Sustainable Investing - Partners Capital

Authentic ESG integration helps us to make better investment decisions for our clients. We believe that by assessing our asset managers’ ESG integration approaches, engaging with them to improve their practices and by the deployment of capital into impactful opportunities, we can help to generate better long-term investment outcomes for our clients and have a positive impact on society and the environment.

Partners Capital Sustainability Beliefs

Sustainability starts with the principles we embrace in managing our own firm

Operational carbon net neutrality commitment in 2022
Commitment to reduce travel, efficient energy usage and recycling
Charitable giving and volunteering programme for environmental and social causes

Inclusive workplaces with diverse teams and perspectives make better decisions

CEO Pledge signatory since 2020 to further advance diversity, equity and inclusion
Key Initiatives include: 1) educating employees to build an inclusive workplace; 2) engagement with third-party networks to diversify workforce
Focused effort to source diverse asset managers

Influence on asset managers behaviour represents our largest, leveraged impact

Asset managers with whom we partner manage over $2T in assets, 40x the capital we oversee. Our beliefs are amplified through our partners
Working with these asset managers to implement best practice ESG integration processes can create real impact on our society and environment

Helping our clients implement targeted, bespoke responsible investment policies

Identify sectors, managers and companies capable of generating measurable impact
Raised a dedicated vehicle to invest in private equity opportunities focusing on proven technological innovations and long-established businesses which are critical to the global energy transition to net zero carbon emissions

ESG and Impact Measurement is the key to a virtuous circle of adoption

Built proprietary ESG and Impact measurement dashboard, which has evolved with more sophisticated measurement techniques.
Publish ESG and Impact annual report
Engage with asset managers to encourage greater transparency and consistency in ESG data

Collaboration with like-minded investors has the potential to catalyse change

Partners Capital is the nexus of a powerful ecosystem where advocacy for sustainability can drive meaningful change:

Clients: prestigious charitable educational institutions and influential philanthropic families
Shareholders: Sir Ronald Cohen offers us leading guidance on our sustainability and impact strategies
Asset Managers: partner with premier investment managers
Collaboration Groups: Institutional Investors Group on Climate Change and United Nations-supported Principles for Responsible Investment.

What is ESG?

To fully understand the issues at hand and discuss the state of ESG in today’s world, we must take a step back and start with the basics. Let’s start with the simple question: ‘What is ESG?’ ESG refers to Environmental, Social and Governance factors, which is then abbreviated as ‘ESG’. The term, however, comprises more than just three loosely defined themes. ESG is much more granular than these three themes – there is a multitude of “sub-themes” underneath each of the environmental, social and governance concepts, as shown in the categories here. This list is by no means exhaustive but it includes, in our view, the most referenced and essential ESG issues.

Environmental

Social

Governance

Our Policy includes five pillars:

Assessment

Engagement

Capital Allocation

Exclusions

Advocacy and Social Responsibility

Assessment

We assess the ESG integration and stewardship approaches of the asset managers with whom we partner through our ongoing communications and monitoring which is augmented by our annual Asset Manager Survey.

Engagement

We seek to constructively engage with our asset managers to ensure they are deploying best practice integration and stewardship approaches.

Capital Allocation

We seek to generate additional returns and impact by allocating capital to those managers who have gained investment insights through integrating material ESG considerations and through allocating to companies and sectors who are contributing to and benefiting from sustainability trends.

Exclusions

We prefer engagement over exclusions with a belief that seeking to change behaviour is a more powerful means to have impact than exclusions.

Advocacy and Social Responsibility

We collaborate with our clients, asset managers and leading capital owning institutions to support the acceptance and implementation of sustainable investing practices across the financial services industry.

Partners Capital’s Dual Role in Sustainable Investing

Engagement with Asset Managers and how they are assessed

We engage with our asset managers to assess and improve their ESG integration, stewardship, and DEI approaches. The integration of financially material ESG factors alongside traditional fundamental analysis provides asset managers with a more comprehensive assessment of an investee.
We expanded our Asset Manager ESG Integration Survey in 2023, adding further emphasis on climate change and DEI. We received 190 manager responses across all asset classes, representing c. $44B of our overall AUM.

Deployment of ESG and Impact Investment Strategy

Where our clients have specific sustainability preferences, we support them in drafting of responsible investment policies and provide them with reporting to monitor compliance. Partners Capital can also source dedicated ESG and impact strategies for these client portfolios.
We continued to deploy capital in our dedicated Private Equity Environmental Focussed Fund. Until the beginning of 2024, we have committed more than $100M to nine fund opportunities and two co-investments, resulting in diversified exposure across the fund’s six sectoral focus areas.

Team

The Sustainable Investing team, led by Dr. Michael Viehs, Global Head of Sustainable Investing, is responsible for developing and implementing Partners Capital’s approach to sustainable investing.

Currently, the team consists of five members who have a background in investing, research, client relationship management, ESG and sustainable investing.