ESG has surged in popularity recently with nearly all large organisations now promoting some kind of ethical product or business practice in order to attract ESG conscious consumers and investors.
While ESG is new to many, the concept is something the Capital International Group has been familiar with for a long time. In fact, Fusion ESG, the Group’s ethical investment portfolio, was established more than a decade ago. Throughout its 25-year history, the company has consistently upheld high ethical standards. With over $5 billion in client assets, the Group acts as a trusted partner to its clients and has invested heavily in maintaining a strong organisational culture, giving back to its people and communities.
Building on the business’ existing initiatives, Capital’s ESG approach going forward will be characterised by authenticity and a genuine desire to do the right thing. Simply coating the business with a temporary ESG lacquer that will wash away in a few years is not something the Group would ever consider. Instead, Capital will be making real, practical and sustainable changes, a process which began earlier this year with the formation of the ‘ESG Forum’ which is headed up by Group Chairman Anthony Long:
"We wanted to embed years of informal initiatives into a much more structured approach. We formed a new ESG Forum that draws its membership from staff across all of the Group’s offices and reports directly to our Group Board. We also developed a new ESG mission and strategy statement, which now touches all areas of the business and sets a new tone that will define our cultural development in the years ahead.”
First on the Forum’s agenda was to set out goals for the coming five years. These are built around five key themes and are framed around the ambitious target of the Group becoming carbon neutral by the end of 2025.
“It’s a big, hairy, audacious goal, and it won’t come easily, but every decision that we take from now on is framed around meeting this target,” said Anthony.
One step the Group has already taken towards achieving this goal is the introduction of an electric vehicle scheme for staff. There are currently only around 400 electric vehicles on the Isle of Man and with over 160 staff based across the company’s Douglas and Castletown offices, there is potential to have a real impact in reducing the Island’s emissions.
Another step has been to launch a major initiative to plant indigenous trees on the Island and in Africa, and to link this with local community engagement and educational awareness.
Anthony commented “Both the electric vehicle scheme and the tree planting are really exciting initiatives which, on the one hand will dramatically reduce our commuting emissions over time, and on the other I expect will enable us to plant around 30,000 new trees over the next five years."
In addition to the net-zero objective, work is progressing on the creation of a procurement score card which will be used to ensure that suppliers of the Group also uphold high ethical standards.
The ESG Forum draws from various departments across the business; those enthusiastic about creating a better world are encouraged to join the group. In addition to this voluntary committee, an ESG department has also been created which spans the Group’s Investment Management and Business Development teams.
Tasked with managing and growing the Group’s ethical investment offering are Business Development Manager Greg Easton and Investment Manager James Fitzpatrick. Greg has been active in the ESG space for over a decade and even ran his own sustainable ecological assets fund between 2010 and 2013.
James meanwhile is responsible for ensuring that the Group’s ESG portfolios remain truly ESG through a stock selection style that combines both exclusion and inclusion strategies.
Greg said: "We understand that investors are increasingly seeking an ESG manager that goes beyond negative screening and ESG scoring to provide a transparent and purposeful investment strategy. We also recognise that we are in a position to lead the Isle of Man investment industry in decarbonising our discretionary portfolios and are the first on the island to appoint a dedicated ESG team. To demonstrate our commitment to responsible investing, we have also recently become a signatory of the UN PRI, a United Nations-backed global network of investors uniting to transform the investment landscape according to six aspirational ESG principles.”
James said: "Capital International have had an ethical investment solution for over 10 years. In 2020, we decided to relaunch this solution as Fusion ESG, an actively managed portfolio focused on positive impact strategies and resource sustainability. Fusion ESG has a 100% ESG asset allocation, investing across four key themes of sustainable agriculture, clean technology, water management and healthy living."
Joining the company earlier this year, Capital’s ESG team was strengthened further with the arrival of Business Development Consultant Kim Quirk. Kim’s role within the team is to grow Capital’s ESG client base and manage existing relationships. With vast experience of working with private clients in the banking sector, Kim will now be putting her relationship skills to use once more in an area she is passionate about.
Kim said: “Many companies claim to be focused on ESG, both on a company level and through their product offering, but few deliver on both counts. At Capital we have literally put our money where our mouth is. Through our ‘Conscious Capital’ pledge, we are committed to becoming carbon neutral by the end of 2025. This pledge comes right from the top of our organisation and has the backing of our staff in both the Isle of Man and South Africa. ESG is not just something we invest in, it’s in everything we do.”
Unlike Kim, the fourth member of the ESG team, Paige Orlik, is not new to Capital. Her graduate internship with the company began in 2019 shortly after she completed her Finance degree at the University of Cape Town and gained the CFA Level 1 qualification. Having recently moved over from Cape Town to the Isle of Man, Paige now joins our ESG team in a role that will see her time divided between Business Development and Investment Management.
Paige commented on her appointment: “I couldn’t think of a better time in history to be a young, passionate individual starting out in the investment industry. The world, and particularly the economy and financial markets, are changing as climate, biodiversity, and other ESG issues come to light. With my passion for people and the environment, alongside my financial background, I aim to empower our clients to better understand the relationship between these issues, risk, and long-term financial performance. In addition, I aim to shed more light on the importance of ESG based investment decisions in ensuring a sustainable future.”
A sense of duty to protect the planet and better society has always come naturally to the Group. Since its inception, the business has been guided by its core value of integrity combined with an intrinsic desire to do the right thing. The Group’s drive to make a lasting and positive impact has now however been formalised and it looks forward to a future of building on its current initiatives, growing its ESG department and making a lasting difference in the local community as well as further afield.
Disclaimer: The views, thoughts and opinions expressed within this article are those of the author, and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.