Dundee-based Alliance Trust plc, the £3 bilion global investment trust (closed end fund), announced on Tuesday it appointment of Hermes Equity Ownership Services (HEOS) to strengthen its commitment to sustainable investing.
Representing £450.5 billion of assets, HEOS is a major provider of advice to institutional shareholders on environmental, social and governance (ESG) issues, engaging with companies on their behalf and providing them with advice on how to vote.
Alliance Trust’s investment manager Willis Tower Watson already incorporates ESG factors into its investment process, vetting the sustainability credentials of all the managers it selects for the Trust’s active multi-manager global equity portfolio.
The appointment of HEOS will add a further layer of expertise and oversight, helping to enhance the application of ESG and sustainability principles.
Craig Baker, chairman of the Alliance Trust investment committee and global chief investment officer of 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.
“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.
“We believe actively engaging with companies to improve their standing on ESG and sustainability issues is a vital part of our role as investors, HEOS will help us do this effectively for the Alliance Trust portfolio …
“In addition, we have developed portfolio management tools that allow us to assess the resilience of the Alliance Trust 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.
“We strongly believe that all of our work on integrating sustainability will help deliver better returns for Alliance Trust investors.
“Crucially, it will also help shape a better world in which to enjoy those returns.”