Global asset manager Abrdn is set to adopt the Sustainability Focus label for both its UK Sustainable and Responsible Investment Equity fund and Global Sustainable and Responsible Investment Equity fund from 20 February 2025.
As of the implementation date, the two funds will also be renamed the Abrdn UK Sustainable Equity fund and Abrdn Global Sustainable Equity fund, respectively. Investment objectives will also change, with both funds set to invest in companies that manage “adverse environmental impacts and promote societal welfare focused on climate change, environment, labour management, human rights and stakeholders”. These will be assessed against dual sustainability standards of either products and services or business operations.
According to Abrdn, at £638m, the UK fund is the largest UK equity fund to announce that it will adopt a label so far, while the global fund has total assets of £147m.
Rebecca Maclean (pictured), co-manager of the Abrdn UK Sustainable and Responsible Investment Equity fund, said: “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 about 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, at Abrdn, added: “We are pleased to offer labelled funds to our investors. We are 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 Financial Conduct Authority 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.”
