Asset manager Standard Life has decided not to include food company Glanbia in a recently launched sustainability fund because it is not confident of the nutritional value of the company's health bars for sale in the United States.
The Global Equity Impact Investment Fund from Standard Life included Glanbia in the paper launch of the fund but decided to remove it before the fund went live last week.
"We're less confident in the impact it's having," Standard Life investment director Ross McSkimming told The Irish Times.
“When we launched, Glanbia didn’t make it into the portfolio... We want to make sure it’s got that financial return but it’s also having that impact and we’re just less clear on Glanbia’s impact strategy. We’re less confident in the impact that it’s having than we had previously thought and that was more to do with their nutritional bars that they were rolling out in the [United] States – the ‘thinkThin’.
“Our initial thoughts on that was that it was going to be a big deal for the company. Rather than reaching for a Snickers or a Mars, people would be reaching for these healthier options but the reality is the company is still working through the nutritional benefits of these at the moment. So, we’re less confident that that’s going to be a bigger part of their strategy.”
Sustainability
Sources in Glanbia said it had no comment to make on the constituents of the fund which, it said, was a matter for Standard Life.
However, a spokeswoman said its thinkThin protein bar product “plays into the ‘better-for-you’ market category and is part of Glanbia’s broader range of performance nutrition products that help support a healthy, active lifestyle”.
“Glanbia takes its sustainability responsibilities very seriously and manages its business to ensure it makes a positive social and environmental impact in addition to delivering value for shareholders.
“ThinkThin offers a range of products which are typically protein rich, GMO free, gluten free, and lower in sugar than its competitors and which are designed to meet a variety of consumer requirements and tastes,” the company said in a statement.
It added that Glanbia had been recognised both in Ireland and in the US for its sustainability approach and that it “constantly evolves this approach to meet the requirements and expectations of all stakeholders including the investor community”.
Standard Life noted that Glanbia was still in its “investment universe” and should its credentials be regarded as having improved, it could be included in this fund in the future.
Efficient homes
Meanwhile, Irish materials manufacturer Kingspan, while not currently in the fund, is on the long list for inclusion.
“Kingspan makes it into our investment universe. Clearly from the environmental point of view it’s all about CO2 reduction, it’s about making homes more efficient and that’s the kind of company we would be interested in,” Mr McSkimming said.
The fund in question invests in a concentrated portfolio of stocks that are closely aligned with the United Nations’ sustainable development goals. The companies selected for the fund have to deliver financially before they’re assessed for their impact on the UN’s goals.
Some of the UN’s 17 goals include the wiping out of poverty, good health, quality education, affordable and clean energy, climate action and sustainable cities and communities.
The rationale behind this fund is that more than £165 trillion will be required to meet the goals and governments alone can’t provide that funding, Mr McSkimming said.
Stocks included in the fund include Danish energy group Vestas Wind, Belgian materials technology company Umicore and Kenyan mobile network operator Safaricom.
‘Multibillion fund’
“This is going to be a multibillion fund,” Mr McSkimming said, adding that “asset managers have to invest for a better future”.
“What we’re not interested in is those companies making charitable donations, or having the goals as a sideline part of their business,” he said.
Standard Life is aiming for this fund to outperform the MSCI All-Country World Index, which has delivered returns of 13.59 per cent over the last 12 months.
While the fund has launched for institutional investors, retail investors will have to wait until the first quarter of next year to get access to the fund.
