Menhaden Resource Efficiency | ESG

Menhaden Resource Efficiency PLC (the Company) is included in the AIC’s specialist environmental sector and its shares are listed on the main market of the London Stock Exchange (LSE). The management of the Company’s assets (GBP 103m at 31 December 2022) is delegated to our AIFM (Frostrow Capital LLP) and to our portfolio manager (Menhaden Capital Management LLP).

The Board of Menhaden Resource Efficiency PLC believes that the management of financially material environmental, social and governance (ESG) issues are vital for the Company’s success, and aims for these to be integrated in all of its investment policies and processes. We are pleased to disclose that over the last 5 years to 31 December 2022 the Company’s annual compound investment performance was 7.3%.

Our aim is to generate long-term profits for our shareholders by investing in high-quality businesses which have a net positive impact on society and our natural environment. The theme of resource and energy efficiency underpins our whole investment approach, and especially investments that contribute to the circular economy and the transition to a low-carbon world.

Our investment objective is to generate long-term shareholder returns, predominantly in the form of capital growth, by investing in businesses and opportunities that are demonstrably delivering or benefiting significantly from the efficient use of energy and resources, irrespective of their size, location or stage of development.

When identifying suitable opportunities our portfolio manager is committed to and cognisant of the principles embodied in the UK Stewardship Code and UN Principles of Responsible Investment. They invest with a long-term perspective and with high conviction into a portfolio of 15-30 positions and aim to have a low portfolio turnover.

When making investments our portfolio manager uses a 6 R’s resource efficiency framework (Redesign, Reduce, Reuse, Recycle, Repurpose, Report) as well as financial criteria. By taking this approach we invest in companies facilitating the transition to a more energy and resource-efficient economy. Companies that help society do more with less and protect our finite natural resources.

The Company does not have an ethical investment (exclusions) policy because businesses in the “sin” sectors (such as pornography, alcohol, tobacco, animal testing, child labour, armaments) are unlikely to ever meet our efficient use of energy and resources investment criteria. 

We delegate asset stewardship to our investment portfolio manager. They undertake engagements with investee companies and proxy voting on behalf of the Company.

In 2021 they began an organised programme of engagement to move the portfolio’s holdings forward on environmental reporting and target setting. This engagement continued through 2022 and by the year end over half of the listed holdings in the portfolio had near-term emissions reduction targets independently validated by the Science Based Targets initiative (“SBTi”), meaning they have a clearly defined pathway to reduce their GHG emissions in line with the goals of the Paris Agreement.

Our portfolio manager is an investor signatory to CDP (Carbon Disclosure Project) and member of the FAIRR investor network, which is helping promote greener practices in global agriculture.

As long-term investors, we also believe that mitigating environmental risks involves an active approach to the preservation of biodiversity and we are proud that our portfolio manager is a signatory of the Financial Sector Commitment Letter on Eliminating Commodity Driven Deforestation.

The Company integrates its environmental impact reporting within its annual report and financial statements.  The impact report is also made available as a separate document including the methodological detail on our website www.menhaden.com. 

Our 2022 Impact Statement shows the company’s holdings helped generate 87.6 MWh of electricity in 2022, enough to charge 4.6 million smart phones, and save 2,233 tonnes of CO2e emissions.

We support the UN Sustainable Development Goals (SDGs) and our investments contribute to the challenge of achieving at least six SDGs.

For more detail on all the above please see the Menhaden Resource Efficiency PLC Annual Impact Reports 2016 to 2022, which can be accessed by clicking on the useful link button.

The latest Menhaden Resource Efficiency PLC professional investor presentation slide deck can be obtained on request by emailing [email protected]