Martin Currie Publishes Annual Stewardship Report
Effective stewardship of capital lies at the heart of the firm’s client proposition
EDINBURGH, Scotland, April 11, 2018 /3BL Media/ - Martin Currie, a Legg Mason, Inc. active equity specialist, today published its third annual Stewardship Report, outlining Environmental, Social and Governance (ESG) practices across the globe. Effective stewardship of capital lies at the heart of the firm’s client proposition. Martin Currie takes a holistic look of the publicly traded companies the firm invests in, evaluating all material information whether quantitative or qualitative.
Link to the report: https://www.martincurrie.com/corporate/news/stewardship-annual-report-2018
“Observers of ESG and sustainability issues may have found 2017 somewhat nerve wracking, in no small measure due to the potential fallout from political disruption,” said David Sheasby, Head of Stewardship and ESG at Martin Currie. “But if anyone thought the tide could be turned through ESG investing, they are likely to have been positively surprised. It’s been a busy year for Martin Currie on private and collective engagements. We saw the commencement of an initiative on cybersecurity in the financial, healthcare and retail sectors and signed up a new joint project on corporate tax responsibility.”
“We find it somewhat curious that there are still skeptics when it comes to the merits of integrating ESG in the investment process,” said John Pickard, Head of Investment at Martin Currie. “We believe stewardship is about thinking very broadly about what drives company performance, and using the tools at our disposal for that purpose. ESG would not be material to a company’s performance unless stakeholders differentiated between good and bad practice.”
Tenant to Active Ownership: Engagement
As an active manager of long-term concentrated portfolios, we prioritize stewardship. A key element of acting as a positive corporate steward is engagement. Martin Currie has privately engaged with over 250 publicly traded companies on ESG practices.
Below are a few concrete examples of Martin Currie’s stewardship, which can also be found in the report:
Environment: A large shareholder of a U.S. oil and gas company put forth a proposal that the Board of the company issue a report outlining climate change policies. In agreement with this shareholder, Martin Currie met with the oil and gas company to outline why this proposal would be important to shareholders. Martin Currie voted in favor of the proposal, it received a majority support from investors and since the voting, the company published a climate risk report.
Social: After reviewing a report from the China Labor Watch (CLW), it was brought to Martin Currie’s attention that this Taiwan-based hardware company had poor working conditions for its employees. Martin Currie met with the company’s Chief Financial Officer and Director of Finance to learn of the specific measures the company is taking to improve conditions. The company has a clearer approach and improved overall labor conditions, resulting in a lower staff turnover rate directly impacting the bottom line.
Governance: Martin Currie, a holder of a large UK financials company, engaged with the publicly traded company about a newly appointed Board of Director. This director, already holding two additional external roles, did not seem to have capacity to dedicate sufficient time to the company’s very large and complex business. After expressing concerns to the financials company, the director reviewed his/her position with the Board and decided to resign.
2018 Outlook: While there are many ESG issues on Martin Currie’s radar screens, the report notes four that are bound to flash with a steady light due to their materiality:
- Pressure to improve Carbon disclosure
- Heightened focus on Cybersecurity
- Increasing integration of Sustainable development goals
- Clearer path towards Sustainable financial system
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About Martin Currie
Martin Currie is an active equity specialist, crafting high-conviction portfolios for client-focused solutions. Investment excellence is at the heart of its business. Central to this philosophy is a stock-driven approach, based on in-depth fundamental research, active ownership of companies and skilled portfolio construction. As an affiliate of Legg Mason, it also has the backing of one of the world’s largest asset management firms.
About Legg Mason
Guided by a mission of Investing to Improve Lives,TM Legg Mason helps investors globally achieve better financial outcomes by expanding choice across investment strategies, vehicles and investor access through independent investment managers with diverse expertise in equity, fixed income, alternative and liquidity investments. Legg Mason’s assets under management are $767 billion as of December 31, 2017. To learn more, visit our web site, our newsroom, or follow us on LinkedIn, Twitter, or Facebook.
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