Finsbury Growth & Income Trust plc Environmental, Social and Governance (ESG) & Sustainability
“As long-term investors our aim is to identify companies that can generate long-term sustainable growth. We have historically found that these companies, more often than not, exhibit characteristics associated with good corporate governance. Indeed, we believe that companies that observe high standards of governance should increase their chances of survivability. To that end our analysis includes but is not limited to; a company’s acquisition/disposal policy, effective deployment of capital within the company, its dividend policy and its remuneration and incentive structures. Moreover, we recognise that management must address environmental and social factors to increase the prospects of long-term survival of their companies.
Thus, whilst not a separate function, our evaluation of ESG factors is a natural part of our investment process. As a result of our focus on “exceptional” companies (as defined above), we do not invest in capital intensive industries (energy, commodities or mining) or any companies involved in the extraction and production of coal, oil or natural gas. We also tend to avoid industries that we judge to be detrimental to society and, as a result, may be exposed to burdensome regulation or litigation (e.g. tobacco, gambling or arms manufacturers) that could impinge on financial returns. Finally, we note that a fortuitous (if coincidental) outcome of our process is that a number of holdings in our portfolios play an important positive social role, for example through providing access to education or encouraging saving for the future.”
- Lindsell Train
Environmental, Social and Governance (ESG) Integration
Lindsell Train Limited (Lindsell Train) is an asset management company that specialises in the management of Global, UK and Japanese equity portfolios. The primary aim of Lindsell Train is to protect and grow the real value of our clients’ capital over the long term. To achieve this aim, Lindsell Train invests in, what we have determined to be, “exceptional” companies - that is durable, cash generative businesses that achieve higher than average returns on capital - with the expectation of holding them for the very long term. We will always endeavour to act in the best interests of our clients as stewards of their capital, although we do not aspire to be activist investors.
Click here to read Lindsell Train’s Environmental, Social and Governance (ESG) Integration
ESG Integration: Reflections on Sustainability
Since the inception of the firm, one of the things ingrained in Lindsell Train’s philosophy is to seek truly sustainable brands - those which have survived the challenges of the past and have the potential to continue growing, adapting and delighting consumers worldwide. And against this backdrop, one of the things we think about the most these days is the disruptive potential of technology and the impact of increasingly rapid global digitisation on the brands and products we invest in. As investors who are continually seeking to ensure that our portfolio companies’ brands are truly top tier and irreplaceable, we are alert to the fact that a key effect of digitisation is that the consumer’s relationship with brands has changed, and consumer demand for “sustainability” is growing faster than ever.
Click here to read Lindsell Train’s Reflections on Sustainability
Proxy Voting Policy
Finsbury Growth & Income Trust: Exercise of Voting Powers
The Board has delegated authority to Lindsell Train (as Portfolio Manager) to vote the shares owned by the Company that are held on its behalf by its Custodian. The Board has instructed that the Portfolio Manager submit votes for such shares wherever possible and practicable. The Portfolio Manager may refer to the Board on any matters of a contentious nature.
The Proxy Voting Policy sets out steps taken by Lindsell Train Limited (“LTL”) to ensure votes are cast in a manner consistent with the best interests of its investors and the objective of maximising long term investment returns for clients.
LTL believes that companies that observe high standards of corporate governance should increase their chance of survivability and their ability to generate long-term sustainable growth.
As a Tier 1 signatory, LTL fully supports and adheres to the Financial Reporting Council’s (FRC) UK Stewardship Code. Further information on how governance matters are assessed and considered within our investment process is set out in the Firm’s Responsible Investment and Engagement Policy and our UK Stewardship Code statement, both of which are made available on our website.
Click here to read Lindsell Train’s Proxy Voting Policy
The UK Stewardship Code
Lindsell Train is an asset management company that specialises in the management of Global, UK and Japanese equity portfolios. The primary aim of Lindsell Train is to protect and grow the real value of our clients’ capital over the long term. To achieve this aim, Lindsell Train invests in what we have determined to be “exceptional” companies - that is durable, cash generative businesses that achieve higher than average returns on capital - with the expectation of holding them for the very long term. We will always endeavour to act in the best interests of our clients as stewards of their capital, although we do not aspire to be activist investors.
The UK Stewardship Code (the “Code”), published by the Financial Reporting Council (the “FRC”), aims to enhance the quality of engagement between asset managers and companies in which they invest. The Code, first published in 2010, sets the benchmark in the UK for institutional investors to meet ownership obligations in respect of their holdings of UK companies. Lindsell Train is pleased to set out how we apply the seven principles of the Code.
Click here to read Lindsell Train’s UK Stewardship Code