Articles, research and reports

  1. Sustainable Funds Group

    Climate Report: The race to zero

    Welcome to our climate report. In the report we share a baseline of our climate change-related risks, opportunities and impacts, from which our progress towards zero-carbon portfolios and operations can be assessed in the years ahead.
  2. Sustainable Funds Group

    Investment and sourcing through smallholder supply chains

    Smallholder farming directly and indirectly supports the livelihoods of many of the planet’s most vulnerable people, and coexists with some of its most diverse and ecologically threatened landscapes. Finding there was a lack of information around this topic, we commissioned research with NIRAS-LTS to learn more.
  3. Sustainable Funds Group

    Podcast: A sustainable conversation

    Pablo Berrutti, Senior Investment Specialist speaks to Wouter Klijn of the Investment Innovation Institute (i3) in Australia.
  4. Sustainable Funds Group

    The problem with ESG scores

    Sustainable investing is facing a wave of new regulation, seeking to improve transparency and standardise reporting requirements for sustainability funds. The intentions behind these regulations are laudable; to reduce greenwashing, help separate the wheat from the chaff, and reorient capital towards more sustainable companies.
  5. Sustainable Funds Group

    Trip Report: US

    The emergence of trends that will likely shape the next decade, including cloud computing, automation, connectivity and artifical intelligence (AI), has created some appealing honeypots for investors to dip their paws into. These companies are often well positioned in the face of broad sustainability tailwinds and characterised by steady growth streams, so one can understand the allure.
  6. Sustainable Funds Group

    Proxy Voting Policy and Guidelines

    We believe judgement is a better guide to voting than a rules-based approach. Our voting policy is based on a parsimonious set of principles and key considerations that in our judgement are likely to be applicable to all companies in the vast majority of circumstances.
  7. Sustainable Funds Group

    How big is big enough?

    Today’s technology giants have many admirable qualities. However, it is prudent to question their ongoing contribution to sustainable development. Their size, dominance and the concentration of power, information and wealth in the hands of so few does not bode well for broad-based development.
  8. Sustainable Funds Group

    Company Interview: Watsco Inc

    Watsco are the largest distributor of HVACR products in North America, with over 657 stores throughout the country. We sat down with current president, A.J. Nahmad, to understand Watsco’s unique compensation philosophy, and how that plays a role in building and instilling an ownership culture and a long-term orientation.
  9. Sustainable Funds Group

    Exploring outside the lines

    We believe the true drivers of sustainable development are to be found in people and enterprises, from the bottom up.
  10. Sustainable Funds Group

    Our Human Development Pillars

    Jack Nelson discusses the team's framework for considering human development and how our portfolios can contribute to this.
  11. Sustainable Funds Group

    What makes us different?

    Since 2005, sustainable investing has entered the mainstream under many different guises. Rob Harley of the Sustainable Funds Group discusses what they remain focused on.
  12. Sustainable Funds Group

    The Power of Story

    In a recent essay, Santa Fe economist Brian Arthur challenges economists to describe the world in more than algebraic terms. He believes they should extend their vocabulary (and minds) to include verbs, alongside their highly prized nouns, to allow the underlying processes, context and organic nature of complex systems to be described in full technicolour.
  13. Sustainable Funds Group

    Company Interview: HDFC

    The CEO of HDFC discusses the company’s history, culture and how their services are evolving to consider the growing risks of climate change.
  14. Sustainable Funds Group

    Diversity statement

    Diversity is an integral part of sustainable development and is important to us as investors, employers and as members of society.
  15. Sustainable Funds Group

    Why does stewardship matter in emerging markets?

    Emerging markets have long been understood as geographies of uncertainty. Political turmoil, currency fluctuations, and poor governance are common themes amongst headlines about emerging markets investing.
  16. Sustainable Funds Group

    Making a difference through science and innovation

    Sashi Reddy and David Gait of the Sustainable Funds Group speak to G. V. Prasad, Chairperson and Managing Director at Dr. Reddy’s an Indian pharmaceutical company.
  17. Sustainable Funds Group

    Is Europe leading the way in sustainable business?

    Europe is seldom considered the most exciting place to invest. This is mainly because European index returns – a proxy for average market returns – have been modest over most time frames. But Europe offers some excellent investment opportunities for active investors willing to seek out its treasures.
  18. Sustainable Funds Group

    Climate change statement

    We launched our first sustainable investment fund in 2005. At that time we were convinced all companies would need to adjust to operating in an increasingly carbon-constrained world, and more companies would need to develop solutions to make economies less carbon intensive. Our conviction has never waned, nor has the urgency of the carbon-reduction challenge.
  19. Sustainable Funds Group

    The magic of microbes

    With potential scenarios from the World Health Organisation predicting a possible 10 million deaths by 2050 caused by multidrug-resistant bacteria, and the abundance of chemicals and antibiotics in our food supply chains, there is cause for concern.
  20. Sustainable Funds Group

    Good Old-Fashioned

    We often introduce ourselves to prospective clients, friends and strangers as “good old-fashioned, long-term investors”. In an environment where returns are counted by the day, there is a tendency to equate this approach with being stuck in the past and out of touch with the future. Let’s challenge this perception.
  21. Sustainable Funds Group

    Emerging markets’ new generation of tech firms

    Over the last decade, the role and prominence of technology companies in emerging markets has increased markedly. Emerging markets economies have proven themselves capable of producing truly world-leading tech firms. And as smartphone penetration has surged, the positive impact of technology on daily life in emerging markets has been very significant.
  22. Sustainable Funds Group

    Paying a fair corporate tax rate matters

    Paying a fair rate of corporate tax is an important contribution that companies make to society. If companies are proactively seeking to minimize their tax payments, this should be seen as a red flag.
  23. Sustainable Funds Group

    Reasons to invest in Europe

    Even investors who get excited about investing in European equities can understand why many people don’t. A great many savers think their investment options are limited to the average market return provided by an index-tracking fund. And the average returns of European index investments look very average, over almost any time period.
  24. Sustainable Funds Group

    The importance of culture

    While a strong culture can sustain a business, a toxic culture can break it. As sustainable investors, it’s always important to understand how the culture of companies we invest in can impact how they treat their employees and customers and, ultimately, influence the wider world.
  25. Sustainable Funds Group

    Indian Subcontinent: the decade ahead

    The Strategy did well in 2020, thanks in part to the generosity of central banks globally, while the real economy tried to shake off a pandemic. However, we believe that the real opportunity for investors in the subcontinent should be in the decade ahead. We are optimistic for two reasons.
  26. Sustainable Funds Group

    Learning from success: CAMFED

    Education is not freely available to everyone - and in many parts of the world girls are the first to be excluded from it. Girls are the first to drop out of school, and the first to be failed by the system, facing the perils of early marriage, early pregnancy, and abuse. Without the choice to write their own futures, their endless potential is wasted.
  27. Sustainable Funds Group

    Why do Payable Days matter?

    ‘Payable Days’ is the number of days a company takes to pay its suppliers. Investors often learn in ‘Finance 101’ courses that the longer a company takes to pay its suppliers the stronger its bargaining power is with them. Consequently, this is considered as key evidence of a strong franchise. We beg to differ.
  28. Sustainable Funds Group

    Regulatory developments in sustainable finance

    2020 saw regulatory developments in sustainable finance reach new levels globally, but particularly in Europe. These developments, combined with a global pandemic, unprecedented wildfires, and a renewed focus on social movements like Black Lives Matter, put sustainable finance under the spotlight more than ever.
  29. Sustainable Funds Group

    Diversity: An indicator of distinctive cultures

    One of the key tenets of our investment philosophy has long been a focus on the cultures and people behind businesses. We believe that franchises that are successful over the long term are built on the backs of unique cultures that have the wherewithal to resist short-term pressure in favour of nurturing a sustainable business over decades, have the ability to think diversely about the opportunities ahead and the risks they might face, and the operational focus to deliver on their strategies year after year.
  30. Sustainable Funds Group

    Company contributions to sustainable human development

    Since our first sustainable development-focused strategy launched in 2005, human development has been a key focus area given our long history of investing in Asia Pacific and emerging markets.
  31. Sustainable Funds Group

    Through the Looking Glass

    In the sequel to Lewis Carroll’s ‘Alice in Wonderland’, Alice climbs ‘Through the Looking-Glass’ and finds another fantastical world, absent of reason and where everything is reversed. This crisis of logic is all too evident when in investing in Asia Pacific.
  32. Sustainable Funds Group

    Statement on racism and racial diversity

    We recognise the existence of inequality and institutional racism across the world – we share the horror felt by so many as we have witnessed events that highlight the inequality, prejudice and sheer injustice faced by members of the black community the world over.
  33. Sustainable Funds Group

    Rainbow washing the SDGs away

    The Sustainable Development Goals (SDGs) have been broadly embraced by financial institutions. This is a positive move, and timely too.
  34. Sustainable Funds Group

    European Sustainable Finance Consultation

    Stewart Investors wrote to the Directorate-General for Financial Stability, Financial Services and Capital Markets Union in response to aspects of the Renewed Sustainable Finance Strategy.
  35. Sustainable Funds Group

    Active versus passive

    Growing investor concerns about climate and societal crises have contributed to the burgeoning demand for ‘sustainable investment’ funds that take into consideration environmental, social and governance (ESG) factors.
  36. Sustainable Funds Group

    Companies supporting the fight against COVID-19

    The COVID-19 pandemic is having a devastating personal and economic impact worldwide and there is an urgent need for governments, companies and individuals to play their part in helping to slow the spread, protect the vulnerable and minimise the human and economic toll.
  37. Sustainable Funds Group

    Trip report: India

    The ongoing crises making their way through the Indian financial system are indicative of the years of irrational exuberance in the decade prior.
  38. Sustainable Funds Group

    Implementing the Sustainable Development Goal 12

    The United Nations Sustainable Development Goals (SDGs) provide a clear and vital framework around which investors and the broader business community can unite to achieve a collective goal of cleaner business practices. One goal which many investors and businesses are placing emphasis on is SDG 12: Responsible Consumption and Production.
  39. Sustainable Funds Group

    SEC Letter: Proxy Voting

    We have made a submission to the US Securities and Exchange Commission (SEC) on proposed changes to proxy advisors and shareholder resolutions.
  40. Sustainable Funds Group

    Challenging the greenwash

    Our philosophy at Stewart Investors is to invest in ‘quality companies’ and our process for identifying them has incorporated a rigorous evaluation of ESG for over three decades. However, our analysis of ESG has never stood in isolation, and must be taken together with assessment of management, franchise and financials.
  41. Sustainable Funds Group

    Diversity update

    In 2019, we commissioned a research project with the University of Technology (UTS) in Sydney to compile a set of recruitment and retention policies that have been implemented across geographies, industries, and organisations and can be tied to tangible improvements in diversity outcomes. This report, entitled Improving Gender Diversity, was completed a few months ago. It lays out a list of 13 tools that have been successfully used to recruit and retain women in organisations.
  42. Sustainable Funds Group

    Tackling plastic pellet loss throughout supply chains

    As it is just over 12 months since we instigated the plastic pellet loss investor initiative, we thought we would take the opportunity to provide you with an update and summary of progress since our last update in March 2019.
  43. Sustainable Funds Group

    Trip report: Brazil

    Recent history in Brazil has seen a push towards identifying and weeding out the linkages between corporate and political networks that have intertwined over decades to breed a culture of impunity.
  44. Sustainable Funds Group

    Small is beautiful

    This rule of thumb was coined in order to combat a common challenge facing teams trying to solve complex problems. In pursuits like investing, there is a tendency to increase the number of people providing input to the point that the team gets bloated and functions less efficiently.
  45. Sustainable Funds Group

    Quality & Patience

    Today, asset owners have an unprecedented range of options of where to invest and an even greater number of well-argued reasons for why each of these will be the most attractive home for their capital. Aggressive, untested monetary policy has helped fuel years of above-average equity returns, encouraging many of those who run these strategies to predict handsome returns for investors.
  46. Sustainable Funds Group

    Our Hippocratic oath in action

    Our Hippocratic oath is something we all hold dearly and have all signed. It underpins our investment philosophy, which is based on identifying quality stewards of strong franchises with good long-term prospects.
  47. Sustainable Funds Group

    Should your clients quit sugar?

    By April 2018, 31 countries will have imposed a tax on sugar to tackle the worldwide epidemic of obesity.
  48. Sustainable Funds Group

    How we select companies

    We have often been asked how we narrow down a universe of 15,000 Asian and Emerging Markets companies to a portfolio of approximately 50. It’s a good question, particularly as now that we invest globally, giving us an investible universe of 65,000 companies, the challenge has become even starker.
  49. Sustainable Funds Group

    Dual Share Class Blundering

    We used to send letters to companies and stock exchanges extolling the virtues of single share classes, tag along-rights and ‘one share, one vote’. Today, we actively seek out companies with dual share classes. What has changed?
  50. Sustainable Funds Group

    Family companies are the real attraction of investing in Asia

    Why is Asia still regarded as a separate asset class by investors? At first glance, it looks like an artificial construct, made up of 15 countries with very little in common, other than crude proximity on a global map.
  51. Sustainable Funds Group

    Sustainable palm oil?

    Recent forest fires across Malaysia and Indonesia cast a haze over many parts of Southeast Asia.
  52. Sustainable Funds Group

    Tax Approaches

    We consider the tax rates paid by companies that we might invest in on behalf of our clients important because it impacts our assessment of Quality of Management, Franchise and Financials.
  53. Sustainable Funds Group

    The Sharing Economy

    Sharing resources has gone on for as long as humans have been living in tribes. But without the enabling role of the internet or mobile devices it is hard work in a large complex society with a myriad of goods and services. The internet is now helping to solve this problem.
  54. Sustainable Funds Group

    Green Bookkeeping

    In 2010, Puma pioneered a new form of corporate reporting. The German sportswear company produced an environmental profit and loss account, which estimated the company and its supply chain to have caused €145m of environmental damage that year, relative to €202m of net profit.
  55. Sustainable Funds Group

    Does Fund Management have a social purpose?

    The stock market and bond market have their origins in the financial revolution of the late 17th century. The stock market developed to provide funds for overseas trading companies, like the English East India Company, while the bond market funded the state, mostly raising funds for waging of war.
  56. Sustainable Funds Group

    The Circular Economy

    US clothing retailer Patagonia famously encouraged consumers not to buy their jackets in 2011...
  57. Sustainable Funds Group

    Alice in Financeland

    At first glance, there is little about the current financial system that makes sense. The more one looks, the less sense it makes. In theory the financial sector is supposed to support the long-term growth of the real economy. In practice, it has become so detached from the real world that it is more akin to a fantasy land, inhabited by a growing number of peculiar characters undertaking nonsensical tasks. Lewis Carroll’s Alice would be very much at home.
  58. Sustainable Funds Group

    The Plastics Paradox

    Plastic is wonderful stuff. It is lightweight, so less carbon intensive to move around. It is durable, mouldable and less energy intensive to make than aluminium or glass. It helps reduce food waste and decreases the risk of food contamination.
  59. Sustainable Funds Group

    Opinion piece on Unilever

    Investors are underestimating Unilever’s sustainability success story.
  60. Sustainable Funds Group

    Trip report: Japan

    The below image is a sign from a packed subway line en route to the bullet train at Shinagawa Station. A sign that initially amused but then began to hold more power as a metaphor as the trip went on. In most other countries, a sign highlighting the pain that comes from getting trapped in a train door would be enough to deter passengers from trying their luck with some automatic doors.
  61. Sustainable Funds Group

    Trip report: India and Taiwan

    “Dabur before self”, responded Mr Duggal, the CEO of Dabur, when we asked what he is looking for in his successor. Stewardship is central to our investment philosophy at Stewart Investors, and the importance of the quality of incoming leadership cannot be understated. The risk, however, is that we arrive at conclusions too quickly or use the wrong measuring tape.