As a boutique investment manager, Origin focuses solely on the management of Global Equities (and subsets thereof).
Our overriding focus is our fiduciary responsibility towards our clients, and as such will only ever incorporate ESG considerations into its investment process should it be felt to be in the direct fiduciary interest of the client. Origin currently incorporates governance in the due diligence process in the form of the accounting score which forms an element of capital management or quality factors that are used in the investment process. Moreover, Origin’s portfolios are skewed towards companies with strong governance and sustainability as the investment process focuses on companies with history of high profitability and growth. Origin will hold stocks for as long as they clearly continue to embody the target characteristics in order to retain objectivity and to ensure that stocks are judged using a uniform data set.
While it is currently our opinion that most ESG metrics under consideration by the fund management industry do not meet our criteria of having a direct fiduciary impact on the shareholder, the Origin investment team have identified the potential for contingent liability driven by the emissions of carbon to be a significant risk factor for the sustainability of a companies returns going forward. So within our Capital Management component we consider the extent to which a company's future returns and indeed its cost of capital today could be adversely impacted by the levying of a tax on its carbon emitted. Other things being equal, we will express a preference for businesses without that risk. The team have created a bespoke carbon risk measure and are able to decile rank all companies based on this particular measure of risk and by so doing reduce the relative attractiveness of the heaviest carbon emitters.
UN Principles of Responsible Investing
The global investment management industry has translated this call to action into a framework of investment analysis that not only incorporates financial metrics but also embeds ESG factors into this analysis. Since the establishment of the UN Global Compact in 2005 and the release of the Principles of Responsible Investing in 2006 (UNPRI), ESG analysis has become an integral part of the investment industry and these initiatives have built an increasing recognition that ESG issues can affect the performance of investment portfolios. ESG analysis and integration is about identifying and quantifying risks, engaging with companies to address and redress them, but it is also about articulating potential opportunities.
We are signatories of the UNPRI to meet the demands of our clients and the industry as a whole. In line with UNPRI we seek to engage with companies, in a manner that is in line with our engagement policy, other investors and stakeholders directly and through collaborative organisations and activities.
EU Sustainable Finance Disclosure Regulation
The Firm are currently investment manager to an Article 8 Fund, meaning that ‘it promotes environmental and/or social characteristics’ under SFDR. These new regulations require investment managers to disclose how they integrate sustainability into their investment process and product governance. The Firm continue to adhere to these requirements for aslong as they remain investment manager.
Please click on our resources below to learn more about our approach to Sustainability and ESG.