By: Mike Adsetts, global chief investment officer

Responsible investment practices are embedded into our investment thinking and management. Integrating environmental, social and governance (ESG) issues into investment decision-making and applying stewardship practices are two key parts of our role as a responsible investor, also known as Responsible Investing (RI). The two strategies are complementary to each other, as we integrate these insights to ensure the sustainability of our clients’ capital.

In our fifth edition of the annual Momentum Investments Stewardship Report, which was published at the start of October, we focus and track progress on our stewardship and sustainability journey.

Our responsible investing approach includes the following:

• Advocating – We have committed to five Sustainable Development Goals (SDG) for a focused approach and engage with our investees accordingly.
• Reporting on progress – We want to be demonstrable in our progress and show our investors that we take our duty to act in their best interests to heart.
• Seeking disclosure – Through our engagement efforts with our investees, we advocate the importance of transparency which result in better quality information and sustainable outcomes for our clients.
• Integrating ESG – We have a responsible investment committee that serves as an oversight function across the various investment capabilities within the team. We integrate ESG across all our discretionary assets under management.
• Being active owners – We use our influence to help maintain a well-governed corporate South Africa.
• By committing to best practice – We keep to and observe all rules and regulations which seek to uphold the Principles of Responsible Investment.

In this year’s publication, we give examples of the progress that we have made over a broad range of sustainability-related themes and practices. Industry participation is a key focus area for us, as this ultimately sets and contributes to a dynamic and receptive environment within which broader sustainability initiatives can be driven at a societal level. One of the successes in this area is that Momentum Global Investment Management, our UK-based team, has been approved as a signatory to the UK Stewardship Code. This has been a rigorous process during which we have needed to demonstrate deep commitment and evidence of our sustainability and responsible investing practices.

Proxy voting and engagement activities continue to be a cornerstone of our sustainability approach and in this year’s report, we provide both high-level feedback on the number and types of issues that we have voted on as well as including case studies on how we have engaged and interacted with Sasol, Exxaro and Investec.

As a sustainability-focused business, we do not believe in a piecemeal approach to integrating sustainability and responsible investment practices in all that we do. As such we believe that integration of ESG practices is the most appropriate way to ensure that our portfolios authentically address the challenges and opportunities of ESG. Our Stewardship Report illustrates how we have practically incorporated ESG into some of our infrastructure and global portfolios.

Within the broader ambit of ESG, the challenges presented by climate change are becoming more evident and pressing. Addressing the risks of climate change responsibly and practically, considering the complexities of the issue, is one of the key challenges that we all face together. We have made good progress on this front and showcase our decarbonisation strategy and the carbon-related metrics of portfolios.

Our Stewardship Report concludes with a description of some of our business sustainability practices. Stewardship is not just a portfolio prerogative but also infuses how we conduct ourselves as a business that truly believes in sustainability.

To find out more about our responsible investing journey and to read our Stewardship Report, visit our website at momentum.co.za.