Baillie Gifford Global Stewardship Fund

Product Name	Baillie Gifford Global Stewardship Fund
Issuer	Baillie Gifford Investment Management
Category	Investment
Type	Fund or Trust
Target	Retail, Wholesale
Certified Since	2021

Asset Classes	International equities
Markets	Australia
Investment Approaches	ESG Integration, Positive Screening
It Includes:	Education Healthcare and medical products Renewable energy and energy efficiency Sustainable land and agricultural management Sustainable transport
It has some level of screening for:	Alcohol Armaments Fossil fuels Gambling Human rights abuses Labour rights violations Pornography Tobacco
It fully excludes:
Broker	Responsible Returns
URL	https://www.responsiblereturns.com.au/investment-options/baillie-gifford-global-stewardship-fund/profile

Overview

The fund is a stock-driven global equity strategy with a focus on growth companies and long-term, low turnover approach. The fund combines expert regional stock picking with a global perspective in portfolio construction to produce a portfolio consisting of growth companies that will look very different to the benchmark index. Baillie Gifford’s approach to stewardship is at the heart of the strategy, both as a feature of the companies held by the fund and in Baillie Gifford’s responsible long-term shareholder approach. The fund does not hedge currency risk.

Description

The Global Stewardship investment philosophy is based on exploiting three main behavioural inefficiencies ever present in equity markets: short-termism, herding and the mispricing of growth. In addition, the investment team believes that good governance and stewardship are vital to the long-term success and growth of a company, as well as in the interests of the world at large. The team incorporate these issues into their stock research through a series of stewardship-focused questions, and then encourage best practice on governance and sustainability matters in investee companies through engagement with company management. Baillie Gifford looks for stocks that satisfy five key criteria.

The GEARS of Global Stewardship:
• Growth – How quickly can the company grow and for how long?
• Edge – What is the company’s source of sustainable advantage?
• Alignment – Do management act like owners?
• Returns – What will long-run profitability look like?
• Success – How do we double our money?

The decision-making process is designed to allow controversial, idiosyncratic ideas into the portfolio, so group consensus is not required. The Baillie Gifford process bypasses some of the behavioural issues involved with committee-style decision making and results in a different, exciting portfolio.

Negative Screening:
In addition to the rigorous vetting process described above, the Global Stewardship portfolio is also subject to two types of ethical screen.
Sector-based screen – prevents investments in any companies that derive more than 10% of their annual revenues from:
• the production or sale of tobacco, armaments or alcohol • gambling or adult entertainment related activities
• fossil fuel extraction. Performance-based screen – assesses companies against the principles of the United Nations Global Compact for business. These principles cover the following areas:
• human rights
• labour rights
• environmental safeguards
• combating bribery and corruption.

The principles are a ‘minimum bar’ standard for responsible business. Baillie Gifford use third-party data providers to assist with the determination of revenue by product category and minimum standards for responsible business. Baillie Gifford’s Head of Governance & Sustainability, a Global Stewardship team member makes the final decision with respect to which companies it excludes.

Positive screening:
The Fund also apply three ‘positive inclusion factors’ that aim to ascertain if these companies add value to society in the long run, balance the needs of all stakeholders and exhibit a culture of responsible business

*RIAA has received undertaking from product issuer to update ESG-crtieria, assessed as part of certification, either at:

Next roll of product collateral, Internal policy update and/or
Next reporting/disclosure cycle

Performance results

Product holdings

Product documentation

Supporting documents

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The products featured on this site have all achieved certification under the Responsible Investment Association Australasia’s (RIAA) Responsible Investment Certification Program.

Transparency & Verification

What sets these investment products aside from regular ones on the market is they all have some type of responsible or ethical strategy applied to them.

At a minimum, their issuers explain these strategies in public documents and open their offices and books to third party verifiers who check these strategies are implemented according to what you read about them publicly.

You can also click through to see the underlying managers and / or stock holdings in each certified product as well as access a certified product’s recent performance results.

Stewardship & Impact

In July 2019, we lifted our requirements of certified products which we are phasing in over 18 months.

We now require that issuers have organisation-wide commitments to responsible investing and they exercise their responsibilities as stewards of your money - through engaging with companies to improve sustainability performance and voting on shareholder resolutions where possible. All certified products now need to at least avoid significant harm and their issuers will annually report against any sustainability-based claims made by their products. This uplift in program standards is part of our passion for, and on-going commitment to, responsible and ethical investing.

Even though we're lifting the bar, we know your convictions to doing good with your money may be higher and so we have served up our member's certified products with a large dose of transparency and independent verification, so that you can draw your own conclusions from reliable information and choose investments that best suit your individual needs.

*Information Disclosures

While all reasonable efforts are undertaken to ensure information and links on site are current there may be instances where information and documents are updated during the course certification (eg. PDS, Fact Sheet). Certified product issuers are required to update this information as soon as possible on the Responsible Returns site, but there may be some extenuating circumstances impacting timeframes.

The certification program may also assess information provided for certification based on proposed future changes to a responsible investment process that is in-line with Responsible Investment Association Australasia’s (RIAA) Responsible Investment Certification Program criteria. In such instances, members are similarly required to update this information on Responsible Returns within an agreed future timeframe. Old document versions may be reflected on site until this process is finalised.