Responsible Investment Policy
KBI Global Investors has been a pioneer in Natural resource equity investing since 2000, investing in companies providing solutions to sustainability challenges related to the provision of food, energy, water and the mitigation and adaptation to the impacts of climate change. Our Global Equity Strategies with their focus on companies with the ability to pay sustainable dividends is grounded in the changing demographics and macro environment that are driving an increase in the demand for investment income and the implications of these trends for equity investors. The strategy focuses on companies with a sustained ability to return value to shareowners.
We incorporate ESG factors in our current strategies where we believe they are material to investment decisions for the particular strategy. Environmental factors are foundational for the Natural Resource Strategies as are the Social factors of an increasing global population and changing world demographics. Governance is a consideration in evaluation of company management and management structures. Our Global Equity Strategies are grounded in the consideration of the Social factor of the demographic of an ageing population’s increasing demand for income. It has also been our experience that a focus on companies with a sustained ability to pay dividends results in a portfolio of companies that sustainably deploys capital and has a higher Governance profile. In our view such a profile ultimately is to long term benefit of shareholders.
Environmental and Social factors are a fundamental underpinning of our Natura Resource Strategies, grounding the investment premise for our Water, Energy Solutions, Agribusiness and Global Resources Strategy (GRS). Our team applies their expertise in evaluating the investment implications of environmental challenges, evolving world demographics, opportunities in environmental solutions and strong knowledge of emerging environmental technologies and then integrating these assessments into the overall fundamental assessment of companies. Corporate governance is reviewed as part of our fundamental analysis of a company. Where governance risks are identified, they can be the basis for conversations with management and/or an adjustment to the risk premium we uses in our valuation of the company.
While ESG factors are currently not explicitly a part of the Global Equity Strategies investment process, we believe that there is a connection between dividend payments and corporate governance standards. Identifying companies with the ability to pay sustainable dividends, we believe, is a unique way to identify better governed companies, particularly in emerging markets. Firm level corporate governance provisions matter more in countries with weaker legal environments or political instability and better governance is typically associated with higher dividend payouts. While equity investors can receive returns through capital gains or dividends, agency theory indicates that shareholders may prefer dividends, particularly when they fear expropriation by insiders; have concerns over the motivations of management; or there is a weak regulatory environment.
All of our directly managed portfolios do not invest in companies producing land mines or cluster bombs.
On a separate account basis, SRI screening is available for clients who wish to avoid stocks based on ethical criteria.
Kleinwort Benson Investors policy is to vote all securities that we are entitled to vote on behalf of our client portfolios. A Proxy Voting Policy is in place and is reviewed once a year. Routine matters are facilitated by an external provider, Institutional Shareholder Services, while non routine matters including contested elections, take-over proposals, management defence strategies, contentious management compensation issues, shareholders rights, political/social issues etc. are referred to Kleinwort Benson Investors Proxy Voting Committee which is chaired by our CIO, and includes a member of each equity team and our Head of Compliance.
For our Natural Resource Strategies, meetings with company management give our Portfolio Managers the opportunity to raise any issues that they believe may be material to shareowner value. If our analysis detects a serious governance concern, we can raise the issue with company management at meetings in person or via telephone and after further assessing the situation make an appropriate decision in the best interest of our clients.
As a specialist boutique asset manager with focused resources, we endeavour to leverage relationships to engage in collective engagement when appropriate. To that end we are members or signatories to the following initiatives:
The United Nations Principles for Responsible Investment (UNPRI)
The Carbon Disclosure Project
CDP Water Initiative
The Global Impact Investing Network (GIIN)
The UK Stewardship Code
Conflicts of Interest
Kleinwort Benson Investors always endeavours to act in the best interests of its clients. The firm has a robust Conflicts of Interests policy in place which is made available to all staff. Where conflicts do arise they are always reviewed bearing the client's best interests in mind.
RI Policy Governance
Kleinwort Benson Investors’ ESG Group is responsible for reviewing the Responsible Investment Policy and recommending it for final approval to the Kleinwort Benson Investors Executive Committee. The ESG Group will review the policy annually and recommend any necessary changes.