Responsible Investing

Investing with us helps us support businesses that are leading the way for a healthy planet

 

At M&G Investments, we've been investing money for individual and institutional clients for 90 years and our principles of investing for the long-term, responsible stewardship of our assets and active fund management have been the foundation of our approach throughout.

We consider it our responsibility to support our customers’ investment and savings goals by aiming to generate sustainable returns over the long term. We also recognise that, increasingly, customers are looking to align their investments with their environmental and social values and have a range of funds that can help meet this need.

The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

 

Our approach to responsible investing shares a number of common principles across our actively managed funds.


ESG integration

We take ESG factors into consideration across our asset classes: whether investing in equities, bonds, real estate or infrastructure. Our proprietary methodology and tools use ESG data, analysis and interactions to give us an in-depth understanding of how ESG factors are likely to affect the expected risk and return of a potential investment opportunity.

At a portfolio level, our investment decisions include considerations of all material factors, including ESG factors.

 

 

 

Inclusive thinking

We believe that the consideration of ESG factors is a much more complex and nuanced process than simply screening out companies our industries perceived to be unsavoury- the world is rarely black and white, and our research and engagement with companies is carried out on a case-by-case basis. Because of this, we think that the positive effects of ESG integration are one of the elements that make active investing so powerful.

 

 

 

Engagement and voting

We undertake constructive engagement with management of companies and organisations to improve practice on ESG issues, change sustainability outcomes or improve public disclosure. We also regularly conduct company meetings, which include discussions with management to better understand the ESG strengths and weaknesses of the companies in which we invest. 

Our equity and fixed income analysts and portfolio managers will question and challenge management on even difficult topics, feeding the outcomes back into our view of the investment opportunity.
 
We also consider active and informed voting as an integral part of our responsibility to our clients. By exercising our votes, we seek both to add value and protect our interests as shareholders.

Our voting in action  Our engagement in action

 

 

Consistent structure; flexible implementation

While we share a common set of principles, resources and infrastructure across M&G, we do not impose ‘top down’ house views and we do not manage by consensus. This is equally true for the ESG strategies fund managers adopt. Indeed, individual investment teams have the autonomy, flexibility and experience to design and implement investment processes in a manner they consider most appropriate to their investment strategy and their customers.

While overall ESG has been integrated across actively managed portfolios, we have also been actively expanding our range of investment strategies that take a more explicit approach to ESG integration – including a minimum level of exclusions – that are focused on sustainability or specifically target positive societal impacts. Please see M&G’s product framework below.

M&G Investments responsible investing reports, policies and principles

Our ESG product framework

​We have developed a clear and transparent product framework which is designed to help you understand how ESG considerations are applied to our products.

​Our equity, fixed income, property and multi-asset funds explicitly and systematically include environmental, social and governance factors in investment analysis and investment decisions. This ESG integration underpins a responsible investment approach, and allows investors to better manage risks whilst seeking sustainable, long term returns. All funds also exclude securities issued by companies directly involved in the manufacture, development or trade of cluster munitions and anti-personnel landmines.

​While we continue to integrate ESG within all our propositions, our Planet+ range of funds is designed to deliver on our ambition to help fix the planet, one investment at a time. The range includes our impact funds, sustainable funds and ESG+ funds.

These funds will seek to deliver ESG, Sustainable or Impact objectives and outcomes in addition to their financial objectives.

​As a minimum, all funds in the Planet + range apply an agreed set of exclusions: 

  • companies involved in the controversial weapons industry
  • companies deemed to be in breach of the United Nations Global Compact Principles on human rights, labour, the environment and anti-corruption
  • companies involved in tobacco (production, trading and distribution)*
  • adult entertainment (production and those deriving revenue from that business)*
  • companies providing gambling services*

​* thresholds apply (5% max revenue from producers, 10% max revenue from distributors). For further information, please refer to the Fund section.

​Active stewardship and ESG integration are fundamental pillars for all strategies within the framework.

Impact funds

  • Seek to deliver a dual objective: measurable positive impact alongside financial return
  • Aim to invest in companies that deliver material, measurable positive societal impacts by addressing the world’s major social and environmental challenges, framed against the UN Sustainable Development Goals (SDGs). While we support the UN SDGs, we are not associated with the UN and our funds are not endorsed by them.
  • Provide transparent impact reporting

Sustainable funds

One or more of the following Sustainability Factors may apply: 

  • The investment universe is driven by sustainability considerations, which might include climate change mitigation, pollution prevention, sustainability solutions (environmental, social) and/or approaches that address one or more of the UN SDGs. While we support the UN SDGs, we are not associated with the UN and our funds are not endorsed by them.
  • An investment approach that selects companies/issuers with strong ESG credentials
  • A clear ambition, supported by explicit targets, to drive sustainability performance across the portfolio

ESG+ funds

  • Apply a Positive ESG Tilt to companies or issuers with better ESG characteristics (i.e. excluding companies or issuers with poorer ESG characteristics, for example those that have high exposure to significant ESG risks and fail to manage such risks).

ESG integrated funds

  • Company-wide exclusions apply (cluster munitions, anti-personnel landmines). Some strategies may have additional ESG exclusions
  • Financially material ESG data is available to all funds and integrated into the risk management and decision making process

Planet+ range of funds

Investing for a more positive future.

Read more

Our approach to climate change

 
Climate change presents immediate systemic risks to the financial stability of the global economy, the long-term environmental health of the planet, and ultimately the cohesive functionality of society. The impacts of rising global temperatures are already being felt, with increasing threats on every continent to natural habitats, human populations and the economy.

As a FTSE 100 company and as a long-term asset owner and asset manager, M&G plc has a responsibility to our customers and to society to invest in ways which ensure a sustainable future, including tackling climate change and enabling a transition to a low carbon economy. In March 2020, M&G plc announced two new commitments to focus and accelerate our efforts, and those of our partners and investees, to address climate change:

As an asset owner and asset manager, we aim to achieve carbon net zero investment portfolios by 2050 in line with the Paris Agreement and the UK Government’s target.

As a company, we have committed to reduce our own carbon emissions to net zero by 2030.

M&G plc is a holding company, some of whose subsidiaries, including M&G Investments, are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority.

 

Our approach to climate change (pdf)