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CCLA, One Angel Lane
London EC4R 3AB
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IMPORTANT INFORMATION
All data as at 31 December 2025, unless specified otherwise. This document is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. We strongly recommend you seek independent professional advice prior to investing. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. Any forward-looking statements are based on CCLA’s current opinions, expectations and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated. All names, logos and brands shown in this document are the property of their respective owners and do not imply endorsement. These have been used for the purposes of this document only. CCLA Investment Management Limited (registered in England & Wales, No. 2183088, at One Angel Lane, London EC4R 3AB) is part of the Jupiter Group, and is authorised and regulated by the Financial Conduct Authority.
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Our responsible investment approach

In our equity investment process, we seek to integrate environmental, social and governance (ESG) considerations where we think they could impact investment performance.
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I’m Here for You, HM Prison & Young Offender Institution Grampian | Courtesy of Koestler Arts
That said, our strategy emphasises stewardship: using our influence as investors to push companies towards more sustainable business practices. This dual-pronged approach recognises the priorities of our unique client base, ensuring that financial returns are delivered in a responsible way.

Assessing financial materiality

We believe that changing legislation, regulation and shifting societal preferences can undermine the long-term profitability of companies with unsustainable business models.
In our listed equity investments, we aim to identify and address any extra-financial risks – or risks relating to environmental, social and governance (ESG) considerations – that may harm investment returns in the future.
Specifically, we look to identify companies:
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With poor management or weak corporate governance
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With an unacceptable social or environmental impact
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Failing to demonstrate a willingness to improve through engagement
Prior to purchase, we assess companies’ ESG risks in conjunction with their financial position on the following basis:
1
Corporate governance. We use a bespoke quantitative corporate governance rating tool that assesses the board structure, ownership, accounting practices and management capabilities of listed companies. See Appendix 4.
2
Climate change. We consider the risks and opportunities associated with climate change in our investment process. For example, we impose targeted, company-wide restrictions and we assess companies in high-carbon sectors on their progress towards achieving net-zero emissions. Our approach is detailed in our climate change and investment policy.
3
Wider sustainability factors. We review potential investee companies on their approach to the most financially material sustainability risks relevant to their industry. We use Sustainalytics’ ESG Risk Ratings, which are based on widely recognised materiality frameworks, including the SASB Standards and the Global Reporting Initiative.
4
Corporate behaviour and standards. We review potential investee companies’ involvement in any sustainability-related controversies. We pay particular attention to those suggesting a company has breached, or may breach, international standards set out in the UN Global Compact or UN Guiding Principles on Business and Human Rights.
Where we identify material concerns, we conduct further research, potentially including a fact-finding meeting with management. Subject to the success (or otherwise) of this research, companies can be approved for purchase.
Once we have made an investment, we routinely monitor companies to ensure that standards do not slip.

Assessing real-world materiality

While our investment process focuses on financially material sustainability issues, our engagement work seeks to encourage companies to minimise their negative environmental and social impacts and to adopt more responsible business practices.
We assess companies’ impacts on the real world and build engagement programmes aimed at improving company behaviour. These efforts are broadly categorised into three pillars – better work, better environment and better health.
Some sustainability risks are so pervasive that they cannot be mitigated by diversification and careful stock selection. Climate action failure, social cohesion erosion, public health crises: these represent system-wide dangers, not only to portfolios but also to the environment and the functioning of society. Accordingly, much of our stewardship work aims to tackle systemic sustainability risks – those affecting all or most companies, across industries and geographical regions.

Working for you

This combination of financial and real-world analysis allows us to identify, and avoid, the most unsustainable businesses. It also enables us to develop ambitious engagement action plans to push others forward.
We use these plans to closely monitor companies’ progress. We reconsider investment if companies refuse to engage or do not respond adequately to engagement on the most serious issues.i
The approach described above is designed to help us control risk, deliver more consistent investment returns, and build on our mission of helping our clients to harness the power of investment markets to maximise their impact on society.
Avoiding harm, engaging for change
Our minimum standards for investment are designed to help us avoid exposure to businesses with an unacceptable social or environmental impact. They apply across all funds and segregated portfoliosii and exclude companies with a predetermined revenue threshold coming from:
  • the extraction, production and/or refining of fossil fuels
  • tobacco
  • cannabis
  • indiscriminate weaponry (we have a zero-tolerance policy if the company is involved in the production of landmines, cluster munitions, or chemical or biological weapons)
  • sovereign debt issued by countries identified as being among the world’s most oppressive (again, we have a zero‑tolerance policy in this regard).
For other companies, we use our rights as shareholders – including engagement and voting – to push them towards better corporate behaviour.

Engagement and voting – 2025 in numbers

Engagement

0
active engagement themesiii
0
£
billion in assets under engagementiv
0
companies engagedv
0
companies improved

Voting

0
shareholder meetings voted at
0
countries voted in
0
meetings withholding support for a director
0
proposals voted on
i We define ‘the most serious issues’ to mean involvement in controversies that suggest a company has breached, or may in the future breach, international standards set out in the UN Global Compact or UN Guiding Principles on Business and Human Rights.
ii Additional client-led restrictions may apply on a fund-by-fund basis.
iii Engagement themes were biodiversity and nature, climate action, human rights controversies, inequality and Living Wage, mental health, modern slavery, nutrition, and UN Global Compact.
iv Based on the assets for which we conduct engagements, comprising CCLA’s equity holdings and the financial institutions used in our cash funds. v Some companies may be covered under multiple engagement themes. Includes engagement with all portfolio holdings and companies CCLA does not hold.