Quarterly Client Update

We provide regular strategy updates including portfolio changes and proxy voting, and links to our investment rationales, latest articles, statements, webcasts and videos which explore our thinking on sustainable investment, including the challenges and issues we grapple with in our search for high-quality companies.

Strategy updates: portfolio changes & proxy voting

Find out the latest updates on the strategies we manage including significant portfolio changes and proxy voting:

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Stories of sustainable investment

Our investment process starts with a blank page, not a benchmark.

Below are links to our latest articles, statements, webcasts and videos which explore our thinking on sustainable investment, including the challenges and issues we grapple with in our search for high-quality companies.

We believe that our focus on quality, sustainability positioning and stewardship should reward both patient investors and society. We hope our content highlights the careful and deliberate way we invest and engage with companies – both when we get it right and when we do not.

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Other news

Collaborative engagement: Tackling conflict mineral content in the semiconductor supply chains

“As a shareholder you should want us to care about conflict minerals … to address it”.

Brian Krzanich, CEO of Intel, 2014.

We were overwhelmed with the support this initiative received, totalling 160 investors with collective assets under management of US$6.59 trillion1. It is clear that the investor community recognises the challenges of mineral sourcing within the semiconductor supply chain, and believes more action is required in order to develop conflict mineral-free supply chains and improve industry practice.

A brief recap of the conflict mineral issue

There have been five broad trends impacting the sourcing of Tin, Tungsten, Tantalum, Gold and Cobalt (known as conflict minerals (CMs)):

  • The mining of these minerals has shifted from Australia and Canada to central Africa.
  • Smelting & refining (SORs) capacity has moved to Asia. SOR ownership is increasingly Chinese.
  • Frameworks on mineral traceability have stagnated. The OECD guidance is over five years old.
  • Regulation and public opinion are forcing greater scrutiny of complex supply chains.
  • High demand for semiconductors could encourage corner cutting in the sourcing of minerals.

Examination of a small sample of conflict mineral statements suggests that progress has been disappointing since an academic study of 1300 companies in 2015 found:

“The reports ultimately reveal shallow, almost cynical, compliance with poorly crafted rules built on a regulatory paradigm better suited to simpler contexts”. The Conflict Minerals Experiment. Jeff Schwartz. P133.

Despite valiant efforts, some conflict mineral statements show that progress is slow and that confidence in companies’ ability to track the provenance and integrity of minerals is low.

To this point, a central and candid sentence in the conflict mineral statement of one large American equipment manufacturer in 2021 has not meaningfully changed since the company started producing their SD form² for the SEC in 2014: 

For the significant majority of smelters reported by the Surveyed Suppliers, there is inadequate information available to assess the source of the conflict minerals they process. Therefore, for Covered Products manufactured in 2020… concluded in good faith that it lacks sufficient information to trace the chain of custody of any conflict minerals contained in its Covered Products up through the supply chain to a specific smelter or, in turn, to a country or mine of origin”.

The problem has not gone away and the associated human rights abuses are still evident. Only at the beginning of April we became aware of a crowd funding initiative to help finance legal proceedings against large technology brands by families from the Congo³. This points to intensifying reputational headwinds.

What have we done so far?

With the support from signatory investors, on 30 November 2021, we wrote to 29 companies. In the letter, we have encouraged the companies to: 

  • Develop and invest in technological solutions to improve traceability, possibly blockchain.
  • Increase transparency and reporting on minerals from mine to product.
  • Encourage and participate in industry wide collaboration to improve industry practices.
  • Impose and enforce harsher sanctions on non-compliance.
  • Reduce demand for new materials by improving recycling initiatives.

To date we have received a response from 21 of the companies. We have requested meetings with all the companies that have responded to the letter, and to date we have had meetings with eight companies.

What have we found?

  • The industry made an early decision to trace minerals in the downstream from smelters or refiners (SORs) and not in the upstream, from the mines. This means that the problem of mineral mixing before the minerals arrive at the SORs materially hinders the tracing of mineral provenance from mine to product.
  • The industry places a heavy reliance on the processes and assurances provided by the Responsible Mineral Initiative (RMI). Yet the RMI states clearly: “This assurance process does not result in a material certification nor does it determine that material at the company is “conflict-free” or is otherwise free of human rights abuses in the supply chain”.
  • Despite relying on suppliers for information, there is little industry collaboration. One foundry said fears of collusion, as with price fixing, was an issue and an explanation.
  • The RMI is considered to be the pinnacle of industry collaboration and yet some companies had little knowledge of the RMI. We note the RMI represents ten industries and is not dedicated to semiconductors.
  • Conflict minerals remain an issue still to be integrated into many senior executive committee agendas.
  • Few companies appear to be going beyond the requirements prescribed by OECD framework, as adopted by the RMI.
  • No company interviewed, so far, has committed budget for research on conceptual/unproven technological solutions, like blockchain.  A chicken and egg scenario was commented on here.

Have we achieved anything?

  • Many companies have asked for suggestions on how they could do more and we have been asked to share any good ideas/better practices we may identify during this engagement.
  • One company, which was previously unfamiliar with the RMI, now plans to pay for RMI services.
  • A foundry stated that this letter, with the weight of interest from investors, will raise the prominence and profile of the conflict minerals issue to the board level.
  • Another foundry suggested they would consider committing budget to research on conflict minerals tracing.


It is extremely early days for this multi-year engagement but it is clear that tracing mineral provenance is an extremely complex challenge for companies. Progress is slow. While there is a unanimous desire to improve practices, some companies are more eager and able to meet this challenge than others. Surprisingly, the strength of ambition to improve practices has been independent, so far, of company size or industry prominence. This may point to complacency within certain areas of the industry.

We will continue to update you on any progress we make and any challenges we encounter.


[1] As at 30 November 2021

[2] An SD form is a specialised disclosure report used for investment disclosure reports outside the typical filing categories for the U.S. Securities and Exchange Commission (SEC) forms. SD reports include Conflict Minerals Disclosures and Responsible Sourcing reports.

[3] International Rights Advocates. Multinational companies are liable for human rights abuses within their supply chains

Reference material

Morningstar Awards

We are delighted that Stewart Investors Sustainable Funds Group has won the inaugural Fund Manager of the Year – Sustainable Investing category at the 2022 Morningstar Australia Awards; as well as the Best Asset Manager - Sustainable Investing category and the Best Global Equity Fund for the Stewart Investors Worldwide Leaders Sustainability Funds (USD ACC) at the 2022 Hong Kong Morningstar Awards for Investing Excellence.

First Sentier Investors announcement

On 1st March 2022, First Sentier Investors announced their decision to proceed with the closure and orderly wind-down of the St Andrews Partners investment team. This does not lead to any significant changes to the Sustainable Funds Group.

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Porfolio Explorer

We focus on understanding the contributions individual companies make to sustainable development. We believe that qualitative assessments are as important as quantitative measures and understanding the real-world impact that companies have and the challenges they face requires context and nuance, which are best expressed in stories rather than sustainability scores that often conceal more than they reveal.

This interactive tool tells the sustainable development stories of the companies we invest in across our strategies, and the contribution companies are making towards climate solutions, human development or the Sustainable Development Goals. The tool can filter, tap and switch between views in order to explore the different ways in which we believe the companies are making the world a better place.

Portfolio holdings

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