For investors seeking reliable income, global diversification and inflation protection, specialist listed infrastructure portfolios aims to provide all three.

Responsible Investing

At ClearBridge Investments, ESG is not merely a screen or an overlay; it is part of how we conduct fundamental research and it defines how we think about all companies considered for investment in all client portfolios. 

 
At ClearBridge Investments, we believe that ESG is the future of investing and that someday it won't even be called "ESG" or designated as a separate discipline; it will become an integral part of the way investors analyse companies. 
We believe that companies who care about the environment, their employees, their customers and their community, are more likely to provide the kind of performance our clients need to meet their long-term goals.
There are many different ways to describe strategies that invest with a view to achieving environmental, social and governance best practices. These include "sustainable investing," "socially responsible investing" and more recently "impact investing". The term "ESG" represents the latest stage in the evolution away from merely screening out certain industries or companies.
Our portfolios do not simply avoid certain industries; we integrate industry-specific ESG factors into our fundamental research process.

 

Learn how we incorporate sustainability in the infrastructure investment process

PRI Scorecard 2020

Strategy and Governance

A+

Listed Equity - Incorporation

A+

Listed Equity - Active Ownership

A

We are proud to have achieved high scores for our investment practices from the United Nations Principles for Responsible Investing (“PRI”) in 2020. We have been a signatory since 2008. 

The PRI is a voluntary framework for financial institutions who commit to integrate ESG factors into their investment analysis and decision-making practices. As a signatory, we adhere to the six guiding principles of the PRI (read further below).

We take our participation in the PRI very seriously and strive in all we do to be guided by  the six PRI principles for the portfolios we manage.

Sustainable Development Goals (SDGs)

We understand that while the SDGs are thematic rather than company-specific, they do help align sector and company-specific ESG considerations with broader societal goals.

Having regard to social and environmental considerations is a core aspect of our investment process. We therefore seek to align the targets and goals of the SDGs with our investment outcomes. As a committed advocate for ESG best practices, we believe the SDGs are a globally accepted roadmap to gauge progress that can benefit society and the environment while motivating companies to create long-term sustainable value.

Our ESG stakeholders

 
 

FAQs for ClearBridge in Australia

Yes, our current policy is the 'Responsible Investment Policy'.

The primary motivation for adopting a responsible investment approach was to align our objectives as an institutional investor to those of society at large. Moreover, we believe that a responsible investment approach can lead to a comprehensive understanding of a range of material issues which should ultimately lead to lower risk, resulting in the improved long-term performance of our investment portfolios.

By integrating sustainability considerations such as ESG as well as other factors, such as disruption, into our investment process and approaching the ownership of equity from a long-term perspective, we are exercising our responsibility as an investment manager to act in the best interests of our clients.

Yes. Our current policy can be accessed here.

Our investment team are active participants in corporate governance matters that arise as a result of investments in securities. We think of ‘active ownership’ as the support of good corporate governance in companies and seeking to achieve change where we think that governance is poor or less than ideal.

We delegate proxy voting discretion to Portfolio Managers, as voting is a matter relating to the investment decision-making process. In voting proxies, we are guided by the law and our general fiduciary principles. Our goal is to act prudently, solely in the best interest of the beneficial owners of the accounts we manage. We attempt to consider all factors that could affect the value of the investment and will vote proxies in the manner that we believe will be consistent with efforts to maximise shareholder value.

Yes, as a signatory, our commitment to the six Principles for Responsible Investing is outlined below:

  • Principle 1:  Incorporating ESG is integral to our investment process, from both a fundamental research and portfolio construction perspective, and is the responsibility of our specialist investment team.
  • Principle 2: We are active managers and incorporate ESG issues into all our ownership policies and practices. We pursue ESG matters with companies in both formal and informal settings, including: meeting with senior management and their peer companies;  speaking with other investors;  writing letters to Boards of Directors and making submissions to regulators.  We also engage with many other industry participants regularly.
  • Principle 3: We regularly seek appropriate disclosure on ESG issues by the entities in which we invest.
  • Principle 4: We promote acceptance and implementation of the Principles within the investment industry through client communications and industry-related events.
  • Principle 5: We work collectively with the PRI in one-on-one discussions and also in group forums, particularly on issues that relate specifically to the listed infrastructure asset class.
  • Principle 6: We report on ESG related activities (both positive and negative) each quarter or as required, to clients, asset consultants and research houses. We have also presented on ESG topics at industry events, conferences and webinars.

 

When we become a shareholder in a company, we expect to be so for some years, and the relationship with management is an important part of the process. We believe that meeting a company’s management is essential in gaining a deep understanding of the company’s strategy and operations, and to test our investment thesis. As a long-term investor, we have good access to management and company boards. Contact with companies is through:

  • Company site visits or conference calls
  • Meetings with senior management
  • Company roadshows
  • Meetings at conferences.

Our investment team also engages with management on ESG and related issues in regular meetings and conversations. These discussions seek to provide feedback to companies on:

  • Corporate strategy, encouragement to consider long-term value creation and long-term risk management, including ESG issues
  • Capital management and structure
  • Executive remuneration and incentive schemes, ensuring that executive remuneration is both appropriate for the asset and that incentives are aligned with the interests of long-term shareholders.

In addition to executive management, the investment team engages with the Chair where this is separate, and the supervisory board in a two-tier structure. Discussion topics include, among other issues:

  • Remuneration policy of the board, and in particular decisions around incentive related pay.
  • Succession plans, for the senior leadership team and the next level of executives.
  • Reporting policy and other governance-related issues.
  • Where there are any issues raised, the information is recorded in the company research database.

Responsible investing is an integral part of our investment process, from both a fundamental research and portfolio construction perspective. As such, it is not the responsibility of one dedicated individual, but rather the responsibility of the entire investment team. Oversight of the sustainability process within the infrastructure investment team is the responsibility of our Sustainability Committee that comprises Portfolio Managers and Senior Analysts.

Our specialist infrastructure investment team have continually evolved our responsible investing process, having incorporated sustainability into cash flows, and a governance factor into our hurdle rate since our inception. We have expanded this to broader ESG factors by engaging Sustainalytics (as their first Australian client) in 2012. We continue to evolve our approach to ESG through the current proprietary scorecard introduced in 2020.

Since 2013, ClearBridge in Australia has partnered with WaterAid to fund sustainable infrastructure projects that bring safe water, sanitation and hygiene education to villages in Timor-Leste. During 2019, ClearBridge Investments broadened this corporate partnership to underwrite a critical project in Colombia to bring water to the village of La Guajira.

Discover more

Our Partnership with WaterAid