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Coutts makes the grade for responsible investing

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Summary

Bank achieves strong scores in UN-backed, independent assessment.

1 min read

Our drive to deliver sustainable returns for clients has led to impressive scores in an assessment by the world’s top responsible investment body.

 

Coutts achieved an ‘A’ grade or above in each of the key categories except one, and achieved the highest possible rating for its strategy and governance. The results are particularly encouraging as we chose to put our practices under the microscope a year sooner than necessary.

Head of asset management at Coutts, Mohammad Syed, says, “It’s especially pleasing that our commitment to responsible investing is paying off today, and our belief is that it will pay off for our clients long into the future. With our investment performance also remaining strong across all profiles over three and five years, the case for investing with Coutts remains compelling.”

As always, you must remember that there are no guarantees when investing and your capital is at risk.

 

THE GLOBAL LEADER FOR RESPONSIBLE INVESTING

The assessment was carried out by the Principles for Responsible Investment (PRI), the world’s leading organisation in this field. Supported by, but not part of, the United Nations, it encourages investors to use responsible investment to enhance returns and better manage risks.

Coutts signed up to it last year as part of our commitment to embedding responsible investing into our day-to-day processes and philosophy. As a signatory, we are obliged to undertake an independent, formal assessment each year. The first year, however, is usually seen as a ‘grace period’ for new members, but we volunteered to be assessed straight away.

Leslie Gent, Coutts head of responsible investing, explains, “We decided to go for an assessment in our first year because we believe it’s always best to be proactive in identifying where we’re doing well and where we need to improve. It is crucial that we get this right and very encouraging to see our work validated at the highest level.”

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“It’s especially pleasing that our commitment to responsible investing is paying off today, and our belief is that it will pay off for our clients long into the future.”
Mohammad Syed, Head of Asset Management

Responsible investing typically covers three main areas, underpinning how we look at our own practices and those of the companies and funds we invest in. Frequently abbreviated as ‘ESG’, they are:

  • the environment – what impact a company has on the resources that sustain it, either directly or indirectly
  • social factors – how a company interacts with the communities it operates in, for example their approach to workers’ rights or how they treat suppliers
  • governance – how well a company is managed, looking at topics such as transparency of decisions, directors’ pay and internal controls

Leslie says, “There’s increasing research showing that companies which treat these issues seriously can deliver more sustainable returns. That makes it an important part of the investment journey, especially for long-term investors like us.”

 

Our results

Here’s a summary of how we scored in the key categories of the PRI’s assessment. The only rating that is sub-par is for ‘Direct Fixed Income’ where our portfolio allocation predominantly represents UK gilts. We’ll look at how to improve this process in future.

 

Coutts Rating

Median Rating

Strategy & Governance

A+

A

Indirect – Manager Selection, Appointment and Monitoring

Listed Equity

A

A

Fixed Income – Corp Financials

A

B

Fixed Income – Corp Non-Financials

A

B

Direct & Active Ownership

Listed Equity – Incorporation

A

B

Listed Equity – Active Ownership

A

B

Fixed Income – SSA

E

B

Read an interview with our head of responsible investing Leslie Gent and find out more about the bank’s responsible investing approach.

 

When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.

Key Takeaways

Coutts has achieved highly impressive scores in an independent assessment of its responsible investing practices by the world’s top body in this field.

The assessment was conducted by the Principles for Responsible Investment, an independent, UN-supported body that encourages investors to use responsible investing to enhance returns and better manage risks.

We signed up to it last year as part of our commitment to embedding responsible investing into our processes and philosophy. We see this as an important part of our drive to deliver sustainable returns for our clients.

About Coutts Investments

With unstinting focus on client objectives and capital preservation, Coutts Investments provide high-touch investment expertise that centres on diversified solutions and a service-led approach to portfolio management. Our investment process is as disciplined as it is creative – ensuring tailored solutions with robust results.

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