Mercantile Investment Trust | ESG

Our Manager, JPMorgan Asset Management (‘JPMAM’), has worked hard over a number of years to demonstrate effective ESG integration in its investment processes, not just in the equity funds it manages (which includes the Company), but across all asset classes including Fixed Income, Real Assets, Alternatives and Multi-Asset Solutions, with approaches which have been vetted for effectiveness by a central Sustainable Investing Oversight Committee. 

In actively managed strategies deemed by JPMAM to be ESG integrated, it systematically assesses financially material ESG factors (amongst other factors) in its investment analysis and investment decisions, where possible and appropriate, with the goals of managing risk and improving long-term returns. Essentially, JPMAM seeks to determine whether, in its opinion, a company faces potential headwinds or tailwinds from  ESG considerations which may ultimately have a significant impact on its share price.

ESG integration does not change the Company’s investment objective, exclude specific types of companies, or constrain the Company’s investable universe. However, JPMAM’s assessment of financially material ESG factors may influence its investment decision. Ultimately, it may impact the decision to purchase a stock or not, or a stock’s position size due to the Portfolio Managers’ level of conviction.

The Company seeks to act as a responsible and engaged shareholder of businesses on behalf of its shareholders, through its Manager. JPMAM engages with all companies owned in the Company’s portfolio on a regular basis, often several times in the course of a year. JPMAM does this not just to further its understanding of businesses, but to convey to management any concerns, suggestions or opinions that it has. Ongoing, meaningful, dialogue with the management of companies is fundamental to JPMAM’s investment process. Alongside this direct engagement, JPMAM seeks to vote at all the meetings called by portfolio companies.