As a UK FCA regulated firm, Blue Whale is not subject to the EU Sustainable Finance Disclosure Regulation, however, as the investment manager of an EU UCITS fund (Blue Whale Investment Funds ICAV - Blue Whale Growth Fund) we are required to make the below disclosure regarding how consideration of sustainability risks is integrated into our investment process. Despite this integration and its important role in our investment decision-making, investors should note that Blue Whale’s funds do not have a sustainable investment objective and are not promoted as ESG funds.
Article 3: Description of policies on integration of sustainability risks in the investment decision-making process
Blue Whale Capital specializes in the management of products which invest in global equity markets. Its investment process is therefore focused on bringing together (i) fundamental analysis of companies listed on global stock exchanges with (ii) an understanding of market conditions and prices.
The firm considers sustainability risks carefully in its investment process as an integral part of its fundamental company analysis. In particular, the firm deems the analysis of environmental, social, and governance (ESG) factors to be an essential component of its investment process, because research shows environmental degradation, social conflict, and poor governance to be inconsistent with the kind of sustainable growth, sound capital allocation, and reduced tail risk which the firm’s investment process seeks to identify.
Article 4: Principal Adverse Sustainability Impacts
No consideration of sustainability adverse impacts
Whilst Blue Whale Capital LLP (“the Firm”) considers sustainability risks carefully in its investment process as an integral part of its fundamental company analysis, it does not consider principal adverse impacts (“PAIs”) of investment decisions on sustainability factors in the manner prescribed by Article 4 of the Disclosure Regulation.
Considering the challenges that continue to exist in relation to data availability, reliability and consistency and the Firm’s decision to limit its activities to Article 6 funds, it is not planning to consider PAIs for the foreseeable future.
The Firm has significantly less access to management by comparison with larger investment firms and this limits its ability to engage at the highest levels with the companies it invests in. Nevertheless, it engages on sustainability issues where it can with corporate investor relations when such issues are material to an investment case or if they pose an investment risk.
Whilst the Firm supports the objectives that underly the UK Stewardship Code 2020, it is not in a position to commit to the Code in its entirety.