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What is the fund?

 

The fund

The aim

A high conviction portfolio that aims to deliver growth in both income and capital over rolling five-year periods, whilst delivering a yield higher than that of the MSCI World Index and maintaining an MSCI ESG rating of AA or AAA.
 

Dividend investing

We prefer our companies to offer attractive dividend growth rather than a high dividend yield. The ideal dividend company can maintain their asset bases, reinvest in growth opportunities and pay dividends without excessive financial leverage or compromising their allocation of capital. Our dividend analysis therefore focuses on financial leverage and liquidity to help us identify the threats to future cash flows and dividend sustainability. Our dividend stress test highlights what scenarios  might put the dividend at risk helping us identify companies that cannot afford their dividend.
 

Sustainable credentials

We focus on companies with strong sustainable credentials that are driving, facilitating, and promoting positive change – directly or indirectly – across a broad range of areas, from energy wastage, building emissions and power management to food waste, sustainable food diets and raw material depletion. Our proprietary Sustainability Scorecard forms the first part of our company analysis. If a company scores negatively we will not proceed with our research analysis. In addition, we exclude companies that derive more than 10% of revenues from the production or sale of tobacco, alcohol and weapons; adult entertainment; fossil fuel extraction and the provision of gambling services. The fund will maintain an MSCI ESG rating of AA or above and is an Article 8 fund under SFDR.

Meet the Sanlam Sustainable Global Equities Team

Mark Whitehead
Mark Whitehead
Fund Manager
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Alan Porter
Alan Porter
Fund Manager
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Eva Kubicka, CFA
Eva Kubicka, CFA
Investment Analyst
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Why invest in the fund?

  • Our dividend investing credentials - We aim to yield above the MSCI World Index and deliver real dividend growth each year
  • Our sustainability credentials - Sustainability analysis is the first part of our research process. We do not invest in companies that fail our proprietary sustainability analysis. The fund will maintain an MSCI ESG rating of AA or above and is an Article 8 fund under SFDR.
  • Global diversification - We invest globally allowing us to choose the best sustainable global dividend companies wherever they are listed
  • High conviction, low turnover, low cost
  • Robust and repeatable investment process


 
  • Investors are seeking attractive returns from global equities. They are also increasingly conscious of their environmental and social responsibilities.
  • We aim to offer investors superior returns by investing in dividend growth companies with proven sustainability credentials.
  • That is why we are introducing the Sanlam Sustainable Global Dividend Fund.

Our sustainability approach

We believe that to be credible in this space the following are key:
  • Sustainability analysis should be fully integrated in the research process
  • Exclusions and the use of sustainability analysis to rule out stocks from the fund
  • Demonstrating engagement and positive improvement
  • Independent validation of sustainability credentials.

 Our credible approach:
  • Sustainability analysis is the first part of our analysis on each company
  • We exclude several areas of the market and will not purchase companies that score negatively on our sustainability scorecard
  • Engagement is a key part of our approach
  • The fund is an Article 8 fund under SFDR. The fund must always maintain an MSCI ESG AA or AAA rating.
 

 


 

Our sustainability credentials

We believe sustainable dividend investing leads to better outcomes for all stakeholders.

Mark Whitehead, Fund Manager
Sense and sustainability

A multitude of factors contribute to producing a more sustainable planet. Here we identify a selection of core issues and the companies we invest in to help address them for the better.

Problem: how to make energy management more efficient and resilient to help reduce waste and accelerate the journey to net-zero carbon emissions.

Solution: Schneider’s EcoStruxure platform collects and analyses data and allows smart devices to make control decisions in buildings, plant and machines and on electricity grids. This technology allows customers to maximize energy efficiency and sustainability in their operations.

Sustainability credentials: Schneider has been ranked on the CDP “A-List” for 9 consecutive years thanks for its actions in cutting emissions, mitigating climate risks and contributing to the development of a low-carbon economy.
Problem: as electricity demand increases thank to 5G communication networks, data centres, electric vehicles etc the need for more sustainable solutions that consume less energy has been growing across all applications.

Solution: Analog Devices’ power semiconductors are central to this goal. Innovations around higher efficiency, smaller size, lower noise and better system intelligence will enable a more sustainable future. Power semiconductors can allow systems designers better control over power systems and help drive peak efficiency.

Sustainability credentials: Analog Devices is aiming for carbon neutrality by 2030 and expects its manufacturing sites to be using 100% renewable energy by 2025.
Problem: buildings consume >30% of the world’s energy and will be a key driver behind increased electricity consumption going forward. They are also a major contributor to CO2 emissions.

Solution: Eaton is focused on making electricity power work safely, efficiently, reliably and sustainably. Eaton’s “Buildings as a Grid” infrastructure combines local power generation, energy storage and intelligent control to allow customers to leverage existing energy infrastructure with a modular approach that can scale to meet changing energy needs. This will allow building owners to optimize their energy use, maximise their renewable energy consumption and sell excess energy back to the local utility.

Sustainability credentials: Eaton aim to cut their own carbon emissions by at least 50% by 2030 and achieve carbon neutrality at the same time. These targets have been approved by the Science Based Target Initiative (SBTi).
 
Problem: around one-third of the world’s food is lost or wasted during production or consumption. If food waste were a country it would be the third largest emitter of global greenhouse gas emissions worldwide, behind the United States and China.

Solutions: DSM offers multiple solutions to the food waste issue. Their “Pack-Age” cheese ripening product is moisture-permeable, breathable membrane that eliminates the need for an inedible crust. This avoids up to 10% of the cheese being lost and the increased packaging efficiency lowers the carbon footprint of cheese production. DSM’s antioxidants like vitamins C and E slow down the oxidation processes and extends the shelf-life and thus food spoilage of many foodstuffs. DSM’s “Hy-D” feed solution for poultry improves bird health and bone strength, including eggshells. This means fewer eggs being broken and thus wasted.

Sustainability credentials: DSM take sustainability so seriously that their business strategy is based in the Sustainable Development Goals (SDGs) agreed by the United Nations. DSM are proud that their name has assumed a new meaning in recent years: Doing Something Meaningful.
 

Problem: the consumer desire for natural ingredients can have the unintended consequence of depleting important natural resources.

Solution: IFF uses green chemistry to find novel waste-reduction methods and biotechnical innovations to create natural products from abundant raw materials, rather than deplete important resources such as food. One example is their terpene-based chemistry which utilizes a pine-based side product from the paper industry to create high-performance fragrance ingredients.

Sustainability credentials: IFF have Science Bases Targets initiative approved goals to reduce their absolute greenhouse gas emissions by 30% by 2025 (versus 2015 levels). They also have a Scope 3 goal to get their legacy suppliers representing 70% of their supply chain emissions to set targets and report annual emissions by 2025.
Problem: carbon-emission light companies such as consulting companies typically have low carbon footprints but should nonetheless play a role in environmental sustainability.

Solution: In January 2021 Accenture and Salesforce expanded their alliance to help companies embed sustainability into their business. Combining Accenture’s Sustainability Services, Salesforce Sustainability Cloud and Salesforce Customer 360 will bring sustainability to the front office and provide the C-suite with true visibility into their company’s historical and real-time ESG data. Companies will be able to track, measure and act on a range of sustainability initiatives, including reporting on carbon usage.

Sustainability credentials: Accenture have a 2025 target to reduce scope 1 and 2 greenhouse gas emissions by 65% from a 2016 baseline. They aim to procure 100% renewable energy in all locations by 2023 and by 2025 will require 90% of their key suppliers, representing three-quarters of their scope 3 emissions, to disclose their targets and actions.
 
Problem: banks hold the purse-strings, and many do not align their lending practices with environmental sustainability.

Solution: JP Morgan announced in October 2020 their commitment to align key sectors of their financing portfolio with the goals of the Paris Agreement. This means they are measuring the emissions of key clients in those sectors and setting reduction targets for these sector portfolios. To start they have set target to reduce the carbon intensity in their Oil & Gas, Electric Power and Auto Manufacturing portfolios by 2030.

Sustainability credentials: in addition to the financing actions above JP Morgan are targeting to finance and facilitate more than $2.5 trillion over 10 years to advance climate action and sustainable development.
 
Problem: understanding the carbon properties of 000’s of materials when making decisions on which to use, for example, in building projects.

Solution: in November 2019 Microsoft launched and hosted on Azure, their cloud offering, the free EC3 tool which reveals the embodied carbon in materials so architects, engineers, and contractors can make informed choices, selecting materials with the lowest carbon impact. There are now over 10,000 users of the EC2 tool and it has a global database of carbon data for almost 5,000 individual building products.

Sustainability credentials: Microsoft aim to be carbon negative by 2030 and says by 2050 they will remove from the atmosphere all the carbon dioxide they have emitted since they were founded in 1975.
 

Problem: the heating and cooling of buildings is estimated to contribute around 15% of global greenhouse gas emissions

Solution: Trane Technologies is uniquely positioned with innovative solutions to lead the movement in reducing buildings emissions. Trane have designed an electric unit to heat and cool building with no need for a separate fossil fuel powered boiler. If powered by renewable electricity this is a zero emissions solution.

Sustainability credentials: Trane is the first company in its sector to have their GHG emission targets verified by the Science Based Targets Initiative (SBTi).
Problem: Meeting net zero emission commitments will require ever greater commitments to renewable electricity.
 
Solution: SSE has a vision to be a leading energy company in a net zero world. The company has a science-based 2030 goal to cut by 60% the carbon intensity of electricity generated. SSE’s last coal plant ceased operation on 31st March 2020 and they are investing in new capacity to treble its renewable energy output by 2030 compared to a 2017/18 baseline.
 
Sustainability credentials: on the road to net zero in 2050, SSE has set four interim goals aligned to the UN’s SDGs for 2030. SSE aim to cut their carbon intensity by 60%, treble renewable energy output, help accommodate 10m electric vehicles and champion fair tax and a real living wage.
Problem: plastic pollution in our environment is a serious problem, especially when it ends up in our rivers and oceans.

Solution: Procter & Gamble has two key 2030 packaging design goals. One is to ensure that 100% of their packaging will be recyclable or reusable. An example here is working to move to recyclable formats for flexible films. The second goal is to reduce the use of virgin petroleum plastics in consumer packaging by 50%. Here P&G are continuing to lightweight packaging, increasing the use of recycled content, encouraging consumer conversion to more efficient product forms and where possible using alternative to plastics.

Sustainability credentials: P&G aims to purchase 100% renewable electricity globally and targets its manufacturing facilities to be carbon neutral over 2020-2030.
 
Problem: projections imply that the clothing industry will produce >60% more clothing by 2030 putting additional pressure on natural ecosystems.

Solution: Kering’s products often start on the farms, forests and fields. Examples include wool from the New Zealand highlands, cashmere from Mongolia’s South Gobi and organic cotton from India. Kering has supported the development of a Biodiversity Impact Tool which provides risk screening of potential biodiversity impacts from agricultural production which can, in turn, drive smarter sourcing decisions.

Sustainability credentials: Kering has committed to reduce its absolute GHG emissions in scopes 1 and 2 by 90% by 2030 from a 2015 base year. The company has also committed to increase its annual sourcing of renewable electricity form 25% in 2015 to 100% by 2022.
 
Explore the details
A high conviction portfolio that aims to deliver sustainable income and long-term capital appreciation through investing in dividend paying companies.
Read the latest factsheet

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Fund Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets.

The Fund has holdings which are denominated in currencies other than sterling and may be affected by movements in exchange rates. Consequently the value of an investment may rise or fall in line with the exchange rates.

Deemed authorised and regulated by the Financial Conduct Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website. (Notes 1, 3 and 4).

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