report: soft commodities amity insight final

8/12/2019 Report: Soft Commodities Amity Insight Final

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2 Amity Insight January 2014

Soft Commodities: the Invisible Yarn that Binds the World

By Neville White

Senior Socially Responsible Investment Analyst

This Amity Insight focuses on one of the key components of the global economy:

soft commodities.

Recently, Tesco publicly acknowledged that 28,500 tonnes of food within its supply chain went to waste,

in production, in distribution, in stores and in consumer homes. It was a revealing statement that helped

throw a spotlight on the critical, but slightly mysterious, way in which food is delivered to our supermarketshelves and often wasted. Tesco revealed that between production and consumption, nearly 40% of

production ends in the bin including 68% of all bagged salads and 20% of all bananas.1This is consistent

with US figures that suggest as much as 40% of food produced is never eaten, wasting $165bn of edible

food each year.2

This Amity Insight examines how soft commodities are produced and traded. Which powerful

organisations dominate and control the global trade in raw commodities coffee, cocoa, palm, sugar,

cotton etc. and what, if any, are the ethical issues responsible investors need to be aware of. We also

take a brief look into the exotic history of trading, and profile some supply chain case studies sugar,

coffee and cotton to show just how complex they are.

In our Amity Insight Hungry Planet we illustrated how the pressure is on to feed an expanding populationforecast to hit 7bn by 2050.3Key to meeting this demand will be delivering increasing efficiencies throughout

the supply chain and eradicating the levels of waste hinted at by Tesco. We therefore examine how some

companies are taking control of the supply chain, eliminating the need for complex arrangements with

middlemen and sourcing direct from farmers.


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Amity Insight January 2014 3

A Short History of Commodity Trading

Commodities Make the News

The earliest evidence for the trade in commodities can be

traced to ancient China and Sumer (Southern Mesopotamia).

The Sumerians first used tokens sealed in clay vessels to

represent items promised, whilst Japanese traders issued

notes to raise funds to offset seasonal availability of rice.

In time these embryonic mechanisms became a standard,

understood form of currency. Commodity trading began in

earnest in the 17th century as part of the great age ofmaritime discovery and exploration. The sea route to India

brought exotic goods to receptive European markets, whilst

the spice trade brought vast wealth to the Spanish empire.

Over time, regulation was introduced to control supply, for

instance crown-fixed pricing in Spain that regulated trade in

pepper, and the establishing of the East India Company by

Royal Charter in 1600, with its exclusive right to trade in

cotton, silks, indigo, dye, salt and opium.

East India House c.1800, painted by Thomas Malton

Whilst the trade in commodities may not be as newsworthy

on a day-to-day basis as other business events, market

shocks still make the news, given the importance ofcommodities in everyday life. Soft commodities are prone

to price volatility owing to climatic events, disease and poor

harvests. A poor harvest will result in supply shortages and

consequent increases in the price of the raw material that goes

into food production. When supermarkets raise prices, it is

usually to reflect the increase in the cost of raw materials.

Traded commodities are usually defined as either hard or

soft. This Amity Insight is concerned only with soft

commodities, representing the major agricultural (and cattle)

futures markets corn, wheat, soya, cocoa, coffee, sugar,

palm and cotton. Hard commodities include energy (oil, gas,ethanol, uranium), base metals (aluminium, copper, nickel, tin,

lead, zinc), precious metals (gold, silver, palladium, platinum)

and bulk commodities (iron, coal).


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Commodities are goods that have a price wherever they are

traded. They are the building blocks of the global economy and

the invisible yarn that binds the world. A commodities market

facilitates trading in each commodity in one of three ways:

nSpot market where commodities are bought and sold

for immediate delivery

nFutures market where an obligation to buy or sell at

a given price in the future is agreednOptions market where an option to buy or sell is

purchased or sold.

To be traded, commodities generally meet standard criteria

of tradability, deliverability and liquidity. Unlike the energy

and metals market, agricultural soft commodities can be

more price-volatile. This is because:

nOften, the largest reserves are in politically

volatile territories

nAgricultural commodities are susceptible to climate,

environmental impact and perishability

nSome commodities are not abundant, therefore trading

may become illiquid and volatile

nSome commodities may have synthetic or man-made

alternatives (e.g. sugar)

nHistorical consumption and production may be at a

variance, causing price shocks.

Commodities are principally traded in Chicago, New York and

London, although Londons dominance is largely restricted tominerals and metals. Five of the top ten global commodity

exchanges are located in the USA. However, the majority of

commodity traders operate from Switzerland. The principal

purpose of the exchange is to regulate the market in that

commodity. Commodity exchanges operate in a similar way

to the pre-Big Bang stock exchange in London, with most

exchanges allowing traders to exchange futures contracts,

incorporating sell dates and an agreed price. Commodities

are most frequently traded in bulk on the Chicago exchanges

(CME and CBOT); however, they may also be sold directly by

a commodity trading company to a processor-manufacturer.

Commodity Case Study: Sugar

Sugar is traded in contract sizes of 50 long tons (112,000lbs) with futures contracts issued quarterly.4Sugar is unusual

as it faces enormous competition from synthetic and artificial sweeteners e.g. corn syrup. Sugar is produced in 120

countries (25% from Brazil alone), on 31m HA of land;5other key producing countries are China, India and Thailand.

Sugar is one of three agricultural commodities most responsible for driving competition for land in developing countries,

and has been blamed by agencies such as Oxfam for fuelling land grabs. Global production now exceeds 165m

tonnes5

worth $47bn per annum.6

Sugar is a high-yielding crop and less susceptible to climate volatility than equivalentharvested crops. In the UK, sugar beet is grown rather than the more familiar cane (80% of supply). Consumption has

increased from 90m tonnes in 1980 to about 165m tonnes5and is set to grow by a further 20% by 2020.6

How Commodities are Traded


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Many of us enjoy a morning cappuccino; last year in the UK we spent 831m on in-home coffee,7

consuming 500g of coffee per person per year.8Sales are estimated to top 1.1bn and 61m kg in

2013.8In the USA, the worlds largest consumer of coffee, more than 350m cups are drunk every day.8

But how many of us stop to think about how it arrives on our shores and in our favourite coffee shop?

Illustrating Supply Chain Complexity: Coffee

The Coffee Supply Chain

Coffee has one of the most complex supply chains of any

commodity, and is the most valuable. 90% of production is

in the developing world,9with 80% grown by small farmers.10

Over 60m people worldwide are estimated to rely on coffee

production for all or part of their livelihood;10in Brazil alone

coffee supports 5m farmers harvesting 3bn coffee plants

annually.8Global production stands at 120m kilo bags, grown

predominantly in Brazil, Vietnam, Indonesia and Colombia.8

The supply chain typically involves producers, middlemen,

exporters, importers, roasters and retailers. Middlemen

buy direct from small farmers, with green coffee typically

purchased by importers from exporters, 75% of which

is handled from Switzerland.11

Roasters such as Nestl rely on importers that hold large

inventory, drizzling the commodity into the market to

maintain price.

The diffuse, extended supply chain illustrates how far the

ultimate consumer is divorced from production. Growers

have little capital to invest, whilst small farmers may be at

the mercy of spot pricing.

Without investment, labour practices may be poor or even

harmful. Poverty remains an issue for a typical commodity

supply chain.

This is why we are seeing more direct control of supply chains

by roasters; investment in husbandry and labour practices has

led to higher yield, whilst the Fairtrade mark has had a positive

impact on alleviating poverty.

Adopting sustainable farming practices in Vietnam has

boosted production among individual farmers by 10% and

incomes by 30% on average.12However, certified production

is still a work in progress as we shall see later on.

The coffee bush

Coffee grows in tropical countries, near the equator. Coffee cherries, the fruitof the coffee bush, take about ten months to ripen, and are picked when theyare red. Each cherry contains two green beans. Coffee is grown mainly byfamilies on small farms. The cherries are usually picked by hand, because theydont all ripen at the same time.

Processing

After picking, the coffee cherries have to be processed in order to remove theouter husk. Sometimes they are dried in the sun, and sometimes machines areused to dry them. The coffee is then fed through hulling machines in order toremove the dried husk and the parchment (the skin which covers the bean).

If they have the right facilities, coffee farmers process the coffee themselves.Often they sell it to traders or mill owners to be processed.

Sorting, grading and packing for export

The green beans are sorted (by hand or machine) into different sizes. Beansthat are the wrong size or colour, or those that havent been properly hulled, areremoved. The sorted beans are packed into bags and transported to the port.

Shipping

The bags of beans are shipped to the country where they will be roasted andblended to give them a good taste.

Dealers

Dealers buy the beans from the coffee exporters and sell them on to theroasters or coffee companies. These dealers work in stock exchanges in

New York and London.

Roasters

These are the big coffee companies (such as Nestl and Procter & Gamble)which roast the green beans in order to turn them into coffee we can drink.They blend and package the coffee, advertise it and sell it to shops,restaurants, cafs and wholesalers.

Supermarkets and shops

Sell coffee to customers forhome use.

Coffee shops, restaurants

and cafs

Sell coffee to customers to drink.


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Various bulk materials

Containers

General cargo, ro-ro

TotalCommodities 70

20

34 1 3

11

9

8

11

4

14

12

20% Crude oil

11% Oil products

8% Natural gas (LNG)

9% Coal

11% Iron ore

3% Metals and minerals

1% Bauxite/alumina

4% Grain

3% Additional agriculturalcommodities

The Modern Commodity Trade

Commodity trading has come to dominate world trade,

making up 33% of world trade volumes (hard and soft)

and 70% of world maritime cargo dedicated to shipping

commodities.13Soft commodities account for approximately

5% of world trade and 7% of shipped cargo.13

Whilst there are commodity trading hubs in the USA, Europe

and Asia, Switzerland dominates the physical handling of soft

commodities; for instance, Geneva is the global centre for

grain, coffee and sugar trading.

The surge in profits illustrates the necessity of closing

the huge transparency gap of the commodities trading

industry. The industry r ight now is a black hole.

Oliver Classen, The Berne Declaration

,

31

24

34

11

Various products

Chemicalproducts Commodities

Machineryand vehicles

14% Energy

5% Metals

5% Agricultural products

Chicago

London AmsterdamGeneva

Shanghai

Hong Kong

Singapore

New YorkHouston

Each commodity is grown, processed and sold into the market

differently, but each commodity is typically controlled by a

small number of global traders, integrating buying, freight,

and financial futures trading. The top ten global commodity

trading firms earned $1.1trn in revenues in 2012, with the top

five earning $629bn,14rivalling the largest but far better

known financial institutions. To the average person, these

companies are largely unknown and invisible and yet

by and large they control global food and feed supply.

The most significant soft commodity traders include:

Soft commodity trading is dominated by the so-called ABCD

Group of ADM, Bunge, Cargill and Dreyfus. Archer Daniels

Midland (ADM), founded in 1902 and listed on the NYSE,

is one of the Global 10 soft commodity traders with revenues

of $90bn in 2012.15ADM has significant businesses in grain,

oilseed, palm and cocoa, supplying and trading 16% of world

cocoa production.15ADM is typical in having two divisions:

trading and processing. It therefore buys, processes (or refines)

and then trades the raw product into the market. ADM is a

leading manufacturer of raw vegetable oils, corn sweeteners,

biofuels, flour and feedstuffs, illustrating the breadth and reach

of a modern global trader. ADM, like many of its peers, is an

integrated giant, combining financial futures, brokerage,

shipping, risk management and captive insurance as well.

Share of commodity trading in world trade in 2009

MONETARY

Share of commodity trading in world trade in 2009

WEIGHT Refers to ocean freight (80-90% of world trade)

Global Commodity Hubs


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Modern Commodity Traders: the Ethical Issues

These few global trading giants are remote and largely

invisible from public scrutiny, and yet they wield great power

by controlling the market in the raw goods and materials the

world relies on.

Eleven of the top 20 global players are not listed, such as

Cargill of the USA, founded in 1865, and the largest private

company in the USA by revenues. Indeed, if it were listed,

such is Cargills size, it would rank ninth in the Fortune 500

with revenues of $136.7bn.16

Criticism of trading companies isnt just about their size or lack

of transparency. Most have been dogged by charges of poor

environmental management, pollution, deforestation, and

complicity in human rights v iolations as a result of their high

impact. In particular, traders tend, by their nature, to do

business in countries with very poor human rights records.

Their size and reach has also been criticised for supporting

market price speculation (e.g. by stockpiling), which can

then artificially distort food or raw material prices.

For instance, in 2012 Louis Dreyfus was sued by a senior

trader at rival house, Glencore, for allegedly illegally cornering

the cotton market as prices fell. In a very high-profile law suit,

the trader accused Louis Dreyfus of breaking anti-trust law by

artificially inflating prices in cotton futures, citing monopoly

power and collusion.

The suit followed cotton prices spiralling to levels not seen since

the American Civil War in 1865, followed by a crash that saw

them halve. Market manipulation is notoriously hard to prove,

and intra-trading disputes between houses in the tight-knitcommodity markets are rare. The opacity of the trade

nevertheless raises the question of just how markets work,

whether they are and can be manipulated by a handful of global

titans, and the ethical implications for the poorest as a result.

The sector is unusual in being almost wholly unregulated; the

key tax domicile is Switzerland, operating under a typical tax

rate of 5-15%17(compared to 30-45% for the oil majors), with

the industry consequently dogged by charges of tax avoidance

and poor corporate transparency.


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The Commodities Giants with RevenuesLarger than Some Countries GDPsCommodity trading firms come in all shapes and sizes, but the top companies

are giants. In fact, many earn revenues equal in size to the GDP of entire

countries. Below is a comparison between the revenue of five of the top ten

global commodity trading firms and the GDP of five economies.

Founded:1987

HQ:Hong Kong

Employs:15,000

Operations:140 countries

Revenues:

$94bn (2012)

Founded:1902

HQ:Decatur, USA

Employs:31,000Operations:140 countries

Revenues:$90.6bn (2012)

Founded:1966

HQ:Geneva, Switzerland

Employs:5,000Operations:30 countries

Revenues:

$303bn (2012)

Founded:1926/1974

HQ:Baar, Switzerland

Employs:190,000


Revenues:

$236bn (2012)

Founded:1865

HQ:Minneapolis, USA

Employs:142,000


Revenues:

$136.7bn (2013)

Malaysia: $300.6bn

GDP (2012)

Finland: $244.3bn

Hungary: $124bn

Morocco: $94.8bn

Slovakia: $90.7bn


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Soft Commodity Case Study: Cotton

Cotton is a field crop grown widely in the USA, China, India, Brazil and West

Africa. It is produced in two types: long-staple (for high-quality textiles) and

short-staple (industrial textiles). The 12 largest producing countries constitute

91% of world production, with the top three (China, India and the USA)

producing over 60%.18

Supply and demand are finely balanced, as cotton is a fairly predictable

cash crop supplying one third of global fibre demand. It is believed to

support up to 300m livelihoods worldwide,19for instance in Mali, cotton

represents 8% of national GDP and supports 40% of the population.20

It is also grown and exported by high-risk countries such as Sudanand Uzbekistan.


J Sainsbury has been involved with the Better Cotton Initiative

since 2010 and collaborates with partners on sourcing cotton

more sustainably. Sainsbury has set an ambitious target tosource all its key raw materials and commodities sustainably

to an independent standard by 2020, with its top 35 raw

materials subject to sourcing plans in development.

Its school uniform range has now moved entirely to BCI

sourced cotton, saving over 1m cubic metres of process

water. Its target is for 20% of Sainsburys cotton footprint tobe sustainable by autumn 2014, driven by BCI partnerships.

www.j-sainsbury.co.uk/media/1790641/20x20_brochure_2013.pdf


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Sustainable Cotton

Cotton has a reputation for being an unsustainable crop

with its excessive use of water, chemicals and associations

with forced and child labour.

Water use can exceed 10,000 litres to produce 1kg of

raw cotton;19in areas of shortage and scarcity, excessive

drawdown has had a devastating effect on communities and

local livelihoods (e.g. former fishing communities in Uzbekistan

reduced to desert after water supply diversion for cotton fields).

In India, 5% of land is given over to cotton, but it consumes54% of all the sub-continents pesticide use.21So cotton,

vital to the global economy, is a cash crop with substantial

risks attached owing to land, community and water pressures.

The Uzbek cotton industry has been convulsed by child labour

allegations, initiating a wide-reaching ban on sourcing Uzbek

cotton, and giving rise to greater interest in corporate

responsibility and sustainability initiatives. The Better Cotton

Initiative is a multi-stakeholder group focused on six basic

principles for better cotton (limiting pesticide use; water

efficiency; healthy soil; biodiversity protection; fibre quality;

and working conditions). Supporting retailers include H&M,M&S, Adidas, Tesco, J Sainsbury and Walmart.

M&S has a target under Plan A to source 25% sustainable

cotton by 2015, and 50% by 2020. Results have beenimpressive, with 11% sustainable cotton achieved across its

ranges from Fairtrade, organic, recycled or better cotton

compared to just 3.8% in 2011.

In 2012-13, 220,000 farmers took part in better cotton

projects on 683,000HA, producing 623,000MT of better

cotton or 10% of world consumption.22In India, better

cotton farmers typically use 20% less water and 40% less

pesticide.22The global organic cotton market now stands at

an impressive $7.4bn.23

Whilst conventional cotton remains at the heart of the chain,

poor sustainability has forced business and retail leaders to

take increasing control of parts of the supply chain to improve

the chain of custody.

This phenomenon has been repeated across other commodity

supply chains, such as cocoa (see Ecclesiasticals Amity Insight

The Bitter Sweet Side of Cocoa [2008] and the Cocoa

Report [2011]), and palm oil (see IFA Expert Briefing Can You

Invest Responsibly in Palm Oil? [2011]). Companies such as

Unilever and M&S have committed to source only sustainable

palm oil by 2015,24whilst in cocoa, leading confectionery

manufacturers (Mondelez International, Nestl, Mars) have

taken control of parts of the supply chain by sourcing direct

from farmers and are having a dramatic impact on improvedquality, yield and health & safety practices.

In Kita, Mali, the cotton producers co-operative from whom

M&S sources cotton has used the Fairtrade premium paid

(this is in addition to the normal Fairtrade price premium), to

build a block of two classrooms, with a further two planned

next year. This achievement has persuaded the Malian

government to invest in schools in the region. Fairtrade

cotton in Mali is also empowering women at every stageof the production and process cycle.

http://plana.marksandspencer.com

Global Retail Sales of Organic Cotton Products

2007 2008 2009 2010 2011 2012

$bn

10

8

6

4

2



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Producing Sustainably: Nestl

From a producer-processor perspective, commodity supply

chain risk is a pre-eminent consideration operationally as well

as in a reputational context. Companies are increasingly taking

control of their supply chain sourcing for ethical and wider

sustainability reasons. Nestl is the worlds largest food

manufacturer by revenues, with 29 brands commanding sales

in excess of $1bn.25With confectionery, coffee, cereals and

dairy being key product segments, Nestl is a global buyer

of soft commodities, particularly:

nWheatnCocoa

nCoffee

nPalm oil

nMilknSugar

nHazelnuts

In 2012, Nestl sourced 22.47m tonnes of raw commodities.25

Nestl is typical of many of the global food and household

goods producers in beginning to take ownership of the supply

chain in order to become an agent of change; it has

committed to a number of sustainability initiatives across a

range of commodities. In particular, Nestl is working directly

with over 690,000 farmers, with 273,000 receiving training inplant science and agronomy in 2012.25Training, which is vital to

improve yield efficiency, took the form of conservation, water

use, general husbandry and environmental science.

The company has now established responsible sourcing

guidelines across 12 key commodities, with Tier 1 suppliers

audited against their supplier code requirements. Traceability

is still a challenge, but programmes are in place where the

commodity is not sourced directly from the farm. All direct

sourcing (and this is increasing) is monitored via a farmer

connect programme, designed to ensure responsibility,

sustainability and product improvement.

The direction of travel in commodity sourcing is instructive;

the traditional model of sourcing from traders on the

commodity market is easing in favour of direct relationships

with growers and partners. The Nescaf Plan aims to double

the amount of sustainably sourced coffee by 2015; direct

purchases of coffee (eliminating buyers and traders) will reach

90,000 tonnes by 2020.25The Nestl Cocoa Plan follows

in the wake of allegations of child labour and dangerous

practices on cocoa plantations in Cte dIvoire. 11% of

Nestl cocoa is now sourced direct.25


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View from the Top

Commodities have come to dominate global trade; they represent 25% of all trade and 65% of cargo

traffic. Despite their significance, commodity trading remains opaque and elusive. As this Amity Insight

has shown, modern supply chains are complex and extensive, putting a barrier between the grower-

producer and the ultimate customer(s).

The reality is that the bulk of commodities are controlled by a handful of global companies, over half

of them unlisted, and therefore not subject to normal corporate transparency. Trading can be highly

speculative, and potentially manipulative given the lack of regulatory oversight. Speculation and

stockpiling can, in extreme cases, increase price and threaten food security. There are clearly many

ethical issues at the heart of a process that controls global food supply, and which does not necessarily

act in the economic interests of farmer-producers.

These issues are driving change. Manufacturers, in the wake of allegations about poor practices, are

taking more control and buying direct. Only they, rather than the traders, can be the agents of change

that puts sustainability and responsibility at the heart of commodity sourcing. We do not see, at least in

the short to medium term, any change in the balance of power; but the work being undertaken by global

manufacturers, processors and retailers is rewriting the way raw materials are bought and traded. The

ethical dilemmas surrounding the yarn that binds the world are challenging, and range from poor labour

practices to tax transparency.

We see investment in soft commodity trading as problematic owing to the fundamental model that

disconnects the raw material from the wider beneficiaries growers and customers. To that end, we

engage with industry to encourage greater scrutiny of supply chains and better business practices,

whilst looking for value via end-users, manufacturers of synthetic alternatives, logistics and transport.

Neville White,

Senior Socially Responsible Investment Analyst

Sources:

1 Tesco & Society Using our scale for good2013/14. www.tescoplc.com/files/pdf/reports/tesco_and_society_2013-14_halfyear_summary.pdf

2 NRDC www.nrdc.org/food/files/wasted-food-ip.pdf

3 Ecclesiastical Investment Management: HungryPlanet, Food: the search for sustainable yield.www.ecclesiastical.com/Images/Amity%20Insight%20-%20Hungry%20Planet.pdf

4 CME Group (Chicago Mercantile Exchange)

5 S&D Groupe Sucres et Denres www.sucden.com/statistics/1_world-sugar-production

6 Oxfam Nothing sweet about it: How sugar fuels

land grabs 2013 www.oxfam.org/sites/www.oxfam.org/files/nothingsweetaboutitmediabrief-embargoed2october2013.pdf

7 www.fairtrade.org.uk/includes/documents/cm_docs/2012/F/FT_Coffee_Report_May2012.pdf

8 www.realcoffee.co.uk/coffee-encyclopedia/trivia/growing-facts/

9 The Latte Revolution? Regulation, Markets andConsumption in the Global Coffee Chain

10 Coffee: The Supply Chain Times/Nestl www.businesscasestudies.co.uk

11 www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konjunktur/Die-Schweiz-handelt-den-Kaffee-fuer-die-Welt/story/21879629

12 www.bloomberg.com/news/2013-11-24/sustainable-coffee-means-higher-yield-for-vietnam-farmers.html

13 http://unctad.org/en/pages/InformationNoteDetails.

aspx?OriginalVersionID=3814 www.businessinsider.com/presenting-the-worlds-

16-largest-commodity-traders-2011-10

15 www.adm.com

16 www.businessinsider.com/presenting-the-worlds-16-largest-commodity-traders-2011-10#3-cargill-minneapolis-minnesota-14

17 www.bloomberg.com/news/2013-03-27/swiss-reject-tougher-regulation-of-commodities-trading.html

18 Index mundi www.indexmundi.com/

19 Better Cotton Initiative http://bettercotton.org/about-bci/why-a-bci/

20 Fairtrade Foundation www.fairtrade.org.uk

21 www.globecot.co.in/organic/new/intro_of_organic_cotton.html

22 http://bettercotton.org/wp-content/uploads/2013/10/2012-Harvest-Report_final.

pdf23 Global Market Report on Sustainable Textiles

24 http://plana.marksandspencer.com/

25 www.nestle.com


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nThe backing of an award-winning team.

nOver 25 years of experience of

socially responsible investing (SRI).

nFunds that are both positively

and negatively screened.

nA stable investment team with

a wealth of experience spanning

many years.

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SRI research function.

nAn independent panel that reviews

investment decisions.

nA robust socially responsible

investment process.

nA pride in our independent analysis.

Were not afraid to adopt contrarian

positions and are in favour of long-term

investment horizons.

nA consideration of the preservation

of capital as our primary responsibility,

preferring absolute returns over relative

performance.

nFund Managers at Ecclesiastical areunconstrained by rigid stock lists,

permitting more flexibility to take

advantage of good-value opportunities

as they present themselves.

nDecision-making for the long term,

as frequent trading increases costs

and decreases returns.

nAvoidance of companies materially

involved in alcohol production, gambling

operations, pornographic and violent

material, tobacco production, testing

animals for cosmetic or household

products, supporting oppressive

regimes or strategic weapon production.

nActively seeking out companies with

a record of involvement and good

performance in terms of business

practices, community relations,

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human rights, labour relations and

urban regeneration.

Why Ecclesiastical?


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Ecclesiastical Investment Management Limited (EIM) Reg. No. 2519319. This company is registered in England at Beaufort House, Brunswick Road,Gl t GL1 1JZ UK EIM i th i d d l t d b th Fi i l C d t A th it d i b f th Fi i l O b d S i d

We pride ourselves on our support for IFAs. For more information, fund factsheets or how to invest, please contact us:

Phone Fax Email Website

0845 604 4056 020 7528 7365 [email protected] www.ecclesiastical.com/ifa

Sue Round

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Amity UK Fund Manager

Sue Round is the UKs longest-serving

retail SRI Fund Manager. With the benefit

of extensive experience, Sue has made the

Amity UK Fund one of the leaders in the

increasingly important socially responsible

investment sector.

Robin Hepworth

Chief Investment Officer, Amity International

Fund Manager and co-manager of the Amity

Sterling Bond Fund

Robin has been with Ecclesiastical for 24

years. He is recognised as one of Citywires

top 10 Fund Managers of the past decade

and is also a Trustnet Alpha Manager, placing

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co-manager of the Amity Sterling

Bond Fund

Chris started working for Ecclesiastical in

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Meet the TeamAndrew Jackson

UK Equity Growth Fund Manager

Andrew joined Ecclesiastical in 2003 and

manages the UK Equity Growth Fund. His

wealth of experience includes roles at Canada

Life and Lloyds Investment Managers. Andrew

is AAA-rated by Citywire.

Neville White

Senior Socially Responsible

Investment Analyst

Before joining Ecclesiastical in 2010, Neville

was responsible for developing and managing

global corporate governance proxy voting with

CCLA Investment Management. Prior to this,

he worked for the Church Commissioners,

latterly as Secretary to the Church of

Englands Ethical Investment Advisory Group.

Ketan Patel, CFA

Senior Socially Responsible

Investment Analyst

Ketan began his career at JP Morgan in

1998. He moved to Clerical Medical (now

Insight Investment) as an Equity Analyst.

Ketan has worked for Ecclesiastical for

10 years and is a CFA Charterholder.

Please note that past performance is not a reliable indicator of future results and that the value of investments

can fall as well as rise and you may get back less than the amount invested. Source & Copyright: CITYWIRE.

For the three years to 31stDecember 2013 based on risk-adjusted performance.

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