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Harbour Asset Management has produced its first-ever annual sustainability report in response to what its managing director Andrew Bascand describes as increasing investor demand “that their fund managers pay attention to non-financial risks and focus on ESG aspects”.
Monday, July 25th 2022, 10:22AM
by Jenni McManus
“Our goal is to publish and report openly on progress each year as we develop our approach to investing sustainably,” Bascand says. “Both our local fixed income and equities investment processes consider ESG matters, alongside the case for generating investment returns.”
As its main tool for monitoring and assessing ESG concerns, Harbour uses a corporate behaviour survey tool, developed by the firm in 2009. Among other issues, the tool monitors responses to climate change, diversity, inequality and wellness.
It’s understood Harbour is only the second asset manager to publish a sustainability report. Last year, Pathfinder produced its first sustainability report, describing it as “transparent and meaningful disclosures” that would explain how the business is tracking towards its sustainability and return goals. But, as CEO John Berry puts it, Pathfinder had been “investing ethically since before it was cool”.
Bascand could make similar claims. As he points out in the introduction to the report, Harbour was an early signatory to the UN Principles of Responsible Investing in 2010 and each year the business has been adjusting its processes and activities as it learns more.
“There is no end in sight to developing meaningful insight on sustainable investing,” Bascand says. He also notes that good governance often correlates with responsible investing.
Harbour’s sustainability report describes how makes its investment decisions, the principles behind its decision-making, its voting principles and how Harbour, as a business, is walking the talk in its engagement with staff and the wider community through its Footprint Committee.
Underpinning it all is what’s called “impact investing”: investments made with the intention of generating positive, measurable social and/or environmental impacts alongside a financial return.
Over the past year, Harbour has launched two new sustainable funds: a Sustainable NZ Shares Fund and a Sustainable Impact Fund. These funds not only incorporate the responsible investing practices Harbour has built over the past decade “but also moves forward with the purpose of allocating capital to deliver strong investment returns and align our investment with the UN SDGs [sustainable development goals]”, the report says.
Harbour Sustainable Impact Fund invests approximately 20% in domestic impact equities and 40% in domestic fixed interest, managed by Harbour. The fund is designed to have a lower carbon footprint than the market benchmark and Harbour offsets any carbon contained in the fund by investing in project that actively prevent carbon release.
The Sustainable Shares Fund is designed to track the S&P/NZX50 Portfolio Index, excluding companies that are exposed to large carbon emitters, alcohol, gambling, munitions, adult entertainment, nuclear armaments, firearms, tobacco and recreational cannabis, child labour and companies with human and animal rights violations.
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