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18 Aug 2020

UN-backed body gives Coutts A+ for responsible investing, strategy and governance

Bank achieves strong sustainability scores across the board

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Coutts uses responsible investing to tackle topics such as climate change, diversity and fair working conditions more effectively than the wider industry.

That was one of the findings from an assessment of how we address environmental, social and governance (ESG) issues when managing our client portfolios and funds.

The annual assessment, conducted by the Principles for Responsible Investment (PRI), gave Coutts an ‘A+’ for how it adopts responsible investing – the highest possible grade and just above the industry average of ‘A’.

Coutts signed up to the PRI in 2018 as part of our commitment to embedding responsible investing into our processes and philosophy. Having joined the organisation, which is supported by the United Nations, we are obliged to undertake an independent, formal assessment each year, and this is our second one.

 

Managing major issues on clients’ behalf

Coutts scored highly across the board this year, improving on our impressive results from our first assessment and staying in line with or ahead of the industry in every category. You can see the full results below.

Leslie Gent, Head of Responsible Investing at Coutts, says: “These results mean our clients can rest assured we’re performing well when addressing the issues that matter most to the world on their behalf.

“There’s plenty of evidence showing that the companies and funds which work to address vital issues like climate change and diversity tend to perform better than those who don’t. So doing this well feeds directly into our investment aim of delivering sustainable, long-term returns for those who invest with us.”

She adds, “Our approach to responsible investing involves embedding it into every single aspect of how we handle our client portfolios and funds. We don’t offer one standalone sustainability product. Sustainability is central to all our products. And it’s good to see that approach recognised by the world’s most respected responsible investing body.”

Strong performance on funds and government bonds

Here are three highlights from the PRI assessment.

Strategy and governance – our A+ in this category relates to our overarching approach to responsible investing, including our objectives and targets, and how we include it when deciding which assets to invest in.

Indirect investment – this refers to our holdings in third party funds and we consistently scored an ‘A’ rating, which is important because the majority of our portfolios are invested through such funds. We hope to enhance this score next year as we increase our oversight of fund managers and focus even more on those with strong ESG practices.

Government bonds – We significantly improved our rating for such bonds – or ‘Fixed Income SSA’ as the PRI calls them. We achieved this by looking at best practice in the industry.

“These results mean our clients can rest assured we’re performing well when addressing the issues that matter most to the world on their behalf.”
Leslie Gent, Head of Responsible Investing, Coutts

The results in full

 

 

Coutts 2020 Score

Industry median Score

Coutts 2019 Score

Relevance (based on assets under management at Coutts)

Strategy and governance

A+

A

A+

100% of assets

Indirect (manager selection, appointment and monitoring)

 

 

 

 

Equity

A

A

A

40% of assets

Fixed income (corporate financials)

A

A

A

15% of assets

Fixed income (corporate non-financials)

A

A

A

20% of assets

Direct and active ownership

 

 

 

 

Equity incorporation

A

A

A

10% of assets

Equity ownership

A

B

A

As above

Fixed income (corporate financials)

B

B

NA

2% of assets

Fixed income (corporate non-financials)

B

B

NA

3% of assets

Fixed income (SSA)

B

B

E

10% of assets

Find out more

To learn more about responsible investing at Coutts, take a look at our Sustainability Report 2020 – a short, bite-sized guide to our philosophy and approach. And if you would like to discuss what it means for you in more detail, please contact your private banker. You can also find out more about the Principles for Responsible Investment at their website.

 

When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.

 

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