RIT Capital Partners | ESG

Preface

JRCM’s Responsible Investment Framework summarises the alignment between the RIT Group’s Corporate Objective of “delivering long-term capital growth, while preserving shareholders’ capital…” with a commitment to principles of responsible investment.[1]

JRCM’s Responsible Investment Policy sets out in greater detail how we implement this Framework throughout our investment activities and in the day-to-day running of our Firm.

JRCM’s Responsible Investment Framework

1. Introduction

As a global investment manager with a rich history and trusted brand, we are committed to the integration of environmental, social and governance (ESG) considerations across our investment analysis, our investment management, active ownership and internal operations. Such integration requires us to be forward looking and long term – two characteristics which have always been at the heart of our approach as a Group.  

Protecting and enhancing shareholders’ wealth reflects our investment values and our financial goals. Our Responsible Investment Framework sets out how ESG factors sit alongside traditional financial measures to provide a holistic view of the value, risk and return potential of an investment. Together with this, we have an equal commitment to ensuring that we apply principles of ESG to JRCM’s internal operations including to our environmental and societal impact, as well as our overall corporate governance and culture.

2. Our Central Principles

There are three reasons why the integration of ESG factors are an important part of JRCM’s fundamental approach and they are expressed in our central Principles of Responsible Investment as shown below:

3. Quality

We are committed to high-quality investments. We focus on businesses and external managers with solid business models, strong management and culture, and a commitment to the long term. In short, we are looking for counterparties with strong credentials.

In this way, we believe our investment philosophy is strongly compatible with the core tenets of responsible investment. We substantiated this belief by becoming a signatory to the UN Principles for Responsible Investment (UN PRI) in February 2021.

4. Investment Process

As long-term investors, we are committed to a deep understanding and application of the sustainable drivers of investment performance. To that end, ESG factors have naturally become for JRCM a vital part of our investment decision-making process and our responsibility to RIT as an active owner.

We continue to strengthen the integration of sustainable investment principles into our decision-making processes. When considering investments, we combine traditional investment analysis together with ESG factors which may meaningfully affect the viability of the investment, and hence the long-term sustainable returns for our shareholders. This process tends to give us a more complete view of an investment. We believe that carefully integrating the analysis of ESG factors in the investment process helps to deliver enhanced risk-adjusted returns over the long term. This integrated approach is evidenced in our investment analysis, investment management and active ownership. 

Our investment approach is flexible, by design – we are not artificially restricted to any specific asset class, sector or category. But at the same time, we are highly selective in our approach. We only invest in businesses and/or managers that we believe in, whose aims and approaches we understand and respect. Above all we invest only in companies which align with our Corporate Objective.

5. Governance

We look for investment opportunities where the potential returns align with high standards of business conduct, risk management, independence of governance, and transparency. We have learned over decades of investing that where these standards are high, our investments will represent the quality and respectability we seek.

In our view, and in our experience, such high standards are fundamental to enabling sustainable outcomes and performance. Where boards and management are willing to be held accountable for conscientious strategy and execution, they are more likely to deliver long-term value to investors and to society at large.

6. Relationships

Our investment approach depends on strong, deep and transparent relationships with our investee companies and our external managers. We do not dictate to our investees how to run their businesses, but rather we maintain continual and meaningful interaction. In this way, we develop and sustain full confidence in their values, their aims and strategies. This long-established, open and frank dialogue with our managers gives substance to our exclusive focus on quality investments. Our shareholders in turn trust us to maintain these relationships so that they can be confident in the security, sustainability and value of their investments.

7. Values and Culture

Our values underpin the strategy, shape our culture, and help achieve our purpose. They are based on three mutually supporting pillars of respect, dignity and integrity and are expressed in the Group’s interactions with employees, shareholders, investees, and all stakeholders alike.

These values are powerfully expressed in our approach to our team. We strive to recruit and retain women and men of good character and a commitment to the dignity of the workplace. We encourage the development of an engaged, talented and respectful workforce committed to achieving the Corporate Objective in a responsible fashion. This approach is embedded within each individuals’ goals and are reviewed twice a year.

[1] Such alignment also takes account of RIT’s published Investment Policy “To invest in a widely diversified international portfolio across a range of asset classes both quoted and unquoted; to allocate part of the portfolio to exceptional managers in order to ensure access to the best external talent available.”

Please find attached our full Responsible Investment Framework & Policy.