As an investment trust, we aim to make well-informed investment decisions which ensure that the pursuit of prosperity for our shareholders is not achieved at the expense of the environment or the wellbeing of society. We believe that companies which disregard this will fail to deliver sustainable returns to shareholders. Far from there being a conflict between good returns and responsible investment, managing assets in line with these principles is key to achieving these dual objectives.
Driving sustainable businesses through a strategic approach to responsible investment
Witan has developed a comprehensive yet highly targeted strategy which reflects where we feel we can have the biggest positive impact, namely the characteristics of our investment portfolio and our engagement with the companies in it. We believe that capital allocation and engagement have more long-term impact than an exclusionary approach. Our commitment to the Net Zero Asset Managers initiative (‘NZAM’), and to have a portfolio which consists entirely of sustainable businesses by 2030, are core to this approach.
Witan defines a sustainable business under four key elements:
prosperity, people, planet and partnership
What this means to Witan
What does this look like?
- A robust purpose, vision and ambition based on a strong culture and values.
- Businesses which are well positioned to benefit from long-term tailwinds, with a competitive advantage and high barriers to entry.
- Companies which are growing but where growth prospects are underappreciated .
- Good corporate governance with strong policies and compliance.
- Regular and open engagement with stakeholders to ensure both internal and external risks and opportunities are identified.
"We believe that every sustainable business is underpinned by a strong culture and set of values that encourage the right behaviour."
Andrew Bell,CEO
What this means to Witan
What does this look like?
- A committed management team with deep and relevant experience overseen by a strong and independent Board.
- A diverse and inclusive work force with a clear commitment to adopt and integrate ESG principles and sustainable working practices.
- A focus on customer and client service excellence.
- A remuneration policy which is commensurate with responsibility, fair by industry and regional standards and which strikes a balance between the interests of the employees and other stakeholders.
"A sustainable business backs up its commitments with investment and action particularly in the area of diversity and inclusion."
Andrew Ross,Chairman
What this means to Witan
What does this look like?
- A strategic approach to assess, limit and, where possible, eliminate environmental impacts including emissions.
- A commitment to follow Science Based Targets, in its climate change approach.
- A clear roadmap to minimise environmental risk and capitalise on opportunity.
- Transparent disclosure around environmental impacts.
"Companies which are aligned with, or help enable, the net zero transition stand to benefit from measures to curb or mitigate global warming while those that do not are at risk from obsolescence and financial or regulatory headwinds."
James Hart,Investment Director
What this means to Witan
What does this look like?
- Membership of key industry coalitions to address global and regional issues.
- The implementation of multi-stakeholder strategies to work in partnerships, whether internal or external.
- A clear position on the key corporate challenges, led by management.
"The key thing is what companies are doing rather than just saying. Political and ‘coalition’ engagement is a good start but has to translate into action."
Jack Perry,Non-Executive Director
Our portfolio review
Our focus in 2023 was to establish a framework and a baseline to assess our progress towards attaining a fully sustainable portfolio by 2030.
Our Investment Team engaged with our fund managers to execute this assessment and we are pleased with the outcome and the insights to date. This will help us to set the agenda for the years ahead.
Governing our strategy
Witan has embedded sustainable considerations across our entire investment approach, not just within a limited part of our portfolio. Blanket exclusions, with the exception of controversial weapons, run counter to this strategy. The investment managers with whom the Company engages are required to invest responsibly, with the expectation that our principles will be adopted by the companies we invest in.
The Board and investment team review and take ownership of this strategy. Members of both are responsible for the delivery of our strategy, as well as the due diligence and monitoring of how our managers engage with and consider sustainability-related issues.
Our memberships
Witan is a signatory to, or supporter of, a number of initiatives which coordinate the investment industry’s approach to responsible investment and provide a framework for its implementation. We also use various analytics to monitor the portfolio to ensure we are on track to achieve a sustainable future. The tools we employ inform us of potential ESG risks in the portfolio and will often lead to engagement with our managers and investee companies. These include:
PRI
UN-backed Principles for Responsible Investment – the PRI works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions to enhance returns and better manage risks.
NZAM
Net Zero Asset Managers initiative – a partner organisation of the ‘Race to Zero’ campaign. The NZAM is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner.
IIGCC
Institutional Investors Group on Climate Change – supports the investment community in driving significant and real progress towards a net zero and resilient future. This will be achieved through capital allocation decisions, stewardship and successful engagement with companies, policy makers and fellow investors.
CDP
CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.
TPI
Transition Pathway Initiative – a global, asset owner–led initiative which assesses companies' preparedness for the transition to a low-carbon economy.
Morningstar Sustainalytics
A leading independent ESG research, ratings and analytics firm.
RepRisk
A data science company which uses artificial intelligence and machine learning to systematically flag and monitor material ESG risks and violations of international standards that can have reputational, compliance, and financial impacts on a company.
All our of managers are signatories to the PRI and 50% have already signed up to the NZAM. Our managers are also members of various other ESG initiatives and employ a wide variety of tools to help monitor their own portfolios. Whilst of great value to the oversight process, these tools cannot replace traditional, in-depth analysis carried out by active managers. Our managers run concentrated, high conviction portfolios, typically with between 20 and 50 holdings. As such, they are well-placed to gain a detailed understanding of the ESG risks and opportunities within investee companies and to engage with management on a regular basis. This level of knowledge, understanding and engagement is of great value to our responsible investment approach
*Witan Investment Trust is an equity investment. Please note that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of currency and market fluctuation and you may not get back the amount originally invested.
Discrete performance (%) †
| Q2 2019 Q2 2020 | Q2 2020 Q2 2021 | Q2 2021 Q2 2022 | Q2 2022 Q2 2023 | Q2 2023 Q2 2024 | |
|---|---|---|---|---|---|
| Share Price | -11.6 | 34.7 | -12.6 | 12.8 | 21.4 |
| Net Asset Value‡ | -8.9 | 37.4 | -11.8 | 13.8 | 15.0 |
| Benchmark# | 2.3 | 24.5 | -2.6 | 11.2 | 19.5 |
|
Relative numbers may not add up due to rounding. |
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