David Sheasby

Martin Currie, the active equity specialist with AUD $31 billion in assets under management, as of December 31 2023, has been awarded the highest possible rating by the Principles of Responsible Investment (PRI), the world’s leading proponent of responsible investing.

Martin Currie was awarded a five-star rating across all categories relevant to its investment activities.

“This independent endorsement of Martin Currie’s approach to sustainability is a result of our collaborative investor-led model of stewardship and implementation of industry best practices,” said David Sheasby, Martin Currie’s Head of Stewardship and Sustainability.

The recognition of the firm’s global active stewardship efforts extends to Melbourne-based Martin Currie Australia (MCA), where investors can access 15 strategies across multi-sector, Australian and global equities through managed funds or exchange-traded funds (ETFs).

Reece Birtles, Chief Investment Officer for MCA, said, “Since becoming signatories in 2009, we have made significant advancements in our environmental, social and governance capabilities and our interactions with ASX-listed companies.

“We are constantly looking at new ways to improve and bring a greater awareness to our investee companies of social issues such as First Nations people, work safety, modern slavery and data privacy, alongside environmental issues such as net zero and biodiversity, and best practice on governance,” Birtles said.

Martin Currie’s PRI Ratings

In 2023, Martin Currie achieved 5-star ratings across the PRI’s modules, which includes the ‘Public Governance and Strategy,’ and ‘Confidence building measures’ modules that apply to all asset managers. It also received a five-star rating in the category of ‘Direct – Listed equity- Active Fundamental,’ which is specific to the equity asset class.

A signatory to the PRI since 2009, Martin Currie employs an active approach to stewardship. This means the investment teams are directly responsible for stewardship and sustainability analysis, engagement and voting. Martin Currie’s philosophy of active stewardship is that investment decision-makers are best equipped to understand the risk and opportunities that arise from sustainability issues. Martin Currie’s investment teams employ engagement and proxy voting as powerful tools to bring about positive change at both the company and industry level.

Additionally, Martin Currie’s commitment and approach to transparency and reporting these activities to clients has contributed to their ratings from the PRI. Martin Currie was awarded the highest possible ratings of A+ from the PRI in the 2016, 2017, 2018 and 2019 calendar years. In 2021, the firm was awarded two 5-star ratings and one 4-star rating reflecting the new and revised reporting framework.

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David Sheasby

Over the last decade, stewardship and sustainability have evolved rapidly, driven by a mixture of growing investor demand (asset owners), increased sophistication to manage risk (asset managers), improved reporting (companies) and enhanced regulation (policymakers).

Over the course of 2023, we expect further evolution in these areas with an increased focus on real-world impact, says David Sheasby, Head of Stewardship, Sustainability and Impact at Martin Currie, part of Franklin Templeton.

“Impact investing has become significantly more prominent as investors focus on the intentionality of their investments and seek to generate positive impact alongside financial returns. We expect that investors will look at the role of public equities in generating impact as a key focus for 2023.

“Climate will remain a key issue this year with an increased sense of urgency for action as the window for limiting climate change rapidly closes. We see an enhanced focus from regulators (e.g., emissions reporting and, in some cases, mandatory reporting through the Task Force on Climate-Related Financial Disclosures) and investors through the potential expansion of collaborative engagements (e.g., Climate Action 100+). Biodiversity is a related, but separate, issue supported by the emergence of new reporting frameworks, and we expect to see progress in this area over the course of 2023.

“Human rights, social issues and inequality will have increased prominence as stewardship topics, and we are also seeing the emergence of regulation in this space. In December 2022, the Principles for Responsible Investment launched a collaborative engagement on human rights and social issues called Advance, which is backed by more than US$30 trillion in in assets managed by investors endorsing Advance^[1],” says Sheasby.

In 2023, asset managers will be asked to demonstrate their authenticity in managing sustainability and stewardship risks on behalf of investors.

“In the United Kingdom, we will see the emergence of the Sustainability Disclosure Regulation (SDR), which aims to tackle greenwashing and will set a very high bar for products to be called sustainable. In Europe, we expect continued tightening of regulation around how funds are categorized. Finally, in the United States, we should see the next stage of the emerging naming and disclosures regime on environmental, social and governance-labeled products. These developments will be critical for asset managers to effectively deliver the products and the outcomes that investors seek,” he adds.

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Endnotes:
[1] *Source: United Nations Principles for Responsible Investment.

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