The abrdn UK Sustainable and Responsible Investment Equity Fund and abrdn Global Sustainable and Responsible Investment Equity Fund are adopting the‘Sustainability Focus’ label from February 2025, under the FCAs Sustainability Disclosure Requirements.
And as of the implementation date, 20 February 2025, the two funds will be renamed abrdn UK Sustainable Equity Fund and abrdn Global Sustainable Equity Fund, respectively.
At £638m*, the UK fund is, to date (and to the best of abrdn’s knowledge), the largest UK Equity fund to announce that it will adopt a label, while the global fund has total assets of £147m**.
From 20 February 2025, changes relating to the Sustainability Disclosure Requirements are:
• Amendments to the investment objectives to set out an explicit broad-based thematic sustainability objective in addition to an existing financial objective.
• Objective to invest in companies that manage adverse environmental impacts and promote societal welfare focused on climate change, environment, labour management, and human rights & stakeholders. These will be assessed against dual sustainability standards of either products and services or business operations.
Rebecca Maclean, co-manager of abrdn UK Sustainable and Responsible Investment Equity Fund says: “Sustainable companies are often amongst the most successful long term. Treating staff, suppliers and customers well tends to go hand in hand with better financial performance.
“Yet many investors have held off looking at sustainable funds this year partly because the regulation was up in the air and there was uncertainty how it would shake out.
“After a slow start, this is starting to change, and conversations can start. We want to celebrate some of the brilliant businesses leading the way. From a UK perspective, Convatec is just one example, which specialises in advanced wound dressings and solutions for chronic conditions such as diabetes and Parkinson’s disease, with a compelling innovation pipeline.
“Softcat is another great example, which has become the UK’s leading technology value-added reseller, achieving remarkable growth largely due to its distinctive corporate culture. This culture influences its hiring practices, leadership development, and employee incentives, all of which are vital for maintaining Softcat’s competitive edge in the market.
“All this is set against a stable UK political backdrop and with compelling, cheap valuations versus history and other markets. We see a wealth of exciting opportunities to invest in high-quality, sustainable companies at valuations that reflect little optimism.”
Dan Grandage, Chief Sustainability Officer, Investments, says abrdn is starting to see more funds adopt sustainable labels, “offering more choice for investors seeking sustainability objectives.
“However, it is still a relatively small universe, underscoring the high-quality mark that the FCA has set.
“It is also important to remember that the labels regime is only a part of the overall package that also includes a focus on avoiding greenwashing, and providing more clarity on funds that have sustainability characteristics.
“Combined with high quality labelling, these developments are a welcome addition and should provide investors with the tools they need to make informed allocation decisions.”
Main image: andrew-russian-UuVkBMbNSlM-unsplash
