Countryside Matters 2014 - page 32-33

Countryside
Matters
30
Countryside
Matters
31
INVESTING IN THE FUTURE
INVESTING IN THE FUTURE
JohnVarley
EstatesDirector
ClintonDevonEstates,
likemanybusinesses,
managesanumber
ofpension fundsand
other investment
vehicleswhichuseglobal
funds.Westrivetogiveagood
returntoourcurrentand future
pensionerswhileensuringthat
our investmentsareresponsible.
Wereferto itassociallyand
environmentallyresponsible
investing.
Ratherthanputtingmoney
into fundsand just leaving itto
grow, theEstatehasaPensions
and InvestmentCommittee
whichmeetsregularly.Wereview
emerging investmentthemes
andensurethatthecompanies in
whichwe investfitwiththeethos
oftheEstate’sprinciplesagainst
abackdropofgoodperformance.
Weare less interested inwhat
happenedonthestockmarket last
monthandmuchmore interested in
takingaholisticand long-termview.
Thesameapproach istakenbythe
EnvironmentAgencyPensionFund
Committee,whichIhavetheprivilege
ofchairing.Thefund isworthover
£2.2billionand isoneofthefew
publicsectorpensionfundswhich
isover90%fundedtomeet its
longterm liabilities. It isrecognised
globallyasa leadingexampleof
responsible investment,through
takingaccountofEnvironmental,
SocialandCorporateGovernance
risks-alsoknownasESG,–thethree
mainareaswhichcandemonstrate
thequalityandsustainabilityof
companyorbusinesssector,making
amoreattractive investment
opportunity. Theseelements
influencetheapproachtaken
byforward looking investors in
managingtheirportfolios.
Moretraditional investorshave
feltthattakinganESGapproach
leadstoa lowerreturnbutskeptics
onlyhaveto lookattheperformance
ESTATE
ANGLE
Doing the right thing
eatingout.Andwhenyougotoarestaurant, theamountyoupay forthe food
isarelativelysmallpartofthebill.Theoveralleconomicvalueand jobscreated
fromthemealaremuchgreater. Understandingthesetrends isreallykeytoa
long-termapproachto investing.SarasinandPartnerscomesat itfrom looking
at theunderlying trendsover the long term –wecall it thematic investment –
and thechange in the foodchain isoneof thestronggrowth themeswesee
intheworld.
As I mentioned earlier, I think one has to be slightly careful about branding
anythingasa responsible investment. The fact thatweare taking these things
into account is a good thing, but it is not wildly different fromwhat all fund
managersshouldbedoinganyway.Therehaveundoubtedlybeen irresponsible
investments in thepast,where itwasall justabout theprofitmotive, but this is
counterproductive inthe longterm.
Foran investment todeliversustainably, youneed to thinkabouthow issues in
thewiderworld; for instanceresourcemis-managementorclimatechange,will
affectyour investment.Youcouldcall that idealistic investment, but in fact it is
justprudent,responsible investmentmanagement,havingabroaderawareness
ofall the issuesratherthanfocussingpurelyonthefinancialbottom line.
resultsoftheEnvironmentAgency
PensionFund(EAPF)overthe
past10yearstobeconvincedthat
the“responsible”approachreally
doeswork. It iscurrentlyoneofthe
topperforming localgovernment
andpublicsectorpensionfunds
and,becauseof itsreputation
and influence, ithasbeenableto
encouragean increasingnumber
offundmanagersto invest in
companiesandboardsthatnotonly
“dotherightthing”,butalsoadopt
bestpracticemanagementsuchas
robustsupplychainmanagement
whichprotectsfinancialreturns.
OnecouldsaythattheEAPF is
influencingbestenvironmental
practicebeyondthebordersof
England, ineffecttheEnvironment
Agency’s“GlobalDivision”.
Ourstaunchbelief inthe
“responsibleapproach”extends
toallareasofourwork,activity,
projectsandstrategyatClinton
DevonEstates. Itunderpinsour
organicfarmingandsustainable
forestrypractices,nature
conservationandrenewableenergy
projectsandournewhomesand
businessdevelopmentswhichare
carefullyplannedtoallowour local
communitiestosurviveandthrive.
ESGprinciplesarefirmly
embedded intoourethos
asabusiness,evendownto
ouremployeerecruitment,
developmentandperformance
managementwhich is judged
overthe long-term, for future
generations,not juston last
week’sresults.
JohnVarley isaBoardMember
oftheEnvironmentAgencyand
ChairmanoftheEnvironment
AgencyPensionFund.He isalso
ChairmanoftheRuralCommitteeof
theEstatesBusinessGroup.
0
500
1000
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0
200
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1000
2008
2009
2010
2011
2012 2013
EnvironmentAgencyPensionFund (EAPF)ActiveFund
FundValue(£’000) EAPFcarbon(tCO
2
e)
LefthandaxisshowsthevalueoftheActivefund in£’000
RighthandaxisshowsthetonsofC0
2
emissions
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