SUSTAINABLE
Salt Funds Management (Salt) is an active manager in equities, leading the way in ESG integration and alignment with client values. As a fund manager, our core objectives are to manage client funds in a way that doesn’t do significant harm, use its position as a shareholder to encourage and support companies to do better, and where possible, do good while continuing to deliver strong returns to our clients. The transition to a sustainable economy will be ongoing. Through active management, stewardship, innovation, and sustainable leadership, we can deliver more sustainable returns in the long term while activating positive change to support a faster transition for the benefit of generations come.
Salt is a long-standing signatory to the United Nations-sponsored Principles of Responsible Investment (PRI), which are a core part of Salt’s Responsible Investment Policy. We have observed the growing number of signatories globally to PRI. We are encouraged by the movement of investors to support the six principles of responsible investment, directing capital to do better. Along with the PRI, other initiatives and frameworks help companies, investors, and communities streamline efforts to assess risks and opportunities appropriately and formulate strategies to mitigate and adapt to transition to not only a low carbon economy, a sustainable economy. Salt's 2023 PRI Summary Scorecard follows:
- Policy Governance and Strategy: 92% (5-star)
- Direct - Listed Equity - Active Fundamental: 96% (5-star)
- Direct - Hedged Funds - Long/Short Equity: 91% (5-star)
- Confidence Building Measures: 100% (5-star)
Salt supports the UN Sustainable Development Goals (SDGs) and believes it can positively contribute to achieving these goals, both operationally and through it’s investment process. The SDGs are an articulation of the world’s most pressing sustainability issues and act as the globally agreed sustainability framework. The 17 goals cover all aspects of development, from affordable and clean energy to good health to eradicating poverty and hunger. While we support the achievement of all SDGs, we believe the following are where we can make the greatest contribution from our business operations:
Through sponsorship and partnerships, Salt contributes to the following SDGs:
Salt believes the failure to achieve SDGs will impact all countries and sectors to some degree and create macro-financial risks. On the contrary, achieving the SDGs will be a driver of global economic growth, which we acknowledge as a structural source of financial return.
Internally, Salt is on a journey of creating a culture of sustainable awareness and action, doing its part to contribute to the SDGs and demonstrate leadership amongst its peers. While Salt’s operations are relatively small, we believe no effort is too small when it comes to fighting climate change and meeting the SDGs.
Climate Action
Climate Action (SDG #13) is the most significant threat to planet earth and our investment universe. Salt prioritises climate change mitigation and adaptation, both operationally and in its investment process.
The Paris Agreement is the global agreement on climate change to keep the global average temperature well below 2° C above pre-industrial levels, while pursuing efforts to limit the temperature increase to 1.5° C. Salt supports New Zealand’s alignment with the Paris Agreement and the introduction of the Climate Change Response (Zero carbon) Amendment Act to set New Zealand’s national targets into law and as such, will see the carbon intensity of Salt’s portfolio decrease over time.
In alignment with the Paris Agreement, we are an official supporter of the Taskforce of Climate-related Disclosures and the mandatory implementation in New Zealand, encouraging New Zealand companies to identify and disclose risks associated with possible transition scenarios. We acknowledge each scenario has physical and transitional risks. However, an orderly transition will have the greatest long-term outcome and best position us to meet the net-zero 2050 target and the fast-approaching 2030 milestones.
The Taskforce for Climate-related Disclosures (TCFD) plays a vital role in identifying and communicating the physical and transitional risks within each business and how sustainable each companies strategy is in different transition scenarios. While mandatory from 2023, we encourage companies to get onto it sooner as the process alone will bring key climate-related risks to the surface across different scenarios.
Salt’s Sustainable Investment Spectrum
Responsible investment, including ESG integration, is what we consider the foundation of our responsible investment commitment across all Salt’s investment options.
The financial markets are evolving, as are investors. Salt has widened its sustainability-driven opportunities and launched five sustainable funds further along the sustainability spectrum, giving clients more options to align internal values with their investments. Salt is also the manager of the Carbon Fund (CO2.NZ) that invests in greenhouse gas emission units.
