+10 years

of experience in responsible and impact investing

90%*

of AUM** classified as Articles 8 & 9 under SFDR

>8800

issuers rated according to ESG criteria

100%

of our core portfolio managers have access to ESG research and scores

WHAT IS RESPONSIBLE INVESTING?

At Brocastocks, we define responsible investing (RI) as an investment process that incorporates environmental, social and governance (ESG) factors into its approach. RI enables clients to align their investments with global megatrends that are changing the investment landscape. Issues such as increasing regulation, the growing need for risk mitigation and a heightened social conscience can be more effectively addressed by integrating ESG factors into the investment process.

WHY IS RESPONSIBLE INVESTING IMPORTANT?

AESG can allow firms to foster a meaningful change in the global economy, and in the communities in which we live and work. We believe that ESG analysis leads to more effective investment solutions that address global challenges and create sustainable value for our clients.

The integration of ESG factors is used to enhance traditional financial analysis by identifying potential risks and opportunities beyond technical valuations, providing data on issues such as potential reputational risk or identifying firms which are adapting to meet new market challenges. It is important to note that the main objective of ESG integration remains financial performance.

OUR APPROACH TO RESPONSIBLE INVESTMENT

We offer a bespoke, discretionary service to the majority of our clients through investment managers, financial planners, or a combination of the two. Therefore, our responsible investment approach will be tailored to the individual needs and objectives of the client.

1. ESG integration

We believe that high-quality companies which manage ESG risks and opportunities well will make attractive long-term investments. Our research team considers ESG factors when evaluating individual companies and when they assess fund managers. Through the use of Sustainalytics, a third-party provider of ESG data, material risks and opportunities are fed into traditional financial analysis and models for our ‘buy list’ stocks.

2. Ethical screening

During suitability discussions with their investment manager, clients can choose to apply certain ethical screening criteria to their portfolio. Clients can select certain restrictions for direct holdings, and portfolios are then created and managed to reflect these restrictions

3. Engagement and stewardship

Brewin Dolphin is committed to being a good steward of our clients’ investments, to enhance and protect their long-term value. We are supporters of the UK Stewardship Code and have a tier one rating for our engagement work.

REPORTING

We report on all of our stewardship, engagement and responsible investment activities at least annually. Details of these reports will be available on our website.

CONFLICTS OF INTEREST

Conflicts of interest may arise from our responsible investment activities. Any such conflicts will be recorded, considered, and dealt with in line with Brocastocks conflicts of interest policy. All colleagues are regularly trained to identify and address potential conflicts of interest.

APPROVAL AND REVIEW

This statement is intended to summarise Brocastocks approach to responsible investment. Overall responsibility for this approach is held by the Sustainability Committee, which reports to the Executive Committee. It was reviewed and approved by the Sustainability Committee in December 2020. Our responsible investment statement will be reviewed and updated at least annually

OUR ESG PRINCIPLES ARE EMBEDDED THROUGHOUT OUR OPERATIONS AND HELP US ENSURE THAT OUR BUSINESS MODEL WILL BE SUSTAINABLE WELL INTO THE FUTURE.

Mitigate the impact of our operations on the environment

Environmental stewardship: Strive to minimize the environmental impact of our operations and improve our efficient use of resources over time.
Net Zero Commitment: Support the goal of net zero greenhouse gas (GHG) emissions by 2050 or sooner.

Ensure the well-being and safety of employees

Employee well-being: Meet or exceed all applicable labor laws and standards in jurisdictions where we operate, which includes respecting human rights, offering competitive wages and implementing nondiscriminatory hiring practices.
Health & safety: Aim to have zero serious safety incidents within our businesses by working toward implementing consistent health and safety principles across the organization.

Be good stewards in the communities in which we operate

Community engagement: Engage with community groups that might be affected by our actions to ensure that their interests, safety and well-being are appropriately integrated into our decision-making.
Philanthropy: Encourage our employees to participate in the communities in which we operate.

Conduct business according to the highest ethical and legal/regulatory standards

Governance, ethics, and fairness: Operate with high ethical standards by conducting business activities in compliance with applicable legal and regulatory requirements, and with our Code of Business Conduct and Ethics.
Transparency: Be accessible to our investors and stakeholders by being responsive to requests for information and timely in our communication.

KEY DIMENSIONS OF OUR ESG ASSESSMENT OF CORPORATIONS AND COUNTRIES

INTEGRATING ESG CONSIDERATIONS INTO OUR INVESTMENT PROCESS

Our commitments include incorporating ESG factors into our investment decisions, starting with the due diligence of potential investments through to the exit process. We tailor ESG due diligence to each investment, and we create post-investment remediation plans for material ESG considerations. For all potential investments, we use internal experts and a variety of ESG frameworks to identify material ESG factors and utilize external consultants where appropriate. This analysis includes everything from ensuring environmental, legal and regulatory compliance to the identification of opportunities to add value or mitigate risk in our portfolio. Our investment teams use an ESG due diligence guideline to ensure consideration of material ESG risks and opportunities.

These teams then provide a detailed memorandum to the Investment Committee outlining the merits of the transaction and disclosures relating to risks, including material ESG issues, and potential mitigation strategies. All investments made by Brocastocks must be approved by the Investment Committee and must incorporate ESG matters into their evaluation, including anti-bribery and corruption, health and safety, and other ESG considerations.

Upon company acquisition, we create a tailored integration plan to ensure that all material matters, including ESG risks and opportunities are prioritized. ESG risks and opportunities are actively managed by the portfolio companies with guidance from our in-house investment teams, primarily through representation on company boards and equivalent oversight bodies where all financial, operational, and strategic elements of the business are reported, considered, and where appropriate, approved.

This allows us to draw on local expertise, which provides valuable insight given the wide range of asset types and locations in which we invest. Certain key performance indicators, such as serious safety incidents, are reported regularly to the applicable board or other oversight body.

KRESPONSIBLE INVESTMENT HIGHLIGHTS

09

Driving Responsible Investment Across All Financial Markets

Responsible investment is no longer a niche pursuit, and in many ways is perfectly suited fro fixed income investment.

16

Developing Data to Support Analysis and Engagement

Brocastocks Prime rating aim to highlight ESGand climate risk to support better research and stewdardship, and to help build portfolios talioredto our client's interest.

20

Proactive Engagement on ESG Issues Data to Support Analysis and Engagement

in 2020, 90% of 1,210 engagements included ESG issues

40

Investing for impact

Brocastocks added over 2bn of impact bonds to client accounts in 2020. 187 Client accounts at Brocastocks now have exposure to impact bonds