Sustainability
At Marsham Investment Management LLP (Marsham IM), we believe that responsible investing will not only deliver sustainable, long-term value for our clients but it can also have a positive impact on society.
Responsible Investment
Marsham adopts the UN PRI definition for Responsible Investment as “a strategy and practice to incorporate environmental, social and governance factors in investment decisions and active ownership”. We view it as inherently entwined with our fiduciary duty and believe it is a prerequisite to upholding trust and confidence. We recognise that sustainability is one of the key pillars of a successful investment strategy and an essential part of fundamental analysis to identify companies with long term prospects.
Why is it important?
Our mission is to enable our clients to achieve their financial objectives through superior returns over a prolonged period of time. We focus on long term prospects of our portfolio companies and believe that sustainability is one of the key pillars of successful investment strategy. We believe that investing in companies with sustainable business practices and disruptive companies that can adjust to change, brings success in the long term. Furthermore, sustainability encourages positive economic, environmental and social change.
Transitional Issuers
The modern economy has been built on fossil fuels and this is something we believe will change with consistent effort over the long term. We are of the view that allocating capital to transitional activities will enable a shift towards greener business models and a more sustainable economy. This is especially so for companies that are in greenhouse gas-intensive industries and industries that currently do not have sufficient green assets but require financing to reduce carbon footprint from their business activities.
When considering Transitional Investing, we focus on company’s fundamentals and strategy rather than the instrument it issues. While “green bonds” have helped to draw financing to the climate change problem, we believe there is a larger scale transformation required to achieve environmental targets. We would like to finance companies that can transform their business practices or even impact their respective industries in a sustainable way, rather than to finance a one-off project. We use proprietary Transitional Scorecard and AI-based tools to identify such opportunities.
Sustainability integration
Marsham IM’s aims to invest in companies which are on a clear and measurable path towards sustainability transition
(“Transitional Issuers”) and to a smaller extent into companies that already achieved it (“Best-in class” companies). We recognise both risks and opportunities presented by adapting to climate change and seek to invest in companies that equally acknowledge the risks and embrace the opportunities available, positioning them advantageously to peers.
ESG integration into our investment process thus considers double materiality:
1) Financial materiality – events that financially impact the company; sustainability risks to the issuer, and
2) Impact materiality - impact of the issuer on the environment.
In addition, our responsible investment framework assesses the positive and negative SDG contributions by a company. This assessment is focused on adherence to the United Nation’s Sustainable Development Goals (SDG) and is provided by the AI tool developed by SEVVA.
More information on our approach to sustainability, responsible investing and our exclusions is available in our Responsible Investment Policy on request.
