Ethical Partners Funds Management

Thank you very much to the Principles for Responsible Investment for including Ethical Partners Funds Management as a panelist on the APAC Climate Risk Series webinar earlier this week, and a huge thank you thank our wonderful Head of Stewardship Mayleah House for her great presentation. May was able to discuss how Ethical Partners Funds Management is continually working towards decarbonising our portfolio to reach our 50% reduction in Scope 1 and 2 carbon emissions by 2030 interim reduction targets for our Ethical Partners Australian Share Fund, as well as other ambitious interim and short term targets for mandate clients. May was also able to highlight our new Credible Transition Plan, linked below, which clearly outlines how we at Ethical Partners Funds Management assess the credibility of the transition plans of our portfolio companies, as well as what best practice indicators guide our engagements and wider advocacy regarding the urgent need for more transparency, credibility and ambition in ASX companies transition plans. Thanks again to Mayleah House and to Kar Mei Tang (PhD) and the Principles for Responsible Investment for the chance to be involved in such a critical conversation. https://lnkd.in/gejDEhT2

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Ethical Partners Funds Management is very pleased to share our new Credible Transition Plan Framework. We note that whilst there has been a welcome increase in carbon emission reduction targets and commitments across the ASX over the past few years, there is wide variation in the detail included in these plans, as well as the credibility of the transition planning by ASX listed companies. In fact, in our own internal and detailed assessments of the credibility of ASX listed companies’ transition plans through Ethical Partners proprietary in-house ESG analysis and investment process, not one company assessed met all key elements of what Ethical Partners deems credible for a transition plan.  These findings are backed up by similar research from the CDP, who have reported that only 0.4% of organisations reporting through them disclose a company transition plans that sufficiently meets their own key indicators of a credible transition plan. This means, that at present, the level of detail in ASX listed companies’ engagement plans is inadequate for investors to fully understand and analyse the alignment between the companies’ statements and their actions, as well as the progress which companies are making towards their targets, and how they are fully understanding and using their levers available, seizing their opportunities and addressing their impacts. This then markedly limits the ability of the market to allocate capital to those leading in their decarbonisation strategies, avoid investment in those companies misaligned with a credible transition plan, and ensure the rapid and genuine decarbonisation of their portfolios. Further, the increasing focus on greenwashing places means that it is incumbent on companies and investors alike to be able to robustly show alignment between the company’s transition plans, their real-world actions towards decarbonisation, and their stated carbon reduction targets and climate statements. As such, Ethical Partners Funds Management has committed to developing and publicly disclosing our clear, robust framework for what we consider a credible transition plan, which includes the 16 indicators/disclosures we consider critical to our ability to truly understand the credibility of a companies transition plan. This framework serves to provide transparency for both our portfolio companies, as well as our clients, on what our analysis and direct company engagement are focusing on when we both assess for, and advocate for improvement in the transition plan disclosures from all portfolio companies. These areas of focus are also the areas we are advocating for greater disclosure and transparency on in our wider policy and legislative advocacy.   Ethical Partners furthermore hopes that this framework will encourage wider market conversation and attention to the lack of disclosure and credibility in transition plans across the ASX as a whole.

Ethical Partners Funds Management is extremely proud to announce the formal endorsement of our inaugural Reflect Reconciliation Action Plan.   This RAP formally recognises our recognition of Aboriginal and Torres Strait Islander peoples as the Traditional Owners and Custodians of this land. At Ethical Partners, we firmly believe that as the first stewards of Australia, Aboriginal and Torres Strait Islander peoples and cultures should hold a special and celebrated place in the institutions and fabric of modern Australian society. We furthermore firmly believe that there is an urgent need for substantive social, political and structural reform, led by First Nations voices and wisdom, and consistent with the principles of the UN Declaration on the Rights of Indigenous Peoples and the Uluru Statement from the Heart. We further acknowledge that investors, and the finance sector as a whole, holds a fundamental responsibility to play an active and essential role in supporting the rights of First Nations populations. We also acknowledge that investors hold a privileged position to leverage their shareholder voice, allocation of capital and access to decision makers, and therefore believe that our advocacy on First Nations Peoples rights must be, and is, a key stewardship consideration for Ethical Partners. Ethical Partners’ first Reflect Reconciliation Action Plan notes many of our previous and current partnerships, company engagements, advocacy and current activities as committed ESG investors to address Indigenous Rights in our investment activities, stewardship, or in our philanthropic endeavours. The formation of this RAP is, however, a significant and important step forward in demonstrating and formalising our commitment to addressing Aboriginal and Torres Strait Islander peoples’ rights in our investments, engagements, and operations. We are also deeply cognisant of the need to approach our RAP in a meaningful way, which is something that we regularly engage with ASX listed companies to ensure that their RAP’s are embedded into their strategy, create meaningful change across their operations, value chains and areas of influence, incorporate the voices of Aboriginal and Torres Strait Islander peoples into the process and leverage the organisations connections and ability to impact wider change. We also remain cognisant, and regularly communicate with our portfolio companies, that a RAP must be genuinely embedded in the organisations culture, be overseen by an actively engaged board, be incorporated into all cultural safety and diversity initiatives. Ethical Partners is deeply committed to doing the same within our own RAP process. Ethical Partners Funds Management is also very conscious of the need to bring external First Nations advisory expertise to our RAP Working Group and are actively working on building these connections and links to First Nations leaders over the coming year.

The latest exciting edition of the Good Investing Podcast

Ethical Partners Funds Management Investment Director - Nathan Parkin featured in the AFR this week sharing his views on the upcoming reporting season, positioning and some high conviction stock picks. Nathan Parkin Andrew Wilson Matt Nacard Robyn Parkin Mayleah House Marc Page https://lnkd.in/g2BQRav7