Active Ownership – your money has a voice
Policy statement for Octopus Money Unit Trust Managers Limited, covering active ownership and shareholder engagement
Our Active Ownership Policy and Responsible Investing Policy establishes our investment approach to integrating financially material Environmental, Social and Governance (ESG) risks and opportunities into stewardship activities and investment decision making .
Remember – ESG investing includes considering important Environmental (the planet), Social (people) and Governance (how companies are run) factors as the companies we invest in are both dependent on and will be affected by these things in making profit.
Our Active Ownership approach
Our approach to active ownership is aligned with our investment beliefs. This approach recognises the importance of active ownership as our voice as investors and as one of the most effective mechanisms in responsible investing.
As investors the rights of ownership provide the opportunity to influence the companies we invest in. Owning shares means being a shareholder, so you can engage and vote on important issues which can relate to sustainability (people and the planet) or governance (how companies are being run). Investing in other investments such as bonds provides the right to engage with companies on these issues.
As responsible investors we aim to remain broadly invested across different types of companies, industries and regions. Being an active owner is important because there are issues such as climate change, biodiversity loss and human rights which affect the entire economic system and can not be diversified. Investors can work together to influence companies, policy makers and governments towards better management of these issues and investing in a way that supports building a more sustainable world for the future.
Our approach reflects the opportunities we have to influence through stewardship activities (as stewards looking to provide the best long-term financial outcome for investors) such as engagement, voting and advocacy. We work with expert partners, Aberdeen as our Investment Adviser who manage our funds aligned to our responsible investing approach. Aberdeen carry out stewardship activities on our behalf for our directly invested funds (Octopus UK Index Tracker, Octopus Climate Change Fund and Octopus Bond Fund) and for Aberdeen funds invested in by our funds of funds (Octopus Defensive Fund, Octopus Global Fund, Octopus Growth Fund 1, Octopus Growth Fund 2 and Octopus Growth Fund 3). Our funds of funds also invest in other Investment Manager funds, who carry out stewardship activities on our behalf. It is important that we have oversight of both Aberdeen and other Investment Managers to ensure that they are using our rights of ownership aligned to our policies and guidelines.
As a signatory of the United Nations (UN) Principles for Responsible Investment (PRI) we support the aims of the UN PRI to promote long-term financial performance as dependent on healthy economic, social and environmental systems in which companies operate. The UN PRI promotes working on collective goals and the delivery of positive real-world outcomes through enhanced collaboration among investors.
Our responsible investing policy provides commitment as an investment manger, to integrate financially material ESG risks and opportunities into investment decisions and active ownership.
Active Ownership Policy
Our Active Ownership Policy provides the commitment to build our capacity as stewards of the investments we manage on behalf of our investors.
We work with Aberdeen as our Investment Adviser and other Fund Managers on how they manage our funds in line with our policy framework and guidance, ensuring we can leverage investor influence and support collaborative investor efforts in support of a sustainable future.
Our policy focuses on:
Priority Sustainability and Governance Issues
As an active owner we consider the most financially important sustainability and governance issues as an agenda for investor effort and oversight of stewardship activities
For delegated engagement activities set expectations aligned to our active ownership approach and material issues. Seek to use collaborative engagement and policy advocacy to influence systemic and material issues.
For delegated voting activities set expectations aligned to our active ownership approach and material issues.
Other Important Activities
- Investor Communications – Active ownership is an important lever for responsible investors. The outcomes aren’t always as visible as other responsible investing strategies, so it is important investors understand stewardship efforts as active owners through activities such as engagement, voting and advocacy.
- Conflicts of interest – Conflicts of interest can compromise stewardship activities. It is important that investors have governance in place to identify, disclose, and mitigate these conflicts. Transparency in managing competing interests ensures engagement and voting remains authentic, independent, and aligned with long-term investor returns.
- Stock lending – Stock lending is where an asset owner temporarily transfers their shares or securities to another party for a lending fee. The lender is able to recall shares at any time and the borrower agrees to return the shares at the end of the agreed term. Stock lending is used to generate additional revenue for funds and for borrowers to access shares for short selling or settlement of failed trades. Lending shares has an impact on voting rights, as these are temporarily unavailable and must be able to be recalled to enable voting.