Investment approach
Jupiter takes a materiality approach to integrating ESG into our investment processes. ESG integration enables us to develop a view of the material risks and opportunities a company or asset is exposed to. Many ESG factors will evolve dynamically and our investment managers seek to understand how these may develop through time. These insights are then incorporated into valuation and investment decisions to the extent that investment restrictions permit.
We take a pragmatic approach towards the integration of ESG drivers within our investment decisions. ESG factors are complex, often overlap and can be interdependent. Furthermore, good quality data may not be available or may be inherently subjective. In order to integrate these drivers into investment decisions, we have an experienced ESG Research & Integration team that work alongside our fund managers.
We have identified material sustainability issues that underpin both Jupiter’s corporate and investment strategy approach. Consideration of material ESG issues is integrated into both investment analysis and decision making. The form this integration takes is tailored according to each team’s asset class, management style, investment process, and the information available to us.
Climate
Climate change represents a material systemic risk for business and for investments. We use our influence as an investor through stewardship and active ownership to encourage companies to identify, manage and mitigate climate change risks or opportunities. Jupiter Fund Management plc is a signatory to the Net Zero Asset Managers Initiative through the Institutional Investors Group on Climate Change (IIGCC).
Biodiversity
Biodiversity underpins healthy societies, resilient economies, and companies’ ability to operate. We signed the Finance for Biodiversity Pledge in 2021 which commits Jupiter to collaborating, engaging and assessing our biodiversity impacts.. More details on the pledge and our commitments can be found at Finance for Biodiversity website.
Human rights
Human rights are basic rights or freedoms to which all human beings are inherently entitled. We recognise the importance of companies respecting and protecting human rights. Companies with poor management of human rights can face a range of issues including fines, workforce issues and supply chain challenges, which may affect their licence to operate. We monitor potential human rights issues affecting our investee companies using third party data providers.
The Responsible Investment Forum (‘RIF’) at Jupiter has been established to review and fully investigate UNGC matters related to target portfolio companies as well as existing investments. The RIF is authorised by the Investment Oversight Committee (‘IOC’) and forms part of the broader sustainability governance at Jupiter.
Human capital
Good human capital management supports both value creation and business resilience, and we believe that investing in human capital correlates with longer-term business success. Human capital management can both upskill and educate a workforce, increase productivity and retain and motivate employees which has a direct impact both on an individual company and on wider society. As active owners, Jupiter seeks to invest in companies that value and invest in their human capital but recognise that good practice will differ depending on a company’s size and business profile.
Corporate governance
Corporate governance is the process by which companies are directed and controlled. Boards of directors are responsible for the governance of companies whilst investors are responsible for determining whether the board and management teams are appropriately skilled and resourced to run the company.
As active owners, we assess company governance on a range of issues. Good corporate governance is key to the success of a company’s strategy and culture. Governance also intersects with sustainability issues and we seek to understand how a company’s governance is connected to the oversight, transparency and effectiveness of its sustainability goals. As active owners, we recognise that good practice will differ depending on a company’s jurisdiction, size, and ownership structure.
Please see our Resources & Reports section for more information.
Active Ownership & Stewardship
We serve as stewards of our clients’ capital and have a duty to act as owners to represent their interests. Our approach to stewardship is centred on the pursuit of sustained value creation and the exercise of our investor rights and responsibilities. This involves the integration of assessing sustainability risks within investments, effective engagement and the application of informed voting decisions. Investment Managers are ultimately accountable for active ownership and are also supported by the Stewardship team.
Stewardship involves confronting real-world complexities where progress may not be linear, and outcomes may be spread over multiple periods. Engagement is a key part of the investor toolkit and dialogue with companies may be used to monitor assets or play a role in affecting change where this will enhance value. Further, as active managers we always have the ability to exit a position.
Investors may have to consider systematic risks such as climate change and biodiversity stress. Our efforts are dedicated to enhancing client interests. Given the systemic nature of risks that investors are faced with, collaboration throughout the investment chain may be desired. In these situations, we may engage directly with other shareholders, investor bodies, civil society groups and/or policy makers.
We firmly believe engagement should be effective and this requires strategic planning and identifying specific objectives. We do not believe volume of engagement itself is a clear indicator of good stewardship.
The exercise of rights and responsibilities through informed voting is fundamental to Jupiter’s active management and active ownership approach. Proxy voting is a representation of our clients’ interests and underpins both accountability and the alignment of interests between asset owners and beneficiaries. Consequently, we have adopted an investment-led approach where voting plays an important role in effective stewardship, the promotion of good governance and our efforts to maximise investor value.
Our Responsible Investment Policy sets out our approach to stewardship and active ownership. Please also refer to Jupiter’s Voting & Engagement Policy and Annual Stewardship Report for further details.
Sustainable Investment Products
We aim to meet our clients’ needs and are supportive of the accelerating shift to a sustainable economy. Jupiter offers funds dedicated to investing in the transition to a sustainable global economy and environmental solutions. Please refer to our Fund Center page for further information including our funds that fall within the scope of the EU’s SFDR Articles 8 and 9 and the UK’s SDR.