Alliance Trust has appointed Hermes Equity Ownership Services (HEOS) as it continues to integrate environmental, social and governance principles into its investment process.
The appointment of HEOS, which represents £450.5bn of assets and provides advice to institutional shareholders on ESG issues, will “add a further layer of expertise and oversight” to the application of ESG and sustainability principles.
Investment manager Willis Towers Watson already incorporates ESG issues into the £3bn investment trust’s investment process, by “thoroughly vetting the sustainability credentials of all the managers it selects for the Trust’s active multi-manager global equity portfolio”.
Craig Baker, chairman of the Alliance Trust investment committee and global chief investment officer at Willis Towers Watson, said: “We interrogate the Trust’s managers’ processes and portfolios to ensure that their ESG policies get put into practice, and that sustainability is a genuine part of their decision making.
“We expect all of the Trust’s stock pickers to undertake effective engagement and voting. But we recognise they have limited resources to do this so we don’t stop there.”
He added: “With the pending appointment of HEOS, we will be able to enhance the active stewardship applied to the Alliance Trust portfolio with HEOS’s industry-leading experts.”
Mr Baker said Alliance Trust has developed portfolio management tools which assess the resilience of its portfolio to a range of sustainability issues, including the impact of specific climate change scenarios.
“We can also use this data as part of our continual monitoring of the Trust’s stock pickers, challenging them on their holdings and ensuring that they are thinking about all the risks in their portfolios, as well as the potential investment opportunities out there,” he added.
Back in March this year, Alliance Trust was one of 69 companies listed on the FTSE 350 index to receive a letter from the Investment Association and the Hampton Alexander Review raising concerns about poor female representation on its board.