The Maple-Brown Abbott Responsible Investment Fund is an actively managed Australian share fund that delivers responsible investment through the adoption of an integration, engagement and negative screening strategy. The fund does not invest in companies that derive a material proportion of their reported revenue or profit from the sale of alcohol, tobacco, armaments, gambling, pornography, uranium, thermal coal and thermal coal fired power generation.
The Maple-Brown Abbott Responsible Investment Fund is an actively managed Australian share fund that delivers responsible investment through the adoption of an integration, engagement and negative screening strategy. Maple-Brown Abbott’s long term investment horizon enables us to take a long term view on environmental, social and governance (ESG) factors, and our often material shareholdings engenders long term, influential relationships with the Board and management of our portfolio companies which positions us to influence change. The Maple-Brown Abbott Responsible Investment Fund has been certified by the Responsible Investment Association Australasia (RIAA) according to the strict operational and disclosure practices required under the Responsible Investment Certification Program.
Maple-Brown Abbott use our proven value investment philosophy and disciplined investment process to select stocks for their perceived fundamental value and the potential for capital growth over the long term. Our bottom-up stock selection approach is based on detailed analysis prepared by our experienced investment team, with all investment decisions based on research prepared using internal forecasts and analysis. This analysis includes the identification and discussion of ESG factors and, where material, their valuation impact and incorporation into portfolio construction. Further, where material ESG factors are identified, we seek to engage with these companies to effect change and realise potential value over the long term.
Stocks deemed to be priced at an attractive discount to our assessment of their underlying value are then negatively screened against our range of responsible investment criteria for inclusion in the fund.
Our methodology for taking into account ESG factors is set out below.
We do not invest in companies that derive a material proportion of either their reported revenue or profit, adjusted to reflect their underlying economic interest, from any one or more of the following business activities:
- the manufacture, promotion, distribution or sale of alcohol or tobacco
- gambling or betting or businesses directly connected to these activities
- the manufacture, promotion, distribution or sale of weapons or armaments
- the production, sale or distribution of ‘X’ or ‘R’ rated images, videos or films
- the extraction and sale of uranium
- the extraction and sale of thermal coal and the generation and sale of electricity from thermal coal fuel sources.
We estimate the level of a company’s revenue or profit derived from any one or more of the business activities listed above. If exposure to any of these business activities is via an interposed vehicle then we ensure a more stringent threshold is applied by looking beyond reported consolidated figures if necessary to recognise the true underlying economic interest. We then assess materiality according to the following scale:
- if less than 10% of revenue and less than 10% of profit, then we believe these are non-core activities and not a material proportion of the company’s business
- if more than 20% of revenue or profit, then this is a material level of activity and the company would be excluded from consideration
- if more than 10% but less than 20% of revenue or profit, then we have discretion to decide whether this level of activity is material or not. Considerations for making this determination would include, but would not be limited to, the prominence of the promotion of these activities by the company and the likely future significance of these activities.
In determining whether the above criteria are met, we also take into account the parent and subsidiaries of the relevant company.
The level of a company’s revenue or profit from these business activities, and any impact on materiality, is reviewed twice each year by the portfolio manager responsible for this Fund. If an investment no longer meets our range of responsible investment criteria, it will be sold as soon as reasonably practicable.