Rob Stewart (RS): Hanneke, as CEO, what are the areas you have focused on within the company to try to bring responsible investment into practice?

Hanneke Smits (HS): It’s not just about holding the companies we own to account, I think it’s very important that we live and breathe it ourselves. There are a number of things that we have been focusing on. One is I’ve actually asked our responsible investment team to work on an ESG review of Newton. Newton is not a listed company, but one could think of us as a listed company and say, if our investment team had to rate Newton using ESG criteria, what would that look like. I have already taken some steps to address some of the gaps that exist, and also help celebrate where I think we are really strong. One area for example is diversity and inclusion. Newton has led the way in many ways. It already has a flexible working programme. How we recruit is perhaps different from other firms as well. We recruit vocational trainees, we participate in the returning from the military programme, we have a graduate recruitment programme which brings people from different backgrounds, skills and different phases in their life journey into Newton and that has been very rewarding. On the workforce, a third are female, it could be better, but it is a third, and I that is better than for some other investment firms. 25% of the investment team is female. That is also better than industry standard, but nonetheless it is not a reflection of society and there could be more balance. A diverse workforce should lead to better decision making – whether it’s for Newton as a company or how we think about investing clients’ capital. So putting an additional focus on how we recruit, how we promote people, for me is very very important and so to that extent, I have asked Curt Custard, who is CIO at Newton, to chair the diversity and inclusion committee which brings together a number of people from different teams around the firm.

RS: One of the areas I did want to ask you about was, as you know over the last year, because clients have been asking and because I think there has been internal demand from some of the investment team, we have launched a suite of sustainable products. Has the launch of those products changed the way you think about our responsibility in this area at all?

HS: Well, it has. It has put more focus in terms of how we invest, and you have done a lot of work with the team Rob in terms of helping us to define, and taking us on a journey as to what is ESG, and what is sustainable investing and there are different strands to it. There is exclusion, versus moving to inclusion, in terms of how we think about companies and how we invest in them. That has then also meant that we have had to do some training with the team, because the ESG approach has been very integral for the 40 years that Newton has been around, but shifting to sustainable has meant engaging with the clients to also understand what they need to get out of these products and strategies, but also engaging with our own team, because it is a shift in mind set to actually include companies on a positive basis rather than actually perhaps considering or not considering them or working on an engagement plan, so I think it has also meant quite a bit of training internally.

CEO Hanneke Smits explains the core role of ESG in our investment process.