ESG statement

Firmly believing that healthy financial markets depend on healthy communities, CCLA has a long track-record of instigating change for a better world with its pioneering work on climate, modern slavery and mental health. Founded in 1958, CCLA is independently owned by its clients and staff with over £13 billion of assets under management as at 31 December 2022.

Fast Facts

  • £13+ billion in assets under management*
  • 60+ years of ESG investing
  • £15+ trillion of assets supporting CCLA initiatives in mental health, modern slavery and climate change
  • 160+ diverse team of staff supporting clients across the UK
  • 5* rated by PRI for listed equities
  • Signatory to PRI (2007) and Stewardship Code (2020)

 

Information correct as at 31 December 2022

*CCLA: Internal as at 31 December 2022

 

Driving positive and lasting change

ESG investing has undergone an incredible rise in popularity. This style of investing requires analysis of extra-financial risks, as well as traditional financial factors, when making investment decisions, and should, we believe, be welcomed.

However, instead of working to alleviate the world’s major sustainability challenges, most sustainable investors choose to invest either in thematic sustainability leaders, or simply in companies with high ESG ratings.

While this may feel safe or ‘clean’, ESG ratings are artificial and do not relate to the real world. By buying a company that is already a leader in sustainability, investors are simply profiting from positive activity that is already taking place; their ownership makes no difference.

At CCLA, we take a different approach. We go beyond ESG and the composition of portfolios, to be an advocate and catalyst for change. We do this by actively engaging with businesses and by bringing the investment industry along with us. This is the only way to drive the change we need to see; it is also the only hope we have of protecting the long-term value of our clients’ investment portfolios generations into the future.

Good Investment at CCLA

As an asset manager our aim is to meet our clients’ financial objectives in a way that aligns with their values and furthers their mission. We believe we have a duty to go beyond the boundaries of traditional investor engagement and work with the industry to address systemic risks that threaten communities, the environment and ultimately investment markets.

IMPORTANT INFORMATION

This webpage is a financial promotion and is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. To ensure you understand whether a CCLA product is suitable, please read the key investor information document (KIID) and prospectus.

CCLA strongly recommends you seek independent professional advice prior to investing. Investors should consider the risk factors identified in the prospectus. Past performance is not a reliable indicator of future results. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. The fund can be exposed to different currencies and movements in currency exchange rates may adversely affect the value of your investment. Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity, and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries. The Annual Management Charge is paid from capital. Where charges are taken from capital rather than income, capital growth will be constrained and capital may be eroded.

Any forward-looking statements are based upon CCLA’s current opinions, expectations, and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated.

CCLA Investment Management Limited (registered in England and Wales, number 02183088, at One Angel Lane, London, EC4R 3AB) is authorised and regulated by the Financial Conduct Authority under firm reference number 119281.

 

Links and documents
– Pushing for action to end modern slavery
– Get Real sustainability report
– Driving change on workplace mental health

Funds to watch

Name ISIN Domicile Description
CCLA Better World Global Equity Fund C Inc GB00BPP3BY99 | C Acc GB00BPP39M31 | I Inc GB00BPP3BZ07 | I Acc GB00BPP3C023 UK

Aims to provide a total return (the combination of capital growth and income) over the long term (defined as any rolling period of five years) and is managed in line with CCLA’s approach to investing for a better world as outlined in CCLA’s Better World policy.


Fact Sheet (Class C) | Fact Sheet (Class I)

ESG DDQ

Is ESG integrated into your investment process? How? Which funds or does this apply to the entire firm?

We apply the same investment process across all our funds. We believe that a combination of legislation, regulation and changing societal preferences will impact negatively on the most unsustainable business models. We avoid investing in companies that have uncompensated, unwanted, unwarranted, and unmitigated ESG risks as evidenced by:

  • poor management and weak corporate governance
  • having an unacceptable social and environmental impact
  • not demonstrating a willingness to improve through investor engagement.

This helps us avoid investments that we anticipate will underperform and, as the market has a poor record of pricing these risks, enable us to deliver consistent long-term risk-adjusted returns to our clients.

Please summarise the key ESG metrics that are core to your strategy?

We believe that poor ESG standards at companies is of increasing importance. So, we assess each company prior to purchase in two ways.

First, we assess how sustainability factors will impact upon the company’s ability to thrive financially. This assessment is based on reviewing the company against:

  • Sector-specific sustainability issues identified by the Sustainability Accounting Standards Board (SASB). SASB Standards identify the subset of environmental, social and governance issues most relevant to financial performance and enterprise value for each of the 77 industries. These issues can be broadly summarised into Environmental, Social Capital, Human Capital, Business Model & Innovation, Leadership and Governance factors.
  • The grade as awarded by the CCLA Corporate Governance Rating. This is a bespoke tool that awards companies a grade from A-F dependent upon the quality of their board structure, accounting, ownership and capital stewardship.
  • Any sustainability controversies that the company has been involved in.

The outcome of this assessment can alter our views about the value of a company.

Second, we recognise that not all sustainability issues are financially material within conventional investment time horizons. However, we expect that regulation, legislation and changing consumer preferences will increasingly embrace the importance of sustainability. Businesses involved in the most unsustainable activities are likely, over time, to be penalised. For this reason, we also assess companies’ impact upon the real world. This is based upon three themes:

  • Better work – labour standards and human rights
  • Better health – encouraging high standards of health and wellbeing
  • Better environment – climate change and the environment

Taken together, this analysis allows us to identify, and remove from our investment universe, the most unsustainable businesses and develop appropriate engagement action plans to help others move forward.

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