Managing money is a labour-intensive process but it is vital to get the stewardship and engagement pieces right, according to Castlefield's managing director.
Speaking to FTAdviser, John Eckersley and Ita McMahon, partner at the Manchester-based company, said their teams were fully committed to assessing every company in which they invest for financial soundness and for sustainability.
But Eckersley added: "Managing money is a labour-intensive exercise as we talk to every company we invest in and vote at the AGMs. We look at every single resolution.
"Because of our lens around governance, we have tended to vote against management on executive pay more than other fund managers might. We do not like to see individuals being over-rewarded.
"This might make us the awkward squad but the intention is well thought-through. We have nothing against executives being paid well, but they have to be mindful of shareholders and clients."
Eckersley, who told FTAdviser last month that he was due to step back in the autumn, added that Castlefield not only offers values-based investment, but also holds itself to account as a values-based investment business.
"You can buy an ESG fund from anyone but this is what we do - our principles are embedded in our people, and clients appreciate that."
McMahon, who started her working life as a carbon trading policy adviser for Defra before joining Castlefield to work on its stewardship activity, said the policy team worked in a "very collaborative way" with the fund managers on engagement and voting.
She also said the company was "ready" for the incoming sustainability disclosure requirements, which the Financial Conduct Authority is expected to bring in later this year.
Different things to different people
According to McMahon: "Sustainability means so many different things to different people.
"If you think about all the links in the chain that a holding has to go through before the end product can be invested in by a client, having these tighter definitions will really help the client get the product that they are asking for."
She added: "I love a label - when I buy an appliance I like to see the energy efficiency rating. If we as fund managers and advisers can do that for clients who are interested in the sustainability area of the market, this is a good thing."
But whether the rules change over time is still a matter of conjecture, as the FCA has been taking its time to bring in the SDRs instead of rushing legislation through, according to McMahon.
She said: "It is good that the regulator hasn't pushed the SDRs through, but taken time to consider all the submissions made by the industry to its consultations.
"I think we will see changes to the labels as they play out in real life and, actually, that's fine. If you work in the area of sustainability, you are used to having new frameworks come in, and new developments adopted. We're used to change."
