Climate change is transforming the way that investors think about both opportunities and risks at a global level, and there is a palpable sense of alarm as we see the real-world, real-time effects of climate change play out in front of our eyes. With extreme weather events reported regularly in the media, a growing number of individuals are seeking more information about how their money is being invested, and there is growing pressure for the superannuation industry to focus on climate change and a host of other environmental, social and governance (ESG) factors.

While all Australia’s state governments have now pledged to be net zero in terms of greenhouse-gas emissions by 2050, only a relatively small number of super funds have made the same commitment. However, following the deadly wildfires of 2020, there are mounting calls both from environmental activists and from funds’ own members for the retirement industry to take more decisive action.

Recognising the increasing imperative to reflect these concerns in portfolio design, and with the ultimate aim to enhance financial wellbeing, climate change has naturally been a significant area of focus for Newton for some time. A strong foundation of our investment approach is to consider the material ESG issues that affect future business prospects and the pricing of securities. We have been voting our clients’ shares since 1978, and we seek to drive positive change via both bond and equity holdings.

We use a ‘mosaic’ approach to incorporate climate change and broader sustainability issues into the fundamental analysis of the companies we invest in. The concept of ‘non-financial’ information is a misnomer, and it is often this non-accounting information which is critical to making an informed investment decision. We believe the discipline and perspective provided by this ‘mosaic’ approach has helped us to position our Global Dynamic Bond and Sustainable Global Dynamic Bond portfolios effectively.

Important information

This is a financial promotion. These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. This material is for professional investors only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those securities, countries or sectors. Please note that holdings and positioning are subject to change without notice.

Issued by Newton Investment Management Limited, The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England No. 01371973. Newton Investment Management is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN and is a subsidiary of The Bank of New York Mellon Corporation. Newton Investment Management Limited is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. Newton’s investment business is described in Form ADV, Part 1 and 2, which can be obtained from the website or obtained upon request. ‘Newton’ and/or ‘Newton Investment Management’ brand refers to Newton Investment Management Limited.

This material is for Australian wholesale clients and New Zealand wholesale investors only and is not intended for distribution to, nor should it be relied upon by, retail clients. This information has not been prepared to take into account the investment objectives, financial objectives or particular needs of any particular person. Before making an investment decision you should carefully consider, with or without the assistance of a financial adviser, whether such an investment strategy is appropriate in light of your particular investment needs, objectives and financial circumstances.

This information is made available by Newton Investment Management Limited and BNY Mellon Investment Management Australia Ltd (AFSL 227865). This information is confidential and is only provided to Australian wholesale clients (as that term is defined in section 761G of the Corporations Act 2001 (Cth)). This is not an offering or the solicitation of an offer to purchase an interest in the Newton Global Dynamic Bond strategy or the Newton Sustainable Global Dynamic Bond strategy. This document is for general purposes only and should not be relied upon as financial product advice. This document has been prepared without taking into account the objectives, financial situation or needs of any person. Before making an investment decision an investor should consider the appropriateness of the information in this document having regard to these matters and read the disclosure document relating to a financial product. Investors should also consider obtaining independent advice before making any investment decisions. Investments can go up and down and to the extent that this document contains any past performance information, past performance is not a reliable indicator of the future performance of the relevant investment or any similar investment strategy.

Newton Investment Management Limited is exempt from the requirement to hold an Australian financial services licence in respect of the financial services it provides to wholesale clients in Australia and is authorised and regulated by the Financial Conduct Authority of the UK under UK laws, which differ from Australian laws.

Newton Investment Management Limited (Newton) is authorised and regulated in the UK by the Financial Conduct Authority (FCA), 12 Endeavour Square, London, E20 1JN. Newton is providing financial services to wholesale clients in Australia in reliance on ASIC Corporations (Repeal and Transitional) Instrument 2016/396, a copy of which is on the website of the Australian Securities and Investments Commission, The instrument exempts entities that are authorised and regulated in the UK by the FCA, such as Newton, from the need to hold an Australian financial services license under the Corporations Act 2001 for certain financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Newton are regulated by the FCA under the laws and regulatory requirements of the United Kingdom, which are different to the laws applying in Australia. Newton is providing financial services to wholesale investors in New Zealand in reliance on the Safe Harbour regime under the Financial Markets Conduct Act 2013, Schedule 1 part 3.