SASB Report 2023

Disclosure

Investment management requires good judgement. We believe that a team’s judgement can be improved by bringing together people who have different views and perspectives. We are therefore proud to employ people from a wide range of backgrounds.

In addition to the gender and age diversity set out below, we have a range of educational backgrounds and university degrees in more than ten different subjects. These include economics, modern languages, history, chemistry, physics and philosophy.

The table below outlines the gender and age diversity of Meridiem’s 64 employees.

Gender

Age

We aim to create an inclusive culture that promotes idea generation and constructive challenge. We strive to create an environment where people feel valued and are able to openly express their views and bring their true selves to work. We have introduced a number of initiatives to promote this culture, including having an open-door policy where senior management are always available to talk to staff across the business.

We recognise that measuring the success of these policies is difficult as there are no standard metrics available for monitoring inclusion. That said, in 2021 we began conducting a staff survey that focuses on wellbeing and how people feel about their roles.

Using the research conducted by Oxford University’s Centre for Wellbeing in collaboration with recruitment firm Indeed, we measure the key drivers of wellbeing semi-annually. These scores provide insight into how our team feel at work and why. Since we began tracking these figures in 2021, we have noted that our wellbeing ratings remain in the top quartile of all companies surveyed. We continue to strive to improve wellbeing as we believe that this will foster an environment where everyone can thrive.

Please find below our average results from 2021 to 2024, compared with the average for all companies surveyed.

Finally, we are committed to supporting the future of diversity in our industry. In 2023 we worked with the Sutton Trust to provide inspirational speakers, as well as with the Social Mobility Foundation and Girls are Investors (GAIN) to provide work experience opportunities and summer internships to students from less advantaged economic backgrounds or to encourage more women to enter the investment industry.

Disclosure

1. £6.8 billion

As described below, ESG factors are integrated into all investment decisions for all client portfolios.

2. £0

We do not have a distinct sustainability-themed investment strategy. For all client portfolios, our investment research seeks to identify companies that are benefitting from long-term structural shifts and changes in the way society operates. As described below, we believe that we are in the foothills of a major shift towards managing the planet’s resources more sustainably. The roles that individual companies play in this shift and the extent to which they manage their business operations responsibly are important considerations in every investment decision we make.

3. Approximately £1.3 billion of our assets are screened for specific client restrictions

We do not apply firm-wide ethical screening because we consider our clients to be best placed to decide how their ethical views are reflected in their investment principles. We are happy to discuss these with clients.

Many of our private clients and charity clients have ethical restrictions in areas such as tobacco, alcohol, gambling, pornography and fossil fuels. Our focus on companies with strong and growing cash flows for the longer term often precludes many companies that tend to screen poorly on an ethical basis.

Disclosure

As long-term shareholders in a focused list of companies, we have a responsibility to consider any factor that might impact the durability or value of our clients’ investments. Environmental, Social and Governance (ESG) are all factors that might impact the long-term value of a company. Opportunities and risks related to ESG are therefore key considerations in every new investment we make, as well as our ongoing decision to hold shares in a business.

In the long term, we believe that well-chosen equities, benefitting from structural tailwinds and bought at a reasonable valuation, will be the main driver for achieving real returns. A key element of this approach is recognition of the global shift towards more responsible management of our planet’s resources. This is being driven by the demands of a rising population, an expanding middle class and the need to address the challenges posed by climate change and biodiversity loss.

Poor governance and environmental and social risks are business risks. To maintain their social licence to operate, companies must address these risks, particularly given rapidly changing regulation and consumer preferences. We therefore look for management teams that understand and plan for these risks.

All research is carried out by our in-house investment team, not a separate ESG department. Owning shares in 25 to 40 companies means that we can devote a considerable portion of our research resources to each company and gain a full understanding of the material risks they face. This also allows us to punch above our weight in terms of influence.

We use a range of sources to obtain this information, predominantly the information we obtain directly from companies. For some years, we have been actively encouraging companies to be more transparent in their disclosure of ESG metrics. We supplement this with information provided by third parties such as Credit Suisse’s HOLT, ISS, Sustainalytics, sell-side analysts and industry specialists.

We are pleased that our efforts have been recognised with a 5 Globe Sustainability Rating and Low Carbon Designation from Morningstar for our:

• TM Veritas Equity Strategy Fund
• Protea Fund – Veritas High Equity
• Protea Fund – Veritas Core Equity with Fixed Income.

These ratings are a natural outcome of our investment approach and we do not target a particular score. Further details are available on request.

Since the end of 2022, we have been publishing an annual TCFD-aligned (Task Force for Climate-related Financial Disclosures) climate report.

Disclosure

We are long-term investors who aim to protect and grow our clients’ assets in real terms. When we buy shares in companies, we become business owners, often for periods of 5-10 years, or even longer.

Our stewardship activities are therefore an integral part of our investment approach.

How we behave as shareholders is closely aligned with the long-term nature of our clients’ objectives. This is because we recognise the interdependent relationships between our clients, ourselves, the companies in which we invest and wider stakeholders.

Our stewardship work is guided by our four principles:

• Invest in high-quality companies: we will not hold shares in companies where we have identified a material risk to the long-term viability of the business.
• An aversion to box ticking: we focus on what is most material to each business.
• A culture of partnership with management teams: we value progress in pursuit of long-term sustainability.
• A focus on all stakeholders: we recognise that businesses exist within society and therefore have a duty to all stakeholders, not just shareholders.

Given our investment approach and the in-depth research that we carry out prior to becoming shareholders, both in relation to financial and non-financial issues, we are unlikely to become shareholders in a company that faces significant, material risks. Our stewardship activities are, therefore, generally focused on issues which will enhance the long-term durability of the company but which, if not addressed by the company, would not change our investment thesis.

We also regard shareholder voting as an important means of communicating with companies and we therefore exercise our right to vote on behalf of clients. We seek to understand each company’s individual circumstances and history. This enables us to apply our voting principles flexibly and appropriately to support company’s long-term success.

In line with our stewardship principle of focusing on materiality, each voting decision is taken on a case-by-case basis by our investment analysts, based on independent judgement, analysis, and the outcome of engagements with companies. As we aim to invest only in well-run companies that have strong management teams and governance structures, we typically expect to vote in-line with board recommendations.

We subscribe to a proxy voting service provided by Institutional Shareholder Services (ISS), a global leader in corporate governance and responsible investment advice. ISS provides us with in-depth analysis of shareholder meeting agendas and voting recommendations.

However, we do not automatically follow ISS recommendations. As highlighted above, each voting decision is taken on a case-by-case basis. We consider ISS reports, alongside our own analysis, experience and dialogues with the company concerned, and apply independent judgement when reaching each voting decision. Should ISS recommend voting against company management, where appropriate we will engage with company management to improve our understanding prior to making a decision.

We are delighted to have been included on the signatory lists to the UK Stewardship Code every year since 2021. Our latest Stewardship Code Report is available on our website.

Disclosure

*+3rd party funds from 2023

Disclosure

*+3rd party funds from 2023

Disclosure

81%

Disclosure

To calculate our financed emissions, we have followed the Partnership for Carbon Accounting Financials (PCAF) methodology for listed corporate equities and bonds. We used our current market value of the investment and the Enterprise Value Including Cash (EVIC) of the issuing parent as of 31 December 2023. The Scope 2 emissions are built on a waterfall logic which prioritise location-based emissions where available and then market-based emissions. We also use reported data where available and, if not, estimated data based on Sustainalytics’ propriety methodology. However, because greenhouse gas emissions are reported on a year delay, i.e. 2022 emissions data is released in 2023 reports, we are using 2022 emissions data.

In 2023, we started incorporating our share of the financed emissions of the third-party funds we are invested in. The share was calculated as our market value in the third-party fund divided by the total AUM invested in that third- party fund.

We did not include cash and supranational bonds in our calculations because they are not considered to have any associated emissions according to PCAF.

Financed emissions formula