Accelerating our ambition
With our three values as our compass, our responsible investment ambition aims to minimise negative impact and increase positive impact in the world and society.
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Practical implementation is integrated, logical and systematic—based on industry guidance from the Principles for Responsible Investment (PRI), Global Real Estate Sustainability Benchmark (GRESB), and the Impact Management Platform (IMP), amongst international reporting standards and regulations.
Our overall approach and philosophy, ESG integration, exclusions, stewardship, and impact integration processes are well documented in our responsible investment policies, which are available on Anthos’ website. All our policies help us assess how we are doing well, areas for improvement, and where we can use our influence to better achieve our ambition. We review our policies every year.
We define our overall responsible investment ambition with three sets of objectives with nine sub-ambitions. Some of these are significant in scope and level of resource required, whilst others we see as baseline necessities.
We are reviewing these ambitions in 2023 while working to improve the methodologies that help us categorise the various types of impacts an investment could have. We report progress below, but we caution the reader to the various underlying criteria that affect the outcomes for these high-level targets, and the level of aggregation which for better or worse hides some of the nuances.
Nevertheless setting these ambitions helps us improve and sharpen our assessments and understanding of the market and, as always, we invite further dialogue.
Strategic objectives
Progressing on net zero
Our net-zero ambition reflects our commitment to climate action. In 2022, we did significant work in this area which included developing our carbon emissions methodology to include nearly 80% of all assets under management, across public and private markets.
This is significant because it provides a strong baseline for us to execute our levers of influence to reduce emissions. Namely, engagement, investing in green solutions, and exclusions as a last resort. To document these efforts, Anthos developed its first climate policy and investment handbook which we intend to use as a foundation in conversations with clients in helping them achieve their net zero goals.
Increase allocations in funds that benefit stakeholders and contribute to solutions
We have slightly increased our allocations in funds that benefit stakeholders (B). This is due to the addition of new B funds that were introduced to our portfolios in 2022. The increase in B funds is a result of the addition of new funds to absolute returns, fixed income and equities, as well as rescoring one fund in private equity from an IMP score of A (acts to avoid harm) to B, following a review of their scorecard.
On the other hand, there has been a slight decrease in allocations to funds that contribute to solutions (C).
The only asset class that added new C funds was multi-asset impact, which constitutes a small portion of our overall assets under management. However, the money previously invested in C-rated funds has been reallocated to other types of funds. This may be attributed to the challenges faced by impact/sustainable investments in 2022, which may have influenced some asset classes not to allocate more assets to C-rated investments.
Decrease allocations in funds that may/do cause harm
Our investment portfolios saw a notable rise in the share of funds that may/do cause harm (MD). The increase is due to several factors, including the reallocation of assets from other funds, potentially from IMP A funds, to MD funds. 2022 was also a challenging year for investments, where our investors made prudent risk management judgments to invest in passive funds, which do not score on the IMP methodology. A restructure of our asset base may have also impacted the overall scores.
Anthos’ responsible investment team works alongside the investment teams to monitor these scores and address ways to accelerate allocation to funds with more sustainable strategies, whilst ensuring risk-adjusted returns remain the priority.
Find out more about how Anthos uses the IMP's ABC methodology in our Positive & Impact Investment Policy.
Process objectives
ESG and impact assessments
From 2021 to 2022, we increased the share of assets under management mapped to our ESG and IMP assessments as follows:
Annual monitoring and engagement on ESG and IMP
The foundations
SDG mapping and alignment
The SDGs are a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity. Mapping investments to the SDG framework helps to align our investments with global priorities and action plans.
In 2022, we joined the SDI Asset Owner Platform (SDI AOP) which combines human and artificial intelligence to produce a way to map investments to the SDGs. It does this by focusing on revenues derived from specific products and services that contribute to the SDGs, based on a well-developed taxonomy.
Initial screens of our equities portfolios showed that 16.1% of invested capital is aligned with the SDGs, versus 14.5% for the MSCI World index. However, we note the conservative limitations as we have an allocation to a listed real estate investment trust (REIT) strategy which we believe contributes to SDG 11 (sustainable cities) due to its focus on real assets and advanced ESG. As we venture into more complex asset classes, we are curious to see whether the results reflect our own intel derived from deep due diligence of the investments.
O
Asset class offering
SDG 2
0.30%
SDG 3
12.00%
SDG 4
0.20%
SDG 6
0.30%
SDG 7
2.10%
SDG 9
0.30%
SDG 11
0.50%
SDG 12
0.30%
SDG 13
0.00%
SDG 14
0.20%
SDG 15
0.00%
16.1%
| SDG | Example | Description |
 | US equities | This fund invests in high-growth US companies. It’s highest sector allocation is healthcare. |
| Global equities | The strategy has a dual financial and impact return objective. It invests in companies that deliver positive change. It invests in several healthcare companies. |
 | Global equities | This fund invests in companies expected to gain from the green energy transition. |
| Global equities | The team seeks to drive transformational change towards net zero by investing in high-performance companies with sustainable credentials. |
16.1% of our equities portfolios aligns with the SDGs. This only reflects companies that, through their revenues coming from specific products and services, align with a relevant sub goal of the SDGs. This includes ‘majority’ and ‘decisive’ assets, which means that the companies are involved in positive activities for more than 50% of the total revenues for ‘majority’ assets and between 10% and 50% for ‘decisive’ assets. Companies where the SDI percentage was less than 10%, or that were involved in disqualifying (negative) activities for more than 10% of the total revenue are left out of the analysis. 8% of the portfolio involved assets that are not able to be mapped to the SDI data, such as liquidity, real estate (REIT), or other instruments that did not result in a match with the data.
Exclusions exposure
We remained well below our exclusions threshold for listed assets in 2022.
For more information, see our Exclusions policy found on our website.
| Sector exclusions | |||
| Equities | Fixed income - high yield | Fixed income - investment grade | |
|---|---|---|---|
| Total exposure to exclusion criteria | 1.53% | 0.61% | 0.38% |
| Military contracting | 0.47% | 0.44% | 0.17% |
| Nuclear weapons | 0.47% | 0.20% | 0.11% |
| Biological and chemical weapons | 0.00% | 0.00% | 0.00% |
| Small arms | 0.00% | 0.00% | 0.00% |
| Gambling | 0.01% | 0.14% | 0.00% |
| Tobacco | 0.02% | 0.00% | 0.16% |
| Adult entertainment | 0.00% | 0.00% | 0.00% |
| Depleted uranium | 0.30% | 0.00% | 0.00% |
| Anti-personnel mines | 0.00% | 0.00% | 0.00% |
| Cluster weapons | 0.00% | 0.00% | 0.00% |
| Arctic oil & gas | 0.00% | 0.00% | 0.00% |
| Thermal coal extraction | 0.55% | 0.03% | 0.05% |
| Oil sands | 0.02% | 0.00% | 0.00% |
| White phosphorus | 0.00% | 0.00% | 0.02% |
| Global standards | 0.00% | 0.00% | 0.01% |
| Disengaged | 0.03% | 0.00% | 0.00% |
| Country exclusions | |
| Fixed Income - emerging markets debt | |
|---|---|
| Country screening | 0.06% |
| Belarus | 0.00% |
| Central African Republic | 0.00% |
| Iran | 0.00% |
| Libya | 0.00% |
| Myanmar | 0.00% |
| North Korea | 0.00% |
| Russia* | 0.05% |
| Somalia | 0.00% |
| South sudan | 0.00% |
| Sudan | 0.00% |
| Syria | 0.00% |
| Venezuela | 0.01% |
| Zimbabwe | 0.00% |
Powered by Sustainalytics, 2022.
*The Russia country exposure refers to non-disclosure forwards which cannot be sold.
Continuous learning
In 2022, our workforce undertook trainings which helped us to better understand the challenges associated with these challenges so we can better invest in the solutions:
- Climate: Almost all employees took climate training, developed in collaboration with our parent company, COFRA.
- Human rights: As part of our commitment to human rights, we conducted several focused workshops with Shift, the leading centre of expertise on the UN Guiding Principles on Business and Human Rights. We had strong representation from across functions at Anthos, including investments, management, data & technology, client advisory & solutions, operations, as well as the Board.
Principles for Responsible Investment (PRI) assessment
The PRI is an important layer of external validation for responsible investors. Anthos has been a signatory since 2019. Unfortunately, the PRI faced a delay with reporting in 2022 due to some enhancements to the assessment. Whilst the delay in reporting is not optimal, we continue to use the PRI as a central source of guidance for our own ESG implementation framework.
We are eagerly anticipating the next assessment in 2023, as we use it to identify any gaps in our current process and to further improve our responsible investment practices.
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Going deeper and further
Strategic
Our long-term goals are based on our purpose-driven strategy, which focuses on improving the impact of all assets under management. We hope to achieve these by advocating for public policies that align with our values and by using specific measures (called KPIs) to ensure that we add value in everything we do.
| Ambition | 2022 assessment based on key performance indictors (KPIs) |
| Our net-zero ambition by 2040 | Tentatively on track Comment on progress – Public advocacy, robust emissions measurement methodology, increased emissions coverage, lower emissions than respective benchmarks, net-zero pathways with time-bound ambitions for listed portfolios, and detailed climate policy and handbook. |
|---|---|
| Increase the allocation to investments that ‘benefit stakeholders’ and ‘contribute to solutions’ to 25% by 2025. | Partly on track Comment on progress – each asset class team added new sustainable funds despite the challenging market environment. We hope to accelerate allocations by constantly enhancing our RI roadmap and processes, at the same time we recognise to balance efforts with protecting and growing clients’ capital. |
| Decrease allocation to funds that ‘may or do cause harm’ to no more than 5% by 2025. | Partly on track Comment on progress – Given the challenging market environment in 2022, our asset class teams increased allocations to passive funds which do not score on the IMP methodology. A restructure of our asset base also impacted the overall scores. |
Process
We consider the double materiality of investments at Anthos, with our ESG and impact scorecard the key tool for measurement and engagement.
Increasingly, we are using datasets to help map investments to the well-recognised Sustainable Development Goals (SDGs).
| Ambition | 2022 assessment based on key performance indictors (KPIs) |
| All funds assessed pre-investment with our ESG and impact scorecard | Achieved Comment on progress – ESG and impact topics are considered and documented in our due diligence memo pre-investments. In 2023, we are enhancing our process to use the full scorecard for due diligence. |
|---|---|
| Annually, all relevant funds monitored and/or engaged on improving their ESG integration and impact | Achieved Comment on progress – Of the engagement plans we conducted in 2022, 100% were monitored/engaged with for all asset classes save for private equity which saw 98% of funds monitored/engaged with. |
| Measure impact alignment to the SDGs across all asset classes and report impact performance by 2025 | On track Comment on progress – In 2022, we joined specialised SDG-aligned data platform, the SDI AOP, and began to measure equities and fixed income vs SDGs. We hope to roll this out to all asset classes in the coming years. |
Basics
Exclusions of undesirable companies or industries that don’t align with our values, continuous learning for our staff, and achieving the highest score in ESG integration from the Principles for Responsible Investment (PRI) fall into this category. These are the basics for creating a solid approach to implementing our values.
| Ambition | 2022 assessment based on key performance indictors (KPIs) |
| No more than 5% exposure to issuers on Anthos' exclusions list | Achieved Comment on progress – Well below the target. |
|---|---|
| 100% staff trained on responsible investment topics annually | Achieved Comment on progress – 100% staff trained on climate, whilst significant proportion trained on human rights. |
| PRI assessment | Delayed Comment on progress – A good way to assess the effectiveness of an asset manager's responsible investment practices, is the evaluation through the PRI assessment. However, the assessment score will not be available for 2022 as the PRI has temporarily suspended reporting. We are eagerly anticipating the next assessment in 2023, as we use it to identify any gaps in our current process and to further improve our responsible investment practices. |
How to read this chart
We introduced our ESG scorecard in 2020. 75% is an estimated number of the managers we mapped, due to there not being a formal procedure in place to track this until 2021.
The remaining assets were either not scored, or not applicable to scoring.
How to read this chart
The remaining 4% of assets in 2022 are not applicable to scoring,
which includes legacy assets and direct bonds.
How to read this chart
We introduced official engagement plans for each asset class team in 2022, which relate to the most material managers within the portfolios, and successfully engaged with the majority of them across asset classes. Previous engagements did take place, but did not follow a formal structure and were not tracked so we have left them out.