Responsible Investment Policy

Responsible Investment Policy


At Oakham Wealth Management, we are committed to integrating responsible investment practices throughout our investment decision-making processes. We recognize that environmental, social, and governance (ESG) factors can significantly impact investment outcomes and believe that responsible investing is not only a fiduciary duty but also crucial for long-term sustainable growth. This policy outlines our approach to responsible investment, including our stance on our overarching themes of climate change and biodiversity loss, while going further into environmental, social and governance factors. It also outlines our guidelines on stewardship and engagement with fund managers to ensure the alignment of their activities with our responsible investment goals.

Overall Approach to Responsible Investment

2.1 Investment Philosophy

Our investment philosophy is centred around achieving sustainable, long term risk-adjusted returns for our clients while considering the impact of our investments on the environment, society, and governance practices. We seek to generate attractive risk-adjusted returns by integrating ESG considerations into our investment decision making processes across all asset classes. We seek quality companies with strong balance sheets operating in markets with high barriers to entry that we would personally like to hold for the long term. For us, it has always been that these companies must take into account forward looking risks and be willing to reinvest in their own business models to address them, which perfectly goes hand in hand with addressing sustainability risks.

2.2 ESG Integration

We believe that incorporating ESG factors into our investment analysis leads to a more comprehensive assessment of investment risks and opportunities. We integrate ESG considerations throughout our investment process, including asset selection, portfolio construction, and ongoing monitoring and engagement. Our objective is to identify and invest in companies that demonstrate strong ESG practices and are aligned with the principles of responsible investment, as well as our in-house commitments.

Overarching ESG Themes

Climate Change

3.1 Net Zero Asset Manager

As a responsible asset manager, we are committed to addressing climate change and reducing carbon emissions. As such, we aligned ourselves with the Net Zero Asset Manager’s Initiative. Our key targets and outcomes in this area include:

  1. Achieving net zero carbon emissions across our investment portfolios by 2030 or sooner.
  2. 80% of our portfolio companies have set Science Based Targets by 2025 or sooner.
  3. Incorporating climate risk assessments into our investment decision-making processes.
  4. Engaging with companies to encourage and support their transition to low-carbon business models.
  5. Monitoring and reporting progress toward our climate-related goals regularly.

Biodiversity Loss

4.1 Addressing Biodiversity Loss

We recognise the urgent need to address biodiversity loss and its potential impacts on our investments. Economies and more specifically a significant proportion of GDP globally rely on biodiversity and ecosystem services. With climate change, this is an overarching theme to our sustainable investment decision making as we see both as materially impacting our investments over the long term. We support the Finance for Biodiversity Foundation. Our key targets and outcomes in this area include:

  1. Incorporating biodiversity considerations into our investment analysis and decision making processes.
  2. Supporting investments in companies that prioritise biodiversity conservation and sustainable land use practices.
  3. Engaging with companies to promote biodiversity conservation and improve their biodiversity related disclosures.
  4. Monitoring and reporting progress toward our biodiversity related goals regularly.

Portfolio ESG Themes

5.1 Investible Themes

To address our two key themes of Climate Change and Biodiversity Loss, we have identified more directly investible themes that help to construct our portfolios and focus our research.

5.2 Clean Energy

This is likely to continue to be a dominant theme for the next 10 to 20 years. Most Governments and many organisations are committed to becoming carbon neutral in line with commitments made to the Paris Agreement. As pressure to make new commitments or act on existing promises ramps up, clean energy is likely to see significant investment flows, reflecting an increase in demand for renewable energy sources. We have identified key areas within this sector to invest in along the value chain:

  1. Renewable energy – generation of power, including onshore & offshore wind and solar.
  2. Critical enabling technologies – energy storage and semiconductors.
  3. Energy efficiency – efficient manufacturing, green buildings, and smart mobility
  4. Infrastructure – power generation, networks and grid technologies.

5.3 Sustainable agriculture

There is a strong demand for sustainable land use which will produce more food and of a higher quality at affordable prices while maintaining biodiversity. Investors are likely to benefit from long-term returns as global food demand increases. It is key within our research that companies ensure they adhere to their social and governance responsibilities. Sustainable Agriculture cannot be at the detriment of labour standards. Our key areas to target this go hand-in-hand with that of healthy living and nutrition.

5.4 Healthy living and nutrition

Nutrition has long been an area that has been underinvested compared with sectors linked more clearly and directly to climate change. Consumer trends and lifestyles have changed dramatically in recent years, especially following the pandemic. There has been a noticeable shift towards healthier and more sustainably produced food. This investment theme provides exposure to nutrition, healthy lifestyles, healthcare, and physical and mental health improvements. Areas we have identified to target in this area include:

  1. Growing populations and consumption.
  2. Increased urbanisation and living standards.
  3. More efficient use of natural resources as we deplete them more and impact biodiversity.
  4. Waste and emissions.
  5. Health, obesity & malnutrition, foodborne illness & zoonoses, antibiotic resistance.

5.5 Water and waste management

Water scarcity and water stress are threatening the health and development of communities around the globe. Historically, investors held utilities in order to support this theme; however, our focus is more on sustainable water management. Water underpins almost everything, something we tend to take for granted in a developed market where it is easily accessible. In emerging countries, access to clean water and sanitation can save lives. Even within the developed world, there are opportunities for investors within public and private industry to invest in upgrading their now outdated infrastructure.

  1. Capital goods and chemicals.
  2. Construction and materials.
  3. Quality and analytics.
  4. Utilities – water utilities, waste management, more efficiency in manufacturing and agriculture.

Social and Governance Factors

6.1 Social Factors

We believe that considering social factors is essential for responsible investment. Worker productivity is intrinsically linked to social factors and is now a key consideration for many business models. Our key targets and outcomes in this area include:

  1. Integrating social considerations, such as human rights, labour standards, and community impacts, into our investment analysis.
  2. Investing in companies that demonstrate a commitment to diversity, inclusion, and fair labour practices.
  3. Engaging with companies to improve their social performance and enhance transparency on social issues.
  4. Monitoring and reporting progress toward our social related goals regularly.

6.2 Governance Factors

We recognise the importance of strong corporate governance practices in protecting shareholder interests and ensuring sustainable business practices. Strong governance remains a material advantage to companies looking to sustainably grow their business and enact real internal and external change for good. Our key targets and outcomes in this area include:

  1. Integrating governance considerations, including board independence, executive compensation, and transparency, into our investment analysis.
  2. Voting our proxies in a manner that supports good governance practices and aligns with our responsible investment principles.
  3. Engaging with companies to advocate for improvements in governance practices and disclosure.
  4. If invested through fund managers, making sure that they are voting and analysing how they are voting. As well as this, how they are engaging with their investee companies and regularly monitoring their activities and outcomes.
  5. Monitoring and reporting progress toward our governance related goals regularly.

Stewardship and Engagement

7.1 Stewardship Principles

We are committed to exercising our rights and responsibilities as shareholders by engaging with the fund managers of the funds in which we invest. Our stewardship principles include:

  1. Encouraging fund managers to integrate responsible investment practices.
  2. Making sure their practices are sound and reviewing real examples of where they have enacted their engagement activities.