MSCI Very Severe Controversy (Red Flag)
Responsible Investing Solutions
At Kleinwort Hambros, we aim to demystify responsible investing, while combining the strengths of all conventional approaches. Our proposition incorporates the merits of ethical, ESG, sustainable, and impact investing. From the exclusion of controversial sectors to the direct influence of impact funds, we have adopted techniques spanning the spectrum of responsible investing principles.
Responsible investing is perhaps the most significant movement in the investment industry for a generation, yet the lack of a single, clear definition risks undermining its importance. For investors who want to harness the power of their capital to effect positive change, the vast array of definitions can be confusing, if not discouraging.
We limit exposure to companies in the following categories and/or involved in the following controversial activities.
The key controversial sectors we limit exposure to are listed below. We also exclude companies with a MSCI ESG rating of CCC.
Companies in breach of UN's Global Compact Principles
Unconventional Oil and Gas
Companies with an MSCI ESG Rating of CCC
1Companies that have any ties to cluster munitions, landmines, biological / chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, non-detectable fragments and Nuclear Weapons (outside NPT).
We integrate ESG into our fund selection process.
Third Party ESG Reports: We utilise third party ESG reports to assess the overall ESG credentials of a fund. This helps us quickly identify any areas we need to pay particular attention to.
Proprietary ESG Scorecard: A proprietary ESG scorecard helps us rank the funds on a number of factors such as % of holdings in MSCI Very Severe Controversy (Red Flag) companies, Weighted Average Carbon Intensity, Sustainable Impact % and several others. We only include funds with BB rating or higher.
Active Engagement with Asset Managers: As part of our regular due diligence we review the ESG approach of our asset managers. If we have concerns related to assets that individual funds are invested in, we bring it to manager's attention and ask for an explanation or divestment from those assets.
MSCI is a company which has 40+ years of experience analysing data from thousands of sources. MSCI ESG Rating is designed to measure a company’s resilience to long-term, industry material environmental, social and governance (ESG) risks.
Our Responsibility Journey
Launched Responsible Investment Committee
Started excluding controversial sectors – for example thermal coal - from direct holdings of all managed portfolios
Committed to HM Treasury’s Women in Finance Charter, with a target of achieving 50% of women in senior roles by 2025
Became a founding partner of the WealthiHer Network, which champions the transformation of the finance industry’s approach to women
Signed the UN Principles of Responsible Investing and became a member of the UK Sustainable Investment and Finance Association
Created a dedicated Responsible Bank Committee chaired by the CEO to review, define and implement the bank’s responsibility activities, targets and roadmap
Together with SG Group, we raised over £925k for CLIC Sargent, the UK’s leading cancer charity for children and young people
7,732 Corporate Social Responsibility (CSR) volunteering hours logged in 2020 by Kleinwort Hambros staff
Our new London offices - One Bank Street - achieved the highest sustainability classification as a building and for interior design by BREEAM, the world's longest established method of assessing, rating, and certifying the sustainability of buildings
As part of our commitment to increase transparency regarding responsible investing, we included ESG metrics and the carbon intensity of all our portfolios in marketing documents and client reporting
We are proud to support Shelter, Jersey Women’s Refuge, GROW and Clubhouse as our staff selected charity partners
We planted over 5,700 trees in partnership with MyTree, a specialist in reforestation projects
72% of investments are now subject to ESG integration processes
Working with an external consultant to measure the carbon impact of our business activities, as part of our Net Zero roadmap
Our new Gibraltar Office is rated Grade A for energy efficiency & environmental impact
Integrating ESG criteria in the selection of alternative assets, for example real estate & private equity