Baillie Gifford UK Growth | ESG

The Company believes that it is in the shareholders’ interests to consider environmental, social and governance (ESG) factors when selecting and retaining investments and has asked the Managers (Baillie Gifford & Co Limited as AIFM and Baillie Gifford & Co as portfolio manager) to take these issues into account.

The Managers’ approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment.

Whilst consideration is given to sustainability matters, there are no restrictions on the investment universe of the Company, unless otherwise stated within in its Objective & Policy. Baillie Gifford & Co can invest in any companies it believes could create beneficial long-term returns for investors. However, this might result in investments being made in companies that ultimately cause a negative outcome for the environment or society.

More detail on Baillie Gifford’s approach to sustainability can be found in its Our Stewardship Principles and Guidelines document.

Baillie Gifford is a signatory to the United Nations Principles for Responsible Investment and the Carbon Disclosure Project and is also a member of the International Corporate Governance Network. Baillie Gifford also became a supporter of the Taskforce on Climate-related Financial Disclosures (‘TCFD’) in May 2020 and its latest firm-wide TCFD-aligned report is to the year ended 31 December 2023. The Company's own TCFD report can be found on the Company's webpage of the Managers' website. It explains the managers’ approach to addressing climate-related risks and opportunities through the investment process and describes a current view of how they may impact the portfolio. It also includes data and metrics to provide useful additional information. The Company's Managers have outlined in the Statement of Climate-Related Intent and Ambition their commitment in relation to the investments they make for clients and their commitment to reducing emissions in their firmwide operations.  

Baillie Gifford expects all holdings to operate in accordance with the principles and standards set out in the United Nations Global Compact. When a company’s performance on any material issues is significantly below what is expected, making it a material risk to the long-term performance of their business, and potentially society as a whole, the investment managers will engage with management with the aim of improving the relevant policies and management systems.

The Company considers that it does not fall within the scope of the Modern Slavery Act 2015 (‘Act’) and it is not, therefore, obliged to make a slavery and human trafficking statement. In any event, the Company considers its supply chains to be of low risk as its suppliers are typically professional advisers. A statement by the Managers under the Act has been published on the Managers’ website.

[H]aving regard to the Company being an externally-managed investment company with no employees, the Board considers that the Company’s key stakeholders are its existing and potential new shareholders, its externally-appointed managers (Baillie Gifford) and other professional service providers (corporate broker, registrar, auditor and depositary), lenders, wider society and the environment.

Baillie Gifford believes that it has a responsibility to behave as supportive and constructively engaged long-term investors. The approach favours a small number of simple principles which help shape interactions with companies: long-term value creation; alignment in vision and practice; governance fit for purpose; and sustainable business practices.

Baillie Gifford also believes that ‘active ownership’ is as important as selecting the right investments in the first instance. Baillie Gifford has adopted a set of guidelines to provide an insight on its approach to voting and engagement. More detail on these guidelines can be found in Baillie Gifford’s Our Stewardship Principles and Guidelines document.

The Company has given discretionary voting powers to Baillie Gifford & Co. which votes against resolutions it considers may damage shareholders’ rights or economic interests and voting is reported on and reviewed at Board meetings. A summary of votes can be found in the Company’s Proxy Voting Disclosure Report.