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Recognising the Value of Responsible Investment

Sanlam Investment Group’s intention is to play a strategic part in securing a sustainable future for South Africa and all those who live in it. We nurture and grow our clients’ wealth while making a meaningful contribution to the transformation, growth and development of our economy and society.

Our Investment Philosophy and Approach

Sanlam Investment Group’s investment philosophy is based on rational decisions and thorough research, which informs the cluster’s position as a value investor focused on the long term.

By taking the long-term view, we recognise that non-financial issues may play a greater role in our valuations. These issues typically relate to the quality of companies’ relationships with their broader stakeholders and their responsible stewardship of natural resources, as well as their own governance approach. Accordingly, we embed sustainability into our core investment process to better understand the potential for companies to deliver their cash flows into the future. This entails broadening and extending our investment horizons guided by our responsible investment policy.

Sanlam Investment Group subscribed to the Code for Responsible Investing in South Africa (CRISA) in 2011, and is committed to integrating five principles into its investment approach:

An institutional investor should incorporate sustainability considerations, including environmental and social sustainability and governance, into its investment analysis and investment activities as part of the delivery of superior risk-adjusted returns to the ultimate beneficiaries.

Key activities in 2018

  • We attended seminars and presentations on water scarcity, land reform, climate change and more
  • We included responsible investment principles in a client mandate and plan to extend this to other clients in 2019
  • We have subscribed to received environmental, social and governance-related data in 2019
  • Our Responsible Debt Investment Policy was approved by the Sanlam Investment Management board

An institutional investor should demonstrate its acceptance of ownership responsibilities in its investment arrangements and investment activities.

Key activities in 2018

  • We voted on 3 970 (2017: 3 669) shareholder resolutions by proxy at 250 (2017: 259) shareholder meetings

Where appropriate, institutional investors should consider a collaborative approach to promote acceptance and implementation of the principles of CRISA as well as other codes and standards applicable to institutional investors.

Key activities in 2018

  • We attended remuneration policy discussions hosted by PwC
  • We collaborated with external investment managers

An institutional investor should recognise the circumstances and relationships that have the potential to produce conflicts of interest and should proactively manage these when they occur.

Key activities in 2018

  • We identified and managed potential for conflicts of interest with clients

Institutional investors should be transparent about the content of their policies, how the policies are implemented and how CRISA is applied to enable stakeholders to make informed assessments.

Key activities in 2018

  • We completed client and United Nations Principles for Responsible Investments questionnaires related to our responsible investment activities
  • We began to publicly report on our proxy voting and engagement activities on our website

Aligning with the UNPRI

Sanlam Investment Group subscribes to the United Nations Principles for Responsible Investments (UNPRI), upon which the Code for Responsible Investing in South Africa is based. Sanlam Investment Group annually assesses its policy framework and implementation against the CRISA principles to compare its progress with that of its international peers. This enables us to continuously refine and improve our approach to responsible investment.

How We Invested Responsibly in 2018

Sanlam Capital Markets (SCM) is a division of Sanlam Investment Group. SCM is a niche capital markets operation, concentrating on providing debt and equity financial engineering solutions to clients. Importantly, SCM is committed to making a meaningful contribution towards inclusive economic growth in South Africa. To achieve this, SCM aims to facilitate and promote the participation of the previously disenfranchised in a sustainable manner, thereby bringing about mutually-beneficial outcomes for all stakeholders.

At the end of 2018, SCM’s asset balances for empowerment financing stood at R14,8 billion. Empowerment financing incorporates the following sectors:

  • Infrastructure and renewable energy
  • Property
  • General South African corporate lending and acquisition finance

The R14,8 billion further comprised of:

  • Targeted investments to the value of R5,5 billion
  • Black economic empowerment financing to the value of R9,3 billion

Getting Behind a Global Climate Fund

Sanlam Investment Group (SIG) was involved in the launch of a global climate fund, Climate Investor One (CIO) in 2017. With the support of broad public and private sector commitment, CIO will be able to mobilise commercial funds and build approximately 30 renewable energy projects over its lifetime, delivering an estimated 1 600 MW of additional capacity in 11 developing and emerging market target countries.

CIO therefore gives SIG’s clients the opportunity to invest in a fund that has a positive impact on the environment, while benefiting from the unique profile of an asset class that delivers long-term assets to meet the long-term cash-flow needs of our clients.


Opening up New Investment Opportunities with Satrix and StokFella

Satrix Investments, South Africa’s largest index tracking business, has collaborated with StokFella, a fintech stokvel solution, to open up a world of new investment opportunities for members of the country’s more than 820 000 stokvels.

Sanlam Life Insurance is a licensed financial service provider.
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