Liontrust Sustainable Investment Annual Review 2022 - Flipbook - Page 32
2022 Initiative
Description
We said we would:
In 2022:
Preserving and
restoring nature
To engage with investee • Create a new focus
• Met with six water
companies to encourage
on preserving and
companies on their
better information and
restoring nature.
biodiversity action
reporting of natural
plans and the
• Encourage investee
capital impacts from
controversy relating
companies to report on
their activities, products
to combined sewer
natural capital impacts
and services, as well as
overflows.
from their activities,
policies and programmes
products and services, • Assessed external
that preserve and restore
and gauge the level
research providers’
nature and promote
of
preparedness
for
data and tools.
biodiversity. We will also
increased
reporting,
engage to understand
• We asked American
such as the Taskforce
better companies’
Tower about its
for Nature-related
dependencies on natural
thoughts on TNFD.
Financial Disclosures
capital and how this
In addition, we
(TNFD).
might impact financial
asked a further three
returns.
• Encourage investee
companies about
companies to
their approach to
adopt policies and
assessing their impact
programmes that
and dependencies
preserve and restore
on nature. They
nature and promote
were Ringkjoebing
biodiversity.
Landbobank,
Helios Towers and
• Explore new tools
GlaxoSmithKline.
to better understand
companies’
• We were not able
dependencies on
to sign up to the
natural capital and
Biodiversity Pledge as
how this might impact
a team in 2022, but
financial returns.
we are looking to do
this in 2023.
• Explore collaborative
engagement, such as
the Biodiversity Pledge.
In 2023, we will:
• Explore and decide on
collaborative initiatives
related to nature and
biodiversity
• Use external tools and
data to better assess
nature-related risks
within our portfolios
• Select high-impact
companies to target,
including water
companies
• Look to sign up to the
Biodiversity Pledge at
the wider Liontrust level
Case study: Water companies
The water industry has faced increasing public scrutiny over the
frequency and duration of combined sewer overflows, which has
been highlighted by programmes such as Panorama and in reports
by environmental charities such as Surfers Against Sewage.
We engaged with Anglian Water, Severn Trent, Thames Water
and United Utilities Group, Welsh Water and Yorkshire Water, held
across our SF Managed funds and SF Corporate Bond funds to gain
a further understanding of how these companies are tackling the issue
of combined sewer overflows (CSOs). We also sought the views of
our Advisory Committee members on the environmental performance
of the UK’s water sector, particularly in relation to combined sewer
overflows.
Case study: Ringkjoebing Landbobank
Ringkjoebing Landbobank is
one of the best-run banks in the
industry, serving individuals and
SMEs. Customer satisfaction
rates are best in class and loan
losses are non-existent. They focus on profitable and niche areas such
as renewable infrastructure lending or dental practices and offer a
full-service banking model. The company is highly exposed to our
sustainable investment theme of increasing financial resilience.
32 - Liontrust Sustainable Investment: Annual Review 2022
When we met the CEO and chief of staff, we asked if the company had
assessed nature-related risks in its business, and loan book. We were
informed that currently the business is assessing some agricultural loans
to Danish customers for land in Eastern European countries. Historically
there have been periodic years of poor harvests of crops such as corn,
so scenario analysis is being conducted to determine the level of any
changes to credit risks that occur because of changes in frequency of
weather events. More broadly, it will be looking at the nature-related
risks of their agricultural portfolio with a similar approach.