Committed to a better future

CGAM have core principles that underpin their investment practices and commitments. CGAM seek to be good stewards of the Company’s assets and believe their considered approach helps them make better investment decisions.

Be honest

No greenwashing, no PR-led initiatives, no jargon. We believe in an accurate presentation of our activities not a marketing campaign.

One firm,
one rule

Our standards apply to all the funds we advise. We do not have ethical and by implication unethical funds.

Ethics,
not mathematics

There is no formula that can be applied in a uniform way to every situation. We emphasise judgement over simplistic third party ESG scoring systems.

Don’t disinvest,
engage

When investors have the influence to effect change, it is most valuable to encourage positive transition rather than engage in blanket disinvestment.

Targeted

As a small firm, we must focus our efforts where they will have the most influence, rather than taking a generalist approach.

Governance

Investors have multiple direct mechanisms to influence governance, so we primarily focus on governance even when the ultimate objective consists of other priorities.

Integration,
not separation

The entire team is collectively responsible for stewardship activities, with the ultimate responsibility lying with the chief executive. We do not have a standalone responsible investment team.

Act, with
humility

Every action results in both intended and unintended consequences. Reflect deeply on the risk that good intentions can lead to unintended negative outcomes.

Policy formation process

Our policy documents are informed by input from a number of different parties. The policies seek to incorporate our institutional principles, client feedback, best practice as defined by industry and regulatory bodies. In addition we take expert third party advice.

CGAM’s capacity to implement our responsible investment policies rests on having sufficient human resource available, appropriately trained and with access to the right operational systems. The body with principal responsibility for ensuring these capabilities are in place, and for the implementation of the responsible investment policy, is the responsible investment committee.

The RI committee is a four members body that meets half year. It includes members from all teams within the firm and is chaired by the chief executive.

Capital Gearing Trust invests in diverse portfolios which incorporate a wide range of asset classes. Different asset classes lend themselves to different stewardship approaches based on data quality and the potential for CGAM to influence the issuer. Where we have less influence we are more likely to pursue exclusions. In our assessment exclusions are a less effective and productive form of stewardship but it makes no sense to expend significant resources on engaging in areas we are less likely to impact.

CGAM carried out a significant number of engagements in the half year relating to securities held by Capital Gearing Trust. Every meeting we hold with an investee company is an opportunity to raise ESG related points as part of our ongoing stewardship activities. We track all these interactions as part of our engagement activity but we do not consider every meeting to constitute an Active Engagement. For CGAM an Active Engagement has an ongoing project with a clear objective that could realistically be achieved over a short or medium term time frame and almost certainly includes some form of escalation beyond talking to management.

There are two main forms of collaboration that CGAM undertakes. Direct collaboration is a targeted form of intra-shareholder engagement initiated by us (or other shareholders) after identifying specific issues at an investee company. It is a highly effective way of engaging around non-systemic issues we identify in our portfolios.

A secondary form of collaboration, more suited to systemic issues, are indirect collaborative engagements intermediated by third party institutions or industry bodies. In complex areas of systemic risk we recognise that the impact of individual engagement is likely to be limited, so it makes sense to pool our influence with larger investor groups. We acknowledge there are many areas we can benefit from the insights of larger and more experienced collaborators in the field of systemic risk.

CGAM is committed to regular reporting to allow our stakeholders to access timely information and for reasons of transparency. Our RI reporting schedule includes the following publications:

Voting

The voting summary for the half year can be found in the “All Documents” section of this website.

Co² metrics

CGAM is committed to publishing half year emissions data for the firms and this can be found in the Responsible Investment report in the “All Documents” section of this website.