This Policy, which is regularly reviewed, outlines Octopus Investments’ approach to Responsible Investment and was approved by the Octopus Investments Board on 23rd June 2020.
Octopus Group philosophy
Octopus is a group of companies investing in the people, ideas and industries that will help to change the world for the better. For nearly two decades we’ve been challenging convention, backing companies, and turning bright ideas into game-changing businesses with one purpose – to create something better. Better ways to help UK businesses to grow. Better ways to look after family wealth. Better healthcare and retirement facilities. Better access to property loans. And better renewable energy generation and supply.
We believe there is no ‘one size fits all’ approach to Environmental Social Governance (ESG). Different businesses and investors have different appetites for ESG matters and different investment products have exposure to different opportunities and risks associated with ESG.
To accommodate this, each Octopus managed Fund or business has a bespoke ESG policy.
Responsibility and oversight
The Octopus Investments Board have overall accountability for the delivery of this Responsible Investment policy. To make sure that happens they have established a dedicated ESG Committee, consisting of an Octopus founder, the Chief Investment Officer and the Impact and Sustainability Director.
The CEO of each Octopus investments Business Unit is responsible for implementing this Responsible Investment Policy within their business. Fund Managers are accountable for implementing the individual Fund ESG Policies and ensuring that they meet the minimum requirements laid out here. The Investment Committee within each business factors ESG into all investment decisions in line with the relevant Fund ESG Policy.
Supported by the internal audit team, the ESG Committee reports annually to the Octopus Investments Board on delivery against this Responsible Investment Policy.
Octopus distinguishes between ESG and Impact as follows:
ESG: The approach that we, as investors, use to identify, measure and mitigate Environmental, Social and Governance risks associated with our investments.
- Environmental issues such as those connected to global warming, energy usage, biodiversity and pollution where poor performance may impact the long-term value of the investment.
- Social factors such as how a company treats its workers, its level of social licence to operate and health and safety considerations where poor performance could result in censure, fines or simply a failure to thrive. Conversely, good performance may enhance value and market opportunity.
- Governance topics including business ethics, board structure and independence, executive compensation policies and accounting, which are required to meet the legal and ethical standards of all our stakeholders.
Impact: The social or environmental impact, good or bad, associated with our products, services, technology or infrastructure.
- Impact is measured by KPIs relating to specific social or environmental objectives.
- An impact investment defines a specific positive impact objective, and a means of measuring success against it, alongside financial indicators (IRR, income, capital growth etc).
To help with this distinction, Octopus describes ‘ESG’ as investments inputs that help the investment managers make better investment decisions (ESG practices, policies, initiatives and risk mitigation tools) and ‘Impact’ as investment outputs (e.g. renewable energy generated) or outcomes (financing SMEs that support job creation and foster economic growth).
We incorporate the following principles (the “Principles”) throughout our business and require Fund ESG policies to meet or exceed intentions laid out here. We seek to:
- be honest and law abiding and meet or exceed international good practice.
- provide safe and healthy working conditions for all.
- give a voice to all staff and foster strong communication between employees and management.
- treat people fairly, irrespective of race, gender, nationality, disability, political or religious beliefs.
- protect the environment and promote sustainable use of natural resources.
- robustly consider the impact of any operations on local communities.
- be transparent with customers and shareholders and exceed their service expectations.
- accept no bribes and uphold high standards of business integrity in all our dealings.
- implement policies and procedures to identify, manage and report on ESG risks.
- seek a ‘just transition’ for workers and communities as the world responds to climate change.
Further, we are signatories of, and seek to adhere to, the United Nations Principles for Responsible Investment.
Octopus will not engage with any person or entity on an internationally recognised ‘deny list’.
If you have any further questions, please do not hesitate to contact the Press Office on 020 7776 7968 or [email protected].