The board of the £3.2bn Alliance Trust has appointed Hermes Equity Ownership Services to help assess the sustainability credentials of the trust’s investments.
The trust's board has spent the past three years selling off what it describes as "non core" assets such as its platform business and a slug of mineral rights it owned.
This has left a global equity portfolio, run by Willis Towers Watson on a multi-manager basis. Willis Towers Watson has selected nine fund management groups to each manage a portion of the money.
But in addition to Willis Tower Watson questioning those fund managers about their environmental, social and governance approach, the trust has also appointed Hermes to monitor this.
Mark Atkinson, head of marketing for the trust said: “We know that this is a big issue for investors, and we decided to work with Hermes EOS. Their role is to speak to company management about the ESG issues, and feed back to us. They work for asset managers that have about £55bn of assets, and so the companies listen to them on these issues, in a way where they might not listen to us.
"This is a second pair of eyes, a check and balance to ensure we are considering those issues. I would emphasis we are not a specialist ESG fund, those funds exist and there is a place for them, but we are aware of the issues, and the potential for those issues to impact on returns."
The trust has returned 24 per cent over the past year, compared with 18 per cent for the average trust in the AIC Global sector in the same time period.
david.thorpe@ft.com
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