Chief Investment Officer and manager of the Premier Miton Diversified Sustainable Growth Fund
For information purposes only. Any views and opinions expressed here are those of the author at the time of writing and can change; they may not represent the views of Premier Miton and should not be taken as statements of fact, nor should they be relied upon for making investment decisions.
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Firstly, what do we mean by sustainable?
The Premier Miton Diversified Sustainable Growth Fund invests in fixed income (bonds), equities (company shares), property company shares and other asset classes which display strong Environmental, Social and Governance (ESG) criteria and are aligned with sustainable growth themes.
The environmental and social impact criteria may include: carbon emissions and resource usage, whilst for governance we will assess corporate board and remuneration structures amongst other factors.
The United Nations Sustainable Development Goals (SDGs) are a globally recognised framework for reporting sustainable outcomes. The 17 SDGs were adopted by all United Nations Member States in 2015 and provide a shared blueprint for peace and prosperity on the planet, now and in the future. They recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – while tackling climate change and working to preserve our oceans and forests.
The SDGs are used to help define the sustainable growth themes and the investments in the fund are typically aligned with one of the themes. There are currently nine themes within the fund. The themes are constantly reviewed and can be adapted or changed on an annual basis as society, the climate and technology change, which also shifts the investment landscape. More details on the themes and examples of the fund’s investments can be found in the bi-annual Sustainability Report.
One sustainable investment theme we are considering adding for 2024 is biodiversity. Whilst it is currently included within the Sustainable Cities & Communities theme, we believe its increasing importance may deserve it developing into a theme in its own right, particularly as more investment opportunities become available.
Helene Winch is central to our sustainable investing efforts and provides more detail on investing in biodiversity and the crucial role that bees play within that, below.
What’s the buzz about bees?
We are all aware of the importance of supporting biodiversity and reversing the deterioration of natural habitats. This is especially important to increase nature’s ability to absorb carbon emissions to help manage climate change. One interesting case study around how this has developed can be seen by looking at solar power plants. In a solar power plant, the radiation coming from the sun’s rays is converted into electricity for domestic or industrial use. The process of electricity production in a solar plant is completely ecological and doesn’t generate polluting elements for the environment, as well as being one of the most efficient renewable energies that currently exist.
When many solar power plants first stated to be built, the construction included the replacement of hedges, seeding of wildflower meadows and a reduction of the often-harmful chemicals used to enhance crop production, as well as pesticides that are detrimental to pollinators, such as bees. During the following years, since solar power plants have become more common, there is strong evidence that there is a return to a thriving mix of biodiversity, evidenced by enhanced honey production.
Bees are important pollinators across all our crops and are vital for food supply in the UK and elsewhere. According to lowcarbon.com, it is estimated that one third of global food production is reliant on insect pollination. Bees are specifically responsible for 70 of approximately 100 crop species that feed 90% of the world’s population. Putting a monetary figure on it, Honeybees alone are responsible for $30 billion annually in crops.
Sweet as honey
One of the investments held in the fund, Foresight Solar Fund, operates 61 solar power plants in the UK, Spain and Australia. The company recently highlighted that one of their local beekeepers has noted a 40% increase in honey yields from his hives as insect life thrives in the meadows and grassland where the solar panels are placed. The sites are well managed to ensure that the habitats continue to improve.
Utility companies can often be aligned with sustainable investment themes. Currently we invest in bonds issued by UK water companies, such as Anglian Water. In the case of Anglian Water, their biodiversity strategy outlines how they conserve plants, animals and our insect friends across their geographical area of the East of England.
It is not just solar farms and utility companies that provide opportunity for the fund to be aligned with the biodiversity investment theme, so too does the property sector. Real estate is a huge contributor to global carbon emissions and companies involved in the industry are working hard to improve the situation. Although we do not currently hold this company in the fund, Tritax Big Box REIT has recently provided a good example of the progress that is being made, when they highlighted their biodiversity initiatives. This included the Littlebrook development, where they have reintroduced a native Dartford bee and created local community walking and cycling paths.
Biodiversity is fundamental to the future well-being of our society and environment. We believe more interesting investment opportunities will appear that support this very clear need.
The final word
Finally, at Premier Miton, we recognise that we are part of a larger investment community and a broader society. We believe in acting responsibly, including through the way we invest and manage our overall business, allowing us to deliver for our clients and play an active role in building a sustainable future. To that end, we are corporate partners of our local Wildlife Trusts and the Tree Council and we are very aware of the importance of supporting biodiversity in the UK.