A successful year for Socially Responsible Investment
19 December, 2001
Since joining Morley Fund Management (“Morley”) in January 2001, Morley’s 8 strong SRI team of fund managers and analysts, has made a considerable impact on the market. The team employs a philosophy of sustainable development, focusing on companies that make a direct link between sustainable development and long-term returns.
Here are some highlights from 2001:
Corporate Governance In April Morley launched its revised voting policy which requires UK companies within the FTSE 100 to publish environmental reports. Morley believes this was the first initiative of its type in the UK fund management industry.
Products Morley’s SRI Pooled Fund range, launched in July 2001 comprises three funds: Managed, UK Equity and Global Equity. The UK Equity pooled SRI fund has already been added to two multi-manager platforms, and the SRI Managed fund to one. Of Morley's six SRI funds available to institutional and retail investors, two have been given an AA rating by Standard & Poors and two have been given an A rating.
Engagement In a number of high profile cases this year, positive engagement has helped companies to respond to risk in time to avert irreparable damage to corporate reputation and share price:
- Chocolate - In April, following the sighting of a ship carrying slave children off the coast of West Africa, the issue of enforced labour in the production of chocolate lead to international pressure on major chocolate manufacturers. Following engagement from shareholders (including Morley) major chocolate manufacturers and industry bodies agreed in November 2001 to take responsibility for the supply chain conditions. Experts believe this is first time an agricultural industry has taken responsibility for its product from harvesting to market.
- Pharmaceuticals - In May the issue of access to affordable medicines in developing countries, came to a head when 42 pharmaceutical companies took the South African government, to court over breach of drug patents. Pressure from campaigning organisations and positive engagement from Morley and others in the SRI community contributed to the companies' decision to settle the case out of court and to agree to offer essential AIDS drugs to South Africa at affordable prices.
- Balfour Beatty - The Ilisu dam project threatens the livelihood and land of large numbers of Kurdish people and has been linked to ethnic cleansing. In August shareholder pressure and positive SRI engagement from Morley featured significantly in Balfour Beatty’s decision to pull out of the project thereby saving the company time and money and preserving its reputation.
- Burma - In December Morley Fund Management joined forces with a group of financial institutions to launch 'Business involvement in Myanmar (Burma) - A Statement from Institutional Investors.' The statement outlines the concerns raised by the presence of a military dictatorship in Burma and highlights the risks to shareholders in investing in companies that have interests in the country. Collectively, the group represents almost Ł400 billion in funds under management. This unprecedented initiative has been launched to encourage companies to establish effective procedures for managing risk, as international pressure on companies doing business in Burma intensifies.
Events over 2001 have reinforced Morley's belief that commitment to sustainable development is increasingly being recognised as a precursor to long term growth and enhanced returns.
-ends-
For further information please contact:
Morley Fund Management
Paul Moody
Tel: 020 7809 6197
Penrose Financial
Gay Collins
Tel: 020 7786 4882 gayc@penrose.co.uk
Caroline Deutsch
Tel: 020 7786 4871 carolined@penrose.co.uk
Notes to Editors
- S&P ratings as at 18/12/01:
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Norwich Sustainable Future Managed Fund: AA awarded May 2001 Norwich Sustainable Future UK Growth Fund: AA awarded May 2001 Norwich Sustainable Future Corporate Bond Fund: A awarded July 2001 Norwich Sustainable Future Global Growth Fund: A awarded July 2001 - Led by Clare Brook, the Socially responsible investment team is one of the largest, the most experienced in the UK.
Clare and her colleagues have been working together for nearly a decade. In this time, they have grown in reputation and status. Team members are frequently asked for advice by companies, non-Governmental Organisations (NGOs) and government departments. Recently the team was involved with policy making for the new legislation that requires pension fund trustees to disclose their stance on social and environmental issues.
The team has a global perspective and a global reputation, having worked with investment consultants from around the world. Its research efforts focus on the world-wide activities of the companies in which it invests. Members are regularly asked to speak at overseas conferences on SRI issues.
- Morley Fund Management (‘Morley’) is an independently managed, London based, asset management business with over Ł100 billion under management. It has investment management operations in London, Tokyo and Singapore and an associate office in Boston*.
- Morley is a wholly owned subsidiary of the CGNU Group and manages both institutional and retail funds under the Morley brand. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand.
- CGU plc and Norwich Union plc merged on 30 May 2000 to create CGNU plc, the UK’s largest insurance group and one of the top-five insurers in Europe with substantial positions in other markets around the world, making it the world’s sixth largest insurer based on gross worldwide premiums.
*Norwich Union Investment Management, a CGNU Group company
Morley Fund Management is a business name of Morley Fund Management Limited, registered no. 1151805, 1 Poultry, London EC2R 8EJ and Norwich Union Investment Management Limited, registered no. 2152949, 8 Surrey Street, Norwich NR1 3NG.
Both are CGNU Group companies and are regulated by the Financial Services Authority
Past performance is not a guide to the future.
