As a portfolio manager, Truesdale will support the growth of Martin Currie’s emerging market strategy. The strategy manages assets of £5.2 billion (A$9.7 billion) as of September 30, 2021.

“Over the last few years, our emerging markets franchise has grown substantially due to the outstanding and consistent returns we have achieved in the asset class. Around the world, we now manage assets for some of the most prestigious asset owners who recognise our distinctively collaborative approach and experience in ESG integration. We very much look forward to welcoming Aimee to our team and her support for the continued success of the strategy,” said Martin Currie Chief Executive Officer Julian Ide.

Truesdale was most recently an assistant fund manager and equities analyst at Jupiter Asset Management, where she worked on the firm’s Indian equities strategy and conducted research and analysis on emerging markets equities. Part of her role involved collaborating with Jupiter’s Stewardship team to oversee ESG issues at investee companies.

Truesdale holds a B.Sc. in physics with honours from the University of Edinburgh. She has been a CFA charterholder since 2016.

“Aimee brings versatile analytic experience to the team as well as a strong grounding in emerging markets,” said Alastair Reynolds, Martin Currie’s portfolio manager for global emerging markets.

“She joins at an exciting time for Martin Currie, given the growth we are seeing across our business. With our growing team, we will expand coverage and deepen our corporate engagements to the benefit of clients and the overall strategy. Aimee will be a valuable addition to the team, and we look forward to bringing her on board,” said Mr Reynolds.

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This initiative covers regional insights, ongoing development of ESG tools, and the outcomes of engagement activities from investment teams in Edinburgh, Singapore and Melbourne.

Julian Ide, Chief Executive Officer Martin Currie notes: “In this edition, we have specifically focused on the many facets of our corporate purpose – Investing to Improve Lives.

“At Martin Currie, our purpose of Investing to Improve Lives is more than just providing world class investment solutions and better financial outcomes for our clients. It is about us providing Outcomes Beyond Alpha. It guides us through our partnerships with clients, as investors in equity markets, our business practices, as an employer, and as members of the community.

“Previous issues of Stewardship Matters have rightly focused on key issues that face us as a society, such as the climate crisis and the importance of the achievement of the UN Sustainable Development Goals.

“We wanted to use this edition as an opportunity to hold a mirror to our own activities and prove that as a firm, we strive for the same exacting standards that we expect of the companies we invest in.

“I am proud to share with you some of Martin Currie’s recent, tangible actions which aim to deliver results on these key topics as a business:

• We have examined our own diversity and inclusion performance and have made public disclosures around recruitment and the make-up of senior leadership. We have set a target of gender parity of 50:50 by 2030 across the whole business. While this remains an ongoing journey, we have made real progress, with almost 70% of hires since March 2018 being female and increased female representation on the Executive and Investment Committees. Jennifer Mair, COO, discusses this more in the attached article.
• We have set ambitious targets in relation to our own Carbon Footprint. We have made a commitment to reduce our Carbon Intensity by 50% before 2030, and to offset 200% of any remaining emissions to become a net zero business starting this fiscal year.
• We have recently become a signatory to the Net Zero Asset Managers Initiative with the aim of aligning portfolios with net zero emissions by 2050.

“It is important we deliver on our purpose of Investing to Improve Lives across our business. When we generate market beating returns for our clients, profits for our financial stakeholders and good compensation for our employees, we can also do more to benefit the communities in which we operate.

“We are extremely proud of what we are doing to respond to the climate crisis, to foster a diverse and inclusive business, and how our investment teams work to deliver Outcomes Beyond Alpha through our active ownership agenda,” notes Mr Ide.

Read the latest Stewardship Matters.

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Jenny Johnson

The Franklin Templeton Investment groups and three of their affiliated specialist investment managers ClearBridge Investments, Brandywine Global and Martin Currie — are delighted to announce that they have joined the industry-leading Net Zero Asset Managers Initiative^[1]. These four signatories collectively represent more than US$948 billion in assets under management (AUM).

Launched in December 2020, Net Zero Asset Manager Initiative is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with aims for net zero emissions by 2050 or sooner. Delivery of the commitment also includes prioritising the achievement of real economy emissions reductions within the sectors and companies in which the asset managers invest.

As of today, the number of signatories consist of 128 investors who have $43 trillion in assets under management, a clear sign of the asset management industry’s recognition that climate change is an urgent priority that must be addressed.

Jenny Johnson, CEO and President of Franklin Templeton, said: “We are excited to make the commitment to the Net Zero Asset Managers Initiative alongside the growing community of signatories. We approach our journey with the clear acknowledgement that we must commit to finding the data and solutions to help us achieve global net zero emissions by 2050. We will work toward this goal in a spirit of authentic engagement and partnership with our clients and stakeholders, in keeping with our belief that good stewardship as a global asset manager means managing and allocating capital to benefit our clients across generations.”

An active manager, ClearBridge Investments is a top 20 shareholder in more than 275 public companies. Terrence Murphy, CEO of ClearBridge Investments, said: “ClearBridge is pleased to join the distinguished roster of signatories to the Net Zero Asset Managers Initiative. As stewards of our clients’ capital with a 30+ year history of integrating sustainability-related investment risks such as climate change into our stock selection process, ClearBridge recognises the urgency of accelerating the transition toward global net zero emissions. Using a partnership approach, ClearBridge will use its role as large shareholders to drive positive change through ongoing company engagement.”

Commitment to Net Zero

As part of the initiative, asset manager signatories have made nine commitments, including to:

• Set interim targets for 2030, for assets to be managed in line with the net zero goal, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate Change (IPCC) special report on global warming of 1.5°C,
• Take account of Scope 1 and 2 emissions and, to the extent possible, material Scope 3 emissions in investment portfolios,
• Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with the ambition for all assets under management to achieve net zero emissions by 2050 or sooner, and
• Create investment products aligned with net zero emissions by 2050 and facilitate increased investment in climate solutions.

Commenting on climate change as one of the greatest challenges and most defining issues of our time, Adam Spector, Managing Partner of Brandywine Global said: “Climate change is an urgent global threat and an underappreciated investment risk. Brandywine Global’s membership to the Net Zero Asset Managers Initiative underscores our commitment to assessing climate risks across capital structures and real economies. We look forward to continuing our ongoing dialogue with government officials and corporate management teams alike about the risks emanating from climate change. We are proud to be part of an initiative that we believe will positively influence the global economy and how companies operate.”

Julian Ide, CEO of Martin Currie concluded: “Martin Currie is delighted to be part of the Net Zero Asset Managers Initiative – a crucial response to improving transparency around climate risks, accelerating the adoption of net zero targets and providing a mechanism so that real-world emissions reductions are achieved. With the countdown to COP 26 in Scotland now well under way, countries are being asked to come forward with ambitious emissions reduction goals, action plans and interim targets that put us on a path for reaching net zero by 2050. To help achieve this, the asset management industry has an important role to play through its actions as long-term stewards of its clients’ assets, and is positioned to both incentivise the adoption of net zero targets and increase the flow of capital to companies providing climate solutions. As a global asset management business headquartered in Scotland, we believe we have an important platform for signalling the industry’s commitments to net zero at this critical time, and our commitment to this initiative is very much a part of that.”

Franklin Templeton’s Stewardship and Sustainability Council and the Global Sustainability Strategy Team have identified climate change as a key strategic priority for the firm and will be implementing this important agenda for change throughout the organisation, in collaboration with the internal stakeholders and clients.

Net Zero Asset Manager Initiative is managed globally by six founding partner investor networks:

• Asia Investor Group on Climate Change,
• CDP,
• Ceres,
• Investor Group on Climate Change,
• Institutional Investors Group on Climate Change, and
• UN PRI

In turn, the initiative is endorsed by The Investor Agenda, of which the investor networks are all founding partners, with the United Nations Environment Programme Finance Initiative.

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[1] Net Zero Asset Managers Initiative

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Julian Ide

Martin Currie, the active equity specialist investment manager of Franklin Templeton, and steward of A$25 billion in assets under management as of February 28, 2021, has significantly enhanced its analysis of environmental, social and governance (ESG) factors.

In its newly published annual stewardship report^[1], Martin Currie outlines its activities over the past year, which include mapping investee companies to the U.N.’s Sustainable Development Goals (SDGs) and creating a carbon value-at-risk model to calculate the potential impact of carbon pricing on a company’s earnings and market capitalisation.

At the same time, Martin Currie has increased its analysis of modern slavery risks across supply chains.

“Good stewardship is an integral part of our core purpose. It is gratifying that this sentiment is growing in the asset management industry but we know we all need to do more and act more quickly in order to make an impact,” said Martin Currie CEO Julian Ide.

“While we ceaselessly encourage our investee companies to take action, we recognise that we must hold ourselves to the same high standards. That is why we work every year to foster diverse and inclusive workplaces, to be trusted advisers to our clients, and to positively contribute to the communities where we live and work.”

Mapping to sustainable development goals

As part of its commitment to broaden ESG transparency and to demonstrate the rigour used in its analysis, Martin Currie mapped the activities of companies in which it invests against the 17 U.N. Sustainable Development Goal (SDGs).

“While the 17 goals set the overall framework, it’s the underlying 169 specific targets that are most relevant to companies. Our analysis has focused on the extent to which companies are able to address or contribute to the relevant targets with more of an emphasis on how – rather than just what – goods and services are delivered,” said David Sheasby, Head of Stewardship and ESG at Martin Currie.

“In a number of cases companies are already working through the various SDGs and selecting the appropriate goals and targets to align with their own operations. We believe that helping companies along this path with constructive dialogue is also an important element in achieving sustainable development.”

Carbon Value at Risk analysis

“COVID-19 temporarily upended the world’s operating assumptions but the pandemic also reinforced the importance of managing the even greater systemic risk posed by climate change,” Sheasby noted.

“Indeed, as the year progressed, we saw renewed policy efforts to reduce carbon emissions and, at a company level, climate change continued to be the dominant theme for our clients.”

As part of its continuing efforts regarding climate change, Martin Currie developed a proprietary carbon value-at-risk tool to analyse the sensitivity and potential impact of carbon pricing on a company’s earnings and market cap. This enables the firm to better understand the future impact of climate and energy policy changes on companies and, by extension, its portfolios.

Will Baylis, Portfolio Manager for Martin Currie Australia’s (MCA) Sustainable Equity strategy highlights: “The carbon value-at-risk tool is used directly in the portfolio construction process of MCA’s low-carbon focussed Sustainable Equity strategy and Green Value strategy to purposefully tilt away from those companies with high carbon risk and towards those with lower carbon risk.”

Modern slavery

Modern slavery is estimated to affect more than 40 million people worldwide; women and girls are thought to account for more than 70% of all victims.

While awareness of this issue is increasing, Martin Currie calls on asset managers to do more, specifically to monitor supply chains and ensure social exploitation is not present in companies’ operations.

Martin Currie recognises the risks presented by modern slavery and human rights breaches. As such, it has instituted a framework to identify risk factors and behaviours that may indicate a material risk of modern slavery within a business or its supply chain.

“While the perception is that social exploitation only occurs in emerging nations, recent high-profile cases in more ‘developed’ countries have shown that the problem is truly endemic. The globalised nature of supply chains means that modern slavery can be an invisible component in a range of everyday items, from the cars we drive to the clothes we wear. We are seeing increased demand for transparency on this issue from our clients,” Sheasby said.

Following the introduction of the Australian Modern Slavery Act which heralds new reporting requirements on modern slavery for Australian companies, the MCA investment team recently undertook a structured engagement with investee companies on modern slavery.

Reece Birtles, Chief Investment Officer for MCA said, “We reached out to 190 top ASX companies to question them on governance, policy, process and any incidents of modern slavery. After completing an in-depth review of all the responses, identifying best practice and where clear gaps exist, the results will be incorporated into our overall ESG framework and provide a focus for future engagements.”

Additional ESG Highlights from Martin Currie’s newest stewardship report include:

• Globally, the firm recorded 681 one-on-one engagements with 187 corporate management teams in 2020. The MCA team recorded almost 100 of these engagements.
• It voted on 5,271 resolutions across 543 shareholder meetings, demonstrating the firm’s commitment to investing that considers ESG factors alongside financial statements.
• It continued to refine its proprietary ESG scoring system. This dynamic approach helps portfolio managers consistently measure the way companies approach ESG. It also informs their engagements with investee companies and assists in guiding them toward positive change.
• It became a signatory of Climate Action 100+, an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. Martin Currie is the lead investor on an Indian cement company that is one of the target companies.

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[1] https://www.franklintempleton.com.au/downloadsServlet/?docid=kmhhlo2q

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