How Parmenion is driving sustainable investing through stewardship
At Parmenion, we believe good stewardship means more than strong investment outcomes – it’s about looking after clients, employees, and the planet. That’s why we’re proud to sponsor and take part in this year’s Goodstock conference in Bristol, a fast-growing event for sustainability-minded financial planners and investment professionals.
The day brought together an inspiring line-up of hard-hitting speakers tackling some of the toughest issues of our time – from climate change and conflicts in Ukraine and Gaza, to gender diversity in financial services. I was privileged to join ShareAction, Greenbank, and Barerock on a panel discussion “Steering the Stewardship” where I shared Parmenion’s perspective on what good stewardship really looks like in practice.
Here are some of the key takeaways from our discussion:
Stewardship is about people as well as portfolios
At Parmenion, stewardship starts with how we support our clients through both our investment solutions and on our platform services. That commitment underpins our focus on delivering strong investment outcomes and excellent client service.
And to deliver this for clients year after year, we must first look after our people. From flexible working and professional development to our employee forum, where reps including myself regularly meet with our CEO, we’re constantly working to improve our staff culture and experience. That’s why we’ve been named as one of the Sunday Times Best Places to Work for the last two years.
Taking responsibility for our footprint
As a business, we want to do the right thing from an environmental perspective. We’ve set ourselves a clear and ambitious target: net zero by 2040 across our business operations. There’s already been very tangible progress – our Bristol office is one of the city’s greenest buildings, and our data centres that support the platform are now 100% powered by renewable energy.
Driving change through investment decisions
The biggest impact we can have, however, is through the way we manage our clients’ money. Within the Parmenion Investment Management team, ESG considerations are fully embedded into the fund due diligence we do – for active and passive funds and all asset classes.
- We analyse each fund’s exposure to contentious areas such as tobacco or fossil fuels.
- We assess carbon metrics for each fund, and examine how fund managers vote and engage with companies.
- As signatories of the UN Principles for Responsible Investment, we’re proud to have achieved 4 out of 5 stars in our first year of reporting across our investment solutions (active, passive, income, retirement, ESG). We’re motivated to keep improving on this as that’s the biggest difference we can make.
Holding fund managers to account
Because we invest in funds, not directly in companies, our stewardship efforts focus on rigorous fund due diligence. Most of our fund manager engagement happens before we invest – and the majority of funds don’t make it through our process, particularly in our dedicated ESG solutions.
We do always give clear feedback to fund managers to explain our decisions. It can be helpful to compare them with peers, so they can see where they fall short versus our requirements. This regular review of new funds also helps us to ensure that we remain invested in ESG leaders, and we have high conviction in the funds we hold.
We’re not afraid to challenge some of the big players either. Recently our exposure to US passive providers in our mainstream (non ESG) solutions has been challenging from an ESG perspective. In our passive solutions which don’t have a particular ESG mandate, we invest with some of the big US firms as they are very competitive on costs and track their benchmarks very efficiently. However, we are painfully aware that they are significantly backtracking on ESG.
Four years ago, our annual ESG assessments showed positive momentum among large US firms: they were signing up to net zero asset managers, voting in support of ESG proposals at company AGMs, and engaging on issues like diversity, equity and inclusion and carbon emissions. Fast forward to today, and much of that progress has basically gone.
We can’t change the political backdrop in the US, and as a relatively small investor our influence is limited. But what we can do – is continue to collect data from these US fund managers and continue to give clear feedback on where these firms are severely lagging on ESG. We get great access to fund managers – over the last few months we’ve held meetings with the global heads of stewardship at two of these very large US firms. We gave clear feedback on how their voting and engagement on environmental and social issues doesn’t align with our expectations as a UK-based investor.
It’s not always an easy conversation, but it’s making a difference. Encouragingly, one of these US firms has invited us to participate in a pre-pilot for pass-through voting. If they roll this out, this will give us the ability to cast votes in line with an ESG-aligned policy on behalf of our clients - a powerful step forward in managing climate risks in our passive portfolios. This is an ongoing project, but it’s encouraging there has been positive progress from this.
Why this matters for advisers and their clients
For financial advisers, Good Money Week is the perfect moment to reflect on the role of sustainable investing. At Parmenion, we see ESG not as a label or a niche, but as a critical part of long-term risk management and value creation. Our investment team applies a minimum ESG standard across all solutions, helping advisers give clients confidence that their money is being managed responsibly.
Goodstock was a day full of energy, ideas and connections – a reminder that sustainable investing is as much about collaborations as it is conviction.
If you’d like to understand more about how the Parmenion Investment Management team integrates ESG into our portfolios – or how we can help you meet clients’ growing interest in sustainability – please get in touch.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity.
Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
