Engage Autumn 2025

This presents opportunities for companies who can help corporate clients measure, manage and report their environmental footprint, particularly when it comes to issues such as carbon, deforestation and water. We engaged with two technology companies held across our portfolios for which we have identified sustainability solutions as a potentially financially material long-term growth driver.

An eye on supply
Companies may face nature-related risks that can pose a material threat to their bottom line. For instance, companies might depend on natural resources and the ecosystem services provided by nature, such as water, clean air and pollination which are likely to see an increase in price over time due to regulation and resource scarcity. Having identified nature-related risks as potentially financially material for a consumer goods company held across portfolios, we engaged to understand how it is managing these risks.

Getting (carbon) physical
Physical risks linked to climate change may pose financially material risks for companies either directly or indirectly, depending on their operational setup. Companies may face direct damage to owned physical assets, or have to grapple with indirect supply chain and logistical disruption. We sought to analyse which companies may be exposed to physical climate risk, and identify the potentially material opportunities that may exist for other companies offering commercial solutions.

Climate targets in 2024
We believe accurate measurement and transparent reporting of carbon emissions is fundamental in enabling companies and investors to understand the size and sources of companies’ emissions, and therefore their potential financially material exposure to climate transition risks, such as carbon taxes. We engaged with two of our companies we had previously engaged with on the subject to see how they were progressing.”

^{Risk Considerations
There is no assurance that a portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market value of securities owned by the portfolio will decline. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this strategy. Please be aware that this strategy may be subject to certain additional risks. Changes in the worldwide economy, consumer spending, competition, demographics and consumer preferences, government regulation and economic conditions may adversely affect global franchise companies and may negatively impact the strategy to a greater extent than if the strategy’s assets were invested in a wider variety of companies. In general, equity securities’ values also fluctuate in response to activities specific to a company. Investments in foreign markets entail special risks such as currency, political, economic, and market risks. Stocks of small- and mid-capitalisation companies carry special risks, such as limited product lines, markets and financial resources, and greater market volatility than securities of larger, more established companies. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed markets. Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks. Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). Non-diversified portfolios often invest in a more limited number of issuers. As such, changes in the financial condition or market value of a single issuer may cause greater volatility. ESG strategies that incorporate impact investing and/or Environmental, Social and Governance (ESG) factors could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. As a result, there is no assurance ESG strategies could result in more favorable investment performance.}