criteria, before ensuring that issuers satisfy at least one of the fund’s positive criteria requirements. We believe that the fund offers the opportunity to invest in a fixed income fund with high quality investment grade bonds while applying a broad range of both positive and negative screening criteria that will appeal to consumers with ethical concerns.


Stakeholders are not actively consulted; unit holders and others (e.g. professional advisers) are encouraged to comment on the fund’s holdings, the research process and how they view the application of its ethical criteria. For exclusion strategies: please list the exclusions used by the fund. Also list the principle underlying the rationale to choose these exclusion criteria. Exclusions

The fund shall exclude bonds issued by companies wholly or predominately involved in the following activities:

Alcohol: Manufacture of alcoholic beverages.

Animal testing: Provision of animal testing facilities, or the use of animals in the discovery or development of pharmaceutical or healthcare products; manufacture or retail not adopting a fixed cut-off date policy with regard to the testing of cosmetic or household products (and their ingredients) on animals.

Armaments: Manufacture or sale of strategic weapon systems, ordnance or combat vehicles.

Environmentally unsustainable or high-impact activities: Mineral or aggregate extraction, fossil fuel exploration and production, agrochemical production, production of genetically modified seeds or foodstuffs; manufacture or sale of timber products from non-sustainable sources; manufacture of vehicles based on hydrocarbon fuels. Also, companies with convictions for serious or persistent pollution offences.

Gambling: Operation of betting or gaming facilities (including casinos, betting shops and internet-based services).

Nuclear power: Construction of nuclear power plants, generation of electricity from nuclear power, or handling or reprocessing of radioactive waste.

Pornography: Production or sale of pornographic material.

Tobacco: Manufacture of tobacco or tobacco products.

As stated above, the screening criteria applied by the fund have been chosen on the grounds that they will appeal to a broad range of consumers with ethical concerns.

2b What internal and external resources are used to carry out this research?

The fund uses the services of Rathbone Greenbank’s in-house research team to carry out its ESG research. This team comprises three staff (2.6 FTE) who have over 30 years’ combined experience in conducting analysis into companies’ ESG policies and performance: Perry Rudd (Head of Ethical Research), Matt Crossman (Ethical Research & Corporate Engagement) and Kate Elliot (Ethical Researcher) have been involved in ESG analysis for 16, 11 and 8 years respectively. Each is responsible for a number of UK FTSE 350 sectors, analysing the performance of their constituent companies according to the team’s own thematic ‘peer groups’ (e.g. alternative energy, sustainable transport, hazard detection & protection, sustainable property development, social housing etc).

Describe the general information used to carry out the ESG research: internal analysis, ESG rating agencies, other external sources of information.

The team uses a wide range of research sources (as outlined in 1c above), to maintain its own proprietary research database. As well as analysing key performance data published by companies themselves, the team subscribes, or has access, to:

Benchmark surveys and reports published by a wide range of NGOs and NFPs (e.g. CDP, BankTrack, Business Benchmark on Farm Animal Welfare, International Chemical Secretariat, Ecumenical Council for Corporate Responsibility, Extractive Industries Transparency Initiative, Labour Behind the Label, Transparency International, Freedom


House, Tax Justice Network, NextGeneration)

Sell-side research analysts (e.g. Bank of America Merrill Lynch, Société Générale, HSBC)

SRI conferences & seminars/webinars (e.g. UKSIF, PRI Clearinghouse, Chatham House)

SRI specialist publications (e.g. Corporate Citizenship Briefing, ENDS Report, Responsible Investor, Sustainable Business, Ethical Performance, Ethical Consumer, Resurgence/The Ecologist)

Financial & company news (FactSet Research Systems)

MSCI ESG Manager

2c Which ESG analysis criteria are used?

The fund’s ESG criteria are defined in the Rathbone Ethical Bond Fund investment criteria section of the fund brochure, available under the Professional Advisers section at: http://www.rutm.com/pa/fund-rathbone-ethical-bond-fund.aspx In addition to the exclusion criteria referred to above (2a), the fund applies also positive selection:

Positive aspects

To qualify for inclusion in the fund’s universe, companies issuing bonds should demonstrate progressive or well-developed practice or policies in one or more of the following key areas:

Corporate community investment: Long-term involvement in programmes of benefit to the community, either via cash donations or gifts in kind (e.g. staff time, use of buildings or office facilities) or membership of benchmarking groups.

Employment: Commitment to workplace diversity and equal opportunities; additionally they could facilitate employee work/life balance by offering flexible working arrangements, carers’ leave and/or childcare facilities.

Human rights: Compliance with local and national standards in accordance with minimums set by the International Labour Organization and United Nations Universal Declaration of Human Rights. Alternatively, companies may implement their own codes of conduct to ensure compliance with local laws covering child labour, working conditions and health & safety.

Management of environmental impacts: Publication of a clearly defined policy for managing environmental impacts. This should include monitoring and reporting on progress against key performance indicators in areas such as waste disposal and recycling, consumption of resources, emissions to air, and discharges to land and water.

Provision of beneficial products and services: Provision of products or services that offer social or environmental benefits. Such activities might include designing or implementing cleaner or more efficient industrial processes; enabling compliance with health and safety legislation; supplying educational products or services; providing waste recycling or acceptable forms of waste management; providing social housing; manufacturing, installing or operating renewable energy infrastructure; building or operating sustainable transport systems.

Criteria do not vary according to sector, geographical zone or type of company.

2d What is your ESG evaluation methodology (how the investment universe is built, rating system etc.)?

Application of the fund’s ethical criteria is carried out by Rathbone Greenbank’s ethical research team, which maintains a database of company profiles covering predominantly UK FTSE 350 equities as well as selected overseas stocks.



Given the significant overlap between constituents of this database and the fund’s investable universe (defined as the constituents of the iBoxx Index of sterling-denominated corporate bonds), this research is applicable in the context of the fund’s ethical criteria as these broadly align with the criteria described in Rathbone Greenbank’s own private client Ethical Questionnaire. Companies are assessed against 14 positive and 19 negative top-level social and environmental criteria, which in turn respectively comprise a further 140 and 105 separate sub-criteria. Ratings are assigned on a scale of 1-3 for sub-criteria (each weighted for relevance according to the company’s sector in terms of its social and/or environmental impacts) and a cumulative score is then derived for each of the top-level criteria, again on a scale of 1-3. Where bond issuers are not covered by Rathbone Greenbank’s own equity or corporate bond research, separate analysis is carried out using the same methodology to determine whether it is appropriate for issuers to be approved for inclusion in the fund’s universe. While this detailed methodology is applied with respect to all companies screened by the research team (for whatever purpose), it is simplified when applied to the fund’s universe as the fund’s ethical criteria require only a straightforward ‘Yes/No’ evaluation when considering if an issuer is in breach of any of the exclusion criteria, or meets any of the positive selection attributes.

2d Describe the ESG evaluation system and how it is built by explaining how the various ESG criteria are articulated.

To achieve consistency of rating, companies are assessed on both a bottom-up (looking in detail at the specific merits of their individual activities and how they address ESG issues) and a top-down approach (evaluating this performance in comparison to their peers in terms of the range of ESG issues covered and quality of response).

2d If appropriate, provide an example.

The fund has holdings in a wide range of corporate bond issuers from institutions ranging in size from major global banks to UK housing associations. All are required to demonstrate that they do not breach any of the fund’s exclusion criteria (2a), while demonstrating at least one positive attribute (2c).

2e How frequently is the ESG evaluation reviewed?

ESG criteria are defined and reviewed with reference to the fund’s ethical committee which comprises three senior Rathbone Greenbank personnel. This committee meets once a year with the fund management company as part of the fund’s annual review process. Any proposed changes to ESG criteria would be published in the subsequent annual report. Comments would be invited from investors; if none are received, then the changes would be implemented. Changes to the fund’s ethical criteria will then be communicated through the fund’s annual report.

2e If appropriate, explain if the methodology has changed in the past 12 months and the nature of the key changes.

There have been no changes to the methodology in the past 12 months.

3. Fund management process

3a How do you take into account ESG criteria when defining the universe of eligible investments?

The fund manager will first identify the corporate bonds that represent an attractive

investment proposition.


Companies issuing these bonds will then be screened by Rathbone Greenbank’s ethical research team in accordance with the fund’s ethical criteria (see 2a and 2c above).

Issuing companies involved in any activity that falls into the categories outlined by exclusion criteria (see 2a above) will not be considered for inclusion in the fund universe.

Issuing companies demonstrating well-developed policies and practices in at least one of the positive areas (see 2c above) will be included in the fund’s universe provided that they do not have any exposure to areas of negative concern.

Companies identified as being suitable at this stage will then be subject to the consensus approval of the fund’s ethical committee which comprises three senior members of the Rathbone Greenbank team.

An annual review meeting for the fund will be held involving the research team, the fund manager and representatives from Rathbone Greenbank and RUTM. The portfolio, criteria, investment process and research process are all reviewed and criteria and portfolio content will be confirmed (or not).

3a If appropriate, describe the eligibility threshold and the resulting level of selectivity.

Not applicable.

3b How do you take ESG criteria into account when building the portfolio?

The process for taking ESG criteria into account when building the portfolio is identical to that described in question 3a above for defining the universe of eligible investments.

Bond issuer identified by investment team

Issuer screened by

Rathbone Greenbank ethical research team

Issuer rejected if any

negative criteria contravened

Approved/rejected for investable universe

Reviewed by ethical

committee

Issuer meets at least one positive criterion


3b Has the fund divested from securities based on ESG criteria over the past 12 months?

No.

3b If applicable, state where you provide information on divestments occurred in the past year on the basis of ESG criteria?

Not applicable.

3b If appropriate, explain how potential ESG weightings are defined and describe your treatment of companies that are not subject to an ESG analysis.

Not applicable – all companies within the fund are subject to ESG analysis.

3c Does the fund have a specific ESG engagement policy?

No – the fund itself does not have a specific engagement policy. However, Rathbone Greenbank’s ethical research team, which implements the fund’s ethical screening policy, regularly engages with companies on many issues, including those whose bonds are held within the fund. The team will cite this fact when approaching companies to request action, information or meetings.

3c Please explain what you mean by Engagement.

Engagement forms a key part of Rathbone Greenbank’s approach to responsible investment:

As a means of addressing direct concerns about a specific company issue or area of performance.

As a means of encouraging best practice, giving internal momentum for positive change within companies.

We define ‘engagement’ as the process whereby dialogue is entered into by investors with a company, or organisation, as a means of improving its behaviour with regard to environmental, social or governance policies and practices. In engaging with a company, Rathbone Greenbank will adopt some or all of the following methods:

Formal and informal correspondence or meetings with company representatives.

Collaboration with other members of the SRI community, e.g. through initiatives such as the PRI Clearinghouse.

Voting on Annual General Meeting (AGM) resolutions; attending AGMs to ask questions; using nominee shareholdings to table resolutions.

Engagement will be conducted in an open and constructive way and in a spirit of longer term partnership. It will be entered into on the basis of corroborated evidence or research which, in our opinion, is of a rigorous and independent nature.

3c Describe how you select the companies/themes for Engagement activities and the impact on the portfolio management of the fund.

The following factors will guide the issues chosen for engagement:

Focus will be on companies where holdings managed by Rathbone Greenbank investment managers are significant or widely-held, and issues are therefore material to clients.

Detailed engagement on a focused range of issues is preferred.

Rathbone Greenbank will favour engagement on those issues where it has particular expertise or where positive outcomes are clearly identifiable.


3c Who undertakes Engagement on behalf of the fund (internal and/or service providers)?

Where appropriate, engagement activity is undertaken by Rathbone Greenbank’s ethical research team. This will primarily be on behalf of its own private clients, a significant number of whom are also unit holders in the fund. Where corporate bond holdings in the fund overlap with Rathbone Greenbank’s equity holdings, the team will engage with companies on behalf of all concerned parties. Matt Crossman is the Rathbone Greenbank ethical research team member with responsibility for corporate engagement as well as acting as Rathbones’ Group Corporate Governance Manager. He is has access to reports and services provided by ISS with regard to RIM’s 200 largest holdings and is responsible for coordinating action among the Group’s investment managers..

3d Does the fund have a specific voting policy integrating ESG criteria?

No – the fund is a corporate bond fund; as such, voting rights will not ordinarily attach to its underlying holdings.

3e Does the fund engage in securities lending activities?

No.

3f Does the fund use derivative instruments?

No.

3g Is a share of the fund invested in unlisted entities pursuing strong social goals?

Yes – please see 1f above.

3g If yes, please provide a brief description of the objective(s) of this investment, in no more than one or two sentences.

The fund has six holdings in five unlisted entities (as at 31 March 2016):

Social enterprise managing leisure & library facilities (Greenwich Leisure)

Social enterprise employing ex-offenders in property refurbishment (Midlands Together and Glasgow Together)

Housing and support for adults with learning disabilities (Thera Trust)

Social enterprise not-for-profit managing leisure facilities (South Bristol Sports Centre)

The fund’s objective in investing in these entities is to secure a sustainable source of income for the fund’s investors while at the same time supporting organisations looking to raise finance for a particular social purpose. To promote the work of its social investments, the fund produces regular updates on their activities and visits made by the fund’s manager to see the work of their various projects at first hand.

4. Controls and ESG reporting

4a What internal/external control procedures are in place to ensure the compliance of the portfolio with the ESG rules defined in section 3 of this Code?

At the time of investment, the fund manager is required to have clear approval from the ethical committee. This is complemented by a review of all holdings prior to the annual review meeting. The portfolio is open to public scrutiny: comments and questions are invited on any of the holdings in the portfolio.


4a State who is carrying out the controls, their frequency and within which timeframe the fund have to comply should a breach be detected.

The fund’s holdings are monitored by Rathbone Greenbank’s ethical research team on a weekly basis and reviewed in the light of any relevant news, merger and acquisition activity or findings from ongoing company analysis. A full review of the fund’s eligible investment universe is carried out an annual basis ahead of the annual review meeting. Issuers of new bonds which are suitable for investment are investigated as requested by the fund’s manager and are then subject to the fund’s ethical process. Rathbone Greenbank’s ethical research team conducts reviews of its ethically themed ‘peer groups’ on a rolling basis and looks to update all of its in-depth company profiles on a 12-18 month cycle. Divestments are very uncommon: if the activities of an issuer change, so that a bond is no longer suitable for the fund, the fund’s manager would normally seek to sell the holding within three months. If the bond is particularly illiquid and selling is difficult, the manager can take up to six months. If the bond is within two years of redemption, it can be held to maturity if the fund manager believes selling it earlier would be prejudicial to the overall performance of the fund.

4b Please list all public media and documents used to inform investors about the SRI approach to the fund, and include links as appropriate:

Company corporate responsibility: http://www.rathbones.com/about-us/corporate-responsibility

Socially responsible investing at Rathbones: http://www.rathbones.com/about-us/corporate-responsibility/socially-responsible-investing

For detailed fund holdings (Manager’s Report), Fund Fact Sheets, KIID and other fund literature (including the Fund Brochure and this submission), please see the ‘Downloads’ section on the following pages: http://www.rutm.com/pi/fund-rathbone-ethical-bond-fund.aspx (for Private Investors) http://www.rutm.com/pa/fund-rathbone-ethical-bond-fund.aspx (for Professional Advisers)

Examples of ethical case studies of holdings within the fund can also be found under the above sections: http://www.rutm.com/downloads/fund-related/sales-aid-ethical-bond-5-2013_2235.pdf

ESG analysis provider: http://www.rathbonegreenbank.com/

5. Additional

5 If applicable, specify the amount of donations and the percentage of management fees that the fund gave to charities in the last year.

None.

http://www.rathbones.com/about-us/corporate-responsibility

http://www.rathbones.com/about-us/corporate-responsibility/socially-responsible-investing

http://www.rutm.com/pi/fund-rathbone-ethical-bond-fund.aspx


http://www.rutm.com/downloads/fund-related/sales-aid-ethical-bond-5-2013_2235.pdf

http://www.rathbonegreenbank.com/


ABOUT EUROSIF The European Sustainable Investment Forum (Eurosif) is the leading European membership association whose mission is to develop sustainability through European financial markets. Eurosif works as a non-for-profit partnership of the national Europe-based national Sustainable Investment Forums (SIFs) with the support and involvement of Member Affiliates. Eurosif Member Affiliates include a range of organisations covering the value chain of the sustainable investment industry, from institutional investors, asset managers to financial services providers, ESG analysis firms, academic institutes and NGOs. Eurosif speaks authoritatively and broadly on SRI (sustainable and responsible investment) issues. The main activities of Eurosif are public policy, research and creating platforms for nurturing sustainable investing best practices. For more details, please see www.eurosif.org. National sustainable investment forums in Europe to date include:

• Belsif*,Belgium • Dansif, Denmark • Finsif, Finland • Forum Nachaltige Geldanlagen* (FNG) e.V., Austria, Germany and Switzerland • Forum per la Finanza Sostenibile*(FFS), Italy • Forum pour l’Investissement Responsable* (FIR), France • Norsif, Norway • Spainsif*, Spain • Swesif*, Sweden • UK Sustainable Investment and Finance Association* (UKSIF), UK • Vereniging van Beleggers voor Duurzame Ontwikkeling* (VBDO), the Netherlands

*Member of Eurosif For further information on Eurosif or more details on the European SRI Transparency Code, please look at our website, www.eurosif.org and contact Eurosif at +32 (0)2 27414 35 or by email at [email protected]. Eurosif A.I.S.B.L. 331, rue du Progrès, 1030 Brussels, Belgium Tel. : +32 (0)2 274 14 35 www.eurosif.org Follow us on: www.twitter.com/Eurosif Disclaimer – Eurosif does not accept responsibility or legal liability for errors, incomplete or misleading information provided by signatories in their responses to the European SRI Transparency Code. Eurosif does not provide any financial advice nor endorse any specific funds, organizations or individuals.

The European SRI Transparency logo signifies that Rathbone Unit Trust Management Limited commits to provide accurate, adequate and timely information to enable stakeholders, in particular consumers, to understand the Socially Responsible Investment (SRI) policies and practices relating to the fund.

Detailed information about the European SRI Transparency Guidelines can be found on www.eurosif.org, and information of the SRI policies and practices of the Rathbone Ethical Bond Fund can be found at: www.rutm.com.

The Transparency Guidelines are managed by Eurosif, an independent organisation. The European SRI Transparency Logo reflects the fund manager’s commitment as detailed above and should not be taken as an endorsement of any particular company, organisation or individual.

http://www.eurosif.org/


mailto:[email protected]


http://www.twitter.com/Eurosif



rathbone unit trust management limited rathbone greenbank … · 2016-08-11 · european sri...

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