Ethical/SRI Investments
Investors are becoming increasingly aware of the inherent link between a company’s commitment to sustainable practices and its long term profitability and access to lower cost of capital. BTIM’s SRI team seeks opportunities to invest in companies that implement and display sustainable principles into their business strategies. BTIM offers two investment strategies in socially responsible investing: Sustainability and Ethical. The table below summarises the key aspects of these different approaches.
| Sustainability | Ethical | |
| Stock selection | Bottom-up, all major industry sectors represented | Bottom-up, some industry sectors not represented |
| Portfolio construction | Disciplined process including social, environmental and financial criteria | Core BT Australian Equities portfolio construction process with ethical overlay |
| Ethical preferences | Generally no specified exclusions – not setting personal ethical preferences | Avoid or promote certain areas – aligning personal or institutional values with investments |
| Rewarding companies | Rewards ‘best’ companies across all sectors – encourages all sectors to improve | Positive screens promote certain areas of investment |
- BTIM’s sustainability funds adopt a ‘Best of Sector’ investment approach, evaluating Australian companies based on environmental and social criteria as well as financial performance. These funds are suitable for investors seeking a low-risk, quantitative approach to portfolio construction. Best of Sector or Sustainability Funds:
- BTIM’s ethical fund utilises our core Australian equity investment process but with the addition of positive and negative screens based on sustainability criteria. The fund is suitable for those investors who wish to actively avoid or favour certain areas of investment, usually aligning with their core beliefs and values.
BTIM has appointed Regnan Governance Research & Engagement to provide Environmental, Social and Corporate Governance (ESG) research and engagement services. Recognising that ESG factors affect long term shareholder returns, Regnan promotes strengthened ESG performance within S&P/ASX200 companies.
BTIM is committed to delivering long term investment performance. Research shows there is a strong link between good sustainability performance and corporate profitability. Also, in terms of environmental screening, a growing body of research suggests that superior environmental management usually correlates with high standards of corporate management which requires attention to more than just short term financials.
1 Formerly known as the BT Wholesale Ethical Conservative Fund
2 Formerly known as the BT Institutional Ethical Balanced Fund
