Responsible investment

“We have a commitment to place environmental, social and governance factors at the heart of everything we do. ESG has been a key part of our investment thinking for many years as has our clients’ interest and awareness of the importance of sustainable investing.”

James Barham, Group Chief Executive

Our approach

We are always evolving our policies to ensure we work to improve investor outcomes. We believe companies that operate responsibly are better positioned to offer investors sustainable, positive returns. As long-term active managers, we are aware that an environmental, social and governance (collectively ESG) event or condition, if it occurs, can cause an actual or a potential material negative impact on the sustainability of a business (sustainability risks) and therefore its future revenue-generating ability.

We evaluate and integrate sustainability risks into our investment decision making process and risk monitoring to the extent that they represent potential or actual material risks and/or opportunities to maximising long-term risk-adjusted returns consistent with our clients’ objectives.

Our investment decision making process drives investment performance, which in turn is used to determine variable remuneration outcomes.  We believe that the direct link between variable remuneration outcomes and ESG factors (including sustainability risk) can be strengthened and enhanced and will look to consider this over the course of the next year.

We have a responsibility as an active asset manager to continuously engage with investees and to enact change through stewardship.

We do not currently consider the principal adverse impacts of our investment decisions on sustainability factors (environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters) on the basis that, while sustainability risks are incorporated into our investment decision making processes, the relevant information required in a principle adverse impact statement remains in draft form and has not yet come into effect  We remain mindful of future developments in regulatory clarity in this regard.

ESG in action

We apply the same standards to our own business that we would like to see in the companies we analyse.

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Principles and values

Our principles and values define the behaviours we consider to be critical for our success. We measure employee performance against the business’s values.

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Carbon neutral

We have been certified carbon neutral by Natural Capital Partners. We have offset our carbon emissions, including all business travel and commuting.

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Staff wellbeing

We have enhanced staff maternity pay and annual leave entitlement. Employees receive medical insurance, including wellbeing and stress management support.

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Voluntary gender pay-gap reporting

We voluntarily publish our gender pay gap. Whilst comparable to industry peers, we continue to take action to move these results in a positive direction.

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Community

Our employee-led charity committee coordinates activities raising funds for charities, earning matched funding from the business.

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Diversity and inclusion

More than 33% of the Non-Executive Directors on our PLC board are female.  We continuously work on ways to improve diversity and inclusions at a firm and industry level.

ESG policies and documents

These policies formally outline the integration of Environmental, Social & Governance factors at River and Mercantile Group and its impact to client outcomes. They show our position on ESG to stakeholders, guide fund managers and investment teams on how to handle ESG issues and demonstrate our overall responsible investment approach.

Evolution of the 'S' in ESG

As the industry has focused for many years on environmental and governance issues, has the social factor of ESG been overlooked?

As part of the 2021 Sustainable Investment Festival, R&M's Roger Lewis discussed why this can no longer be the case.

Our responsible investment team

Roger Lewis

Group Head of ESG

photo of Roger Lewis from River and Mercantile

Roger Lewis

Group Head of ESG

Roger provides expertise and problem solving around Environmental, Social and Governance (ESG) matters at R&M. Areas of focus are designing and implementing strategy, integrating ESG to investment decisions and ongoing asset management, defining solutions for clients and engagement for ESG. Roger previously worked at Aviva Investors, where responsibilities included aligning ESG strategy and factors with investment functions across its £47.3bn Real Assets platform, which invests in property, infrastructure and private debt. Prior to this, Roger held roles at Legal & General Investment Management and J.P. Morgan. Roger has completed the UN Principles of Responsible Investment programme, holds the CFA UK Diploma in Investment Management (ESG) and has passed Level 1 of the Chartered Financial Analyst programme.  Roger is also a passionate advocate for limiting climate change to 1.5 degrees above pre-industrial levels.

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