RESPONSIBLE INVESTING

At Coutts, we invest with purpose and integrity, and with a keen focus on sustainability. The asset classes and funds we select on your behalf are scrutinised to ensure the companies involved act in a way that protects the environment and the people they work with, without negatively impacting returns.
 

 

RESPONSIBLE INVESTING

At Coutts, we invest with purpose and integrity, and with a keen focus on sustainability. The shares and funds we select on your behalf are scrutinised to ensure the companies involved are acting in a way that protects the environment and the people they work with.

 

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WHAT IS RESPONSIBLE INVESTING?

Responsible investors essentially take responsibility for the impact that the companies they invest in have on the world. This covers three categories of company behaviour, known as ESG:

  • Environmental – the impact a company has on the environment. 
  • Social - the impact a company has on society. 
  • Governance - the impact a company has on the business environment. 

At Coutts, we expect the companies we invest in to have strategies in place to deal with these issues. 
 

OUR ESG APPROACH


FIGHTING CLIMATE CHANGE

At Coutts we believe climate change poses as much of a risk to the global financial system as it does to the environment. And dealing with it is urgent. With that in mind, we carefully consider climate change risks at every step of our investment process as we aim to help preserve our clients’ portfolios and funds, and aid the move towards a zero-carbon economy.

Our aim is to invest in companies or funds that are resilient in the face of environmental risks and, where possible, contribute to a lower-carbon economy.



 

COUTTS AND CLIMATE CHANGE

 

1210983153


WHAT IS RESPONSIBLE INVESTING?

Responsible investors essentially take responsibility for the impact that the companies they invest in have on the world. This covers three categories of company behaviour, known as ESG:

  • Environmental – the impact a company has on the environment. 
  • Social - the impact a company has on society. 
  • Governance - the impact a company has on the business environment. 

At Coutts, we expect the companies we invest in to have strategies in place to deal with these issues. 
 

OUR ESG APPROACH

 


FIGHTING CLIMATE CHANGE

At Coutts we believe climate change poses as much of a risk to the global financial system as it does to the environment. And dealing with it is urgent. With that in mind, we carefully consider climate change risks at every step of our investment process as we aim to help preserve our clients’ portfolios and funds, and aid the move towards a zero-carbon economy.

Our aim is to invest in companies or funds that are resilient in the face of environmental risks and, where possible, contribute to a lower-carbon economy.
 

COUTTS AND CLIMATE CHANGE

 

REASONS TO BE A RESPONSIBLE INVESTOR

We all know having a sustainable approach to investing is important because it can build a better, more resilient world – and who doesn’t want that? But here are five more specific reasons why investing with Coutts matters.

1. You can help disrupt industries for the better

Companies across the globe are making very real, positive changes because of investor engagement.

2. You can support investment in responsible companies

Any major change in society can lead to opportunities for investors. At Coutts, we’re always looking for cases where positive environmental, social and governance (ESG) characteristics form part of a company’s investment case.
 

3. We can adapt quickly when the rules change

With these issues discussed everywhere from Westminster to the World Economic Forum, it’s only a matter of time before regulators start formalising rules to ensure businesses do what’s required. At Coutts, we believe we'll be well-placed if the authorities harden their stance.
 

4. It helps you preserve your wealth long term

Numerous studies show a strong link between responsible investing and investment performance. This makes sense because businesses that take ESG matters seriously can reduce risk and maximise opportunities by creating new ways to operate.
 

5. You know your bank cares about the future

At Coutts we know that preserving and growing our clients’ wealth is not enough – we need to help create a better future for them to enjoy that wealth in.

 

When investing, the value of your investments, and the income you receive from them, can go down as well as up and you may not get back as much as you invested.

What we're doing to help


Three key ways we make a difference

 

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REDUCING THE CARBON FOOTPRINT OF YOUR INVESTMENTS
 

While our portfolios and funds don’t directly emit carbon, the companies we invest in on our clients’ behalf do. It’s up to us to manage this as effectively as possible and help our clients reduce their carbon footprint.

Against that backdrop, we’ve set two targets to reduce our carbon emissions in our discretionary portfolios and online funds:

  • 25% reduction on equity holdings by end 2021
  • 50% reduction on all holdings by end 2030, aligned with the Paris Agreement

We’ve already reduced the carbon intensity in our Personal Portfolio Funds by 20-30% through shifting allocations to funds with a low carbon designation, while minimising the impact on risk and return.

We measure carbon emissions as ‘carbon intensity’, which covers the amount of CO2 a company emits per million dollars of sales.
 

TACKLING CLIMATE IN YOUR INVESTMENTS

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EXCLUDING HIGH IMPACT
FOSSIL FUELS

 

We’ve decided to exclude certain types of company from our investments based on the harm they cause to the environment. We won't invest in any company that exceeds our criteria on the amount of revenue it derives from:

  • Thermal coal extraction for coal mining and exploration
  • Thermal coal generation, including utilities that own or operate coal-fired power plants
  • Involvement in tar sands–a mixture of clay, sand, water and bitumen that are mined and refined into oil
  • Arctic oil and gas exploration–this is evaluated based on whether a company holds at least one licence or permit for drilling or exploring the Arctic offshore region

In addition to the activity described above, we also actively use the voting rights we have as shareholders and engage with the companies we invest in with support from EOS at Federated Hermes.

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VOTING AND
ENGAGEMENT

 

We believe voting and engagement is an effective way for shareholders to bring about positive change in a business and enhance long-term financial performance. We identify which areas to focus on in our own voting and engagement through a detailed review of our holdings. These reviews adopt a risk-based approach, including looking at the relative risk and size of our holding in a company, so that we can prioritise. This is done privately with support from EOS at Federated Hermes, as we believe it’s more effective than public engagement.









 

OUR VOTING & ENGAGEMENT ACTIVITY

1167798576


REDUCING THE CARBON FOOTPRINT OF YOUR INVESTMENTS

 

While our portfolios and funds don’t directly emit carbon, the companies we invest in on our clients’ behalf do. It’s up to us to manage this as effectively as possible and help our clients reduce their carbon footprint.

Against that backdrop, we’ve set two targets to reduce our carbon emissions in our discretionary portfolios and online funds:

  • 25% reduction on equity holdings by end 2021
  • 50% reduction on all holdings by end 2030, aligned with the Paris Agreement

We’ve already reduced the carbon intensity in our Personal Portfolio Funds by 20-30% through shifting allocations to funds with a low carbon designation, while minimising the impact on risk and return.

We measure carbon emissions as ‘carbon intensity’, which covers the amount of CO2 a company emits per million dollars of sales.
 

TACKLING CLIMATE IN YOUR INVESTMENTS

1180494132


EXCLUDING HIGH IMPACT
FOSSIL FUELS

 

We’ve decided to exclude certain types of company from our investments based on the harm they cause to the environment. We will not invest in any company that exceeds our criteria on the amount of revenue it derives from:

  • Thermal coal extraction for coal mining and exploration
  • Thermal coal generation, including utilities that own or operate coal-fired power plants
  • Involvement in tar sands–a mixture of clay, sand, water and bitumen that are mined and refined into oil
  • Arctic oil and gas exploration–this is evaluated based on whether a company holds at least one licence or permit for drilling or exploring the Arctic offshore region

In addition to the activity described above, we also actively use the voting rights we have as shareholders and engage with the companies we invest in with support from EOS at Federated Hermes.

465871739


VOTING AND
ENGAGEMENT

 

We believe voting and engagement is an effective way for shareholders to bring about positive change in a business and enhance long-term financial performance. We identify which areas to focus on in our own voting and engagement through a detailed review of our holdings. These reviews adopt a risk-based approach, including looking at the relative risk and size of our holding in a company, so that we can prioritise. This is done privately with support from EOS at Federated Hermes, as we believe it’s more effective than public engagement.
 

OUR VOTING & ENGAGEMENT ACTIVITY

 

OUR PRINCIPLES AND POLICIES

Find out more about our approach to responsible investing, tackling climate change, voting and engagement, and exclusions.

 

Disclosures and policies

 

OUR PARTNERS

We understand that sustainability is a shared responsibility.

This is why we work with the world’s leading ESG groups to help improve the world we live in.

 

  • Who are they?

    A UN-backed initiative working to create a sustainable financial system and understand the investment implications of ESG factors. The PRI supports an international network of investors who have signed up to the scheme.
     

    How we work together

    Having signed up to the scheme, we are publicly showing our commitment to responsible investing. We report on how we incorporate factors such as environmental and social issues into our investment process every year, and this is independently evaluated by the PRI. This means we can be confident that our responsible investment practices are market-leading. At the same time, we attend the PRI’s industry events to deepen our expertise and work with other, like-minded investors to share best practice.

  • Who are they?

    A global body with the world’s biggest corporate greenhouse gas emitters firmly in its sights. It works with investors to ensure the relevant companies take appropriate action to tackle climate change.

     

    How we work together

    As an investor that has signed up to the initiative, Coutts actively engages with companies we invest in to ensure they’re tackling climate change. For example, working alongside a large US pension fund, we’re liaising with a leading aerospace company to ensure they produce a plan of action on climate change and means to report progress.

  • Who are they?

    A stewardship service provider enabling institutional investors to have a more open conversation with companies on ESG issues. They say this approach is essential to building a global financial system that provides better long-term returns for clients, and a more sustainable society.

     

    How we work together

    EOS is our voting and engagement partner. This means that, where we invest directly in companies, they vote at annual shareholder meetings in line with our responsible investing policy. They will also engage with these companies on our behalf to drive long-lasting change that delivers financial and social value.

  • What is it?

    Launched by the Financial Reporting Council (FRC), it’s a set of standards aimed at UK institutional investors. The code focuses on the responsible allocation, management and oversight of capital, with the goal of creating sustainable benefits for the economy, environment and society.
     

    How we work together

    The UK Stewardship Code guides the way we manage wealth, ensuring that our actions can deliver sustainable benefits to our clients and society. We publish our compliance statement to the code which sets out all the ways we act as a proper steward. This ranges from voting and engaging with the companies we invest in, to correctly managing conflicts of interest and incorporating ESG factors into our investment decisions.

  • What is it?


    The Task Force on Climate-Related Financial Disclosures (TCFD) is one of the most widely used and recognised sets of guidance for companies when reporting their climate-related risks. Its goal is to improve transparency around how companies and financial institutions, like Coutts, consider the risks and opportunities associated with climate change.

     

    How we work together

    We use the TCFD voluntary disclosures when reporting our own climate-related risks, because we are committed to communicating our progress on tackling climate change as transparently as possible. We see two great benefits of using the TCFD disclosures. Firstly, it means that institutions worldwide are reporting on the risks related to climate change in a similar way, making it easier to compare and learn from each other. And secondly, reporting on climate change helps us identify our strengths and informs the way we develop our investment strategy in the future.
     

    TCFD statement


“Climate change is an urgent priority – for our clients, for the companies we invest in, and for society. As long-term investors we believe these companies must have credible strategies that address its impact.”

 

LESLIE GENT, HEAD OF RESPONSIBLE INVESTING, COUTTS

 


When investing, the value of your investments, and the income you receive from them, can go down as well as up and you may not get back as much as you invested.



When investing, the value of your investments, and the income you receive from them, can go down as well as up and you may not get back as much as you invested.

News & Insights

  • Coutts Investment Outlook 2021 | Coutts Private Bank

    • Investments
    15 Jan 2021
    The coronavirus pandemic has accelerated trends that were emerging slowly before the outbreak and the UK has begun a new relationship with Europe. We’re positioning our clients’ investments for a recovery, but anyone expecting a simplistic ‘back to normal’ in 2021 could be caught flatfooted.
  • Being Responsible on Purpose

    • Markets
    • Investment
    • Economy
    • Business
    • Investments
    • Politics
    27 Nov 2020
    Our latest quarterly report on responsible investing highlights something that’s become vital for businesses to define – their purpose.
  • Cutting our carbon footprint for clients

    • Innovation
    • United Kingdom
    • Environment
    • Coutts Invest
    • Investment
    • London
    • Tailored Portfolio Service
    • Investments
    • Sustainability
    • Energy
    15 Oct 2020
    We’ve made good progress reducing CO2 emissions from our client funds and portfolios

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