The CT Sustainable Universal MAP funds do not just avoid ‘bad’ companies, but work to actively influence and reshape corporate behaviour, considering aspects such as climate, human rights and governance, through engagement with underlying holdings.
Stewardship is a core component of how the CT Sustainable Universal MAP funds aim to influence real-world outcomes. In 2024, progress was recorded across a wide set of engagement themes including climate change, corporate governance and human rights, showing how company engagement can complement traditional investment decisions.
The stewardship process involves ongoing engagement with companies held across the CT Sustainable Universal MAP range, aiming to encourage those businesses to improve on financially material sustainability risks or opportunities.
To measure effectiveness, Columbia Threadneedle used a milestone system over 2024. Success of engagement efforts can result in recorded milestones, which were assessed using a one-to-three-star rating system. A one-star milestone indicated incremental progress, while three stars reflected a more significant outcome. In 2024, each of the five CT Sustainable Universal MAP funds recorded between 16 and 22 milestones. These were spread across issues including climate change, labour standards, environmental stewardship and corporate governance.
Driving change through engagement
Several companies recorded notable developments in 2024 following engagement, including waste management specialist Veolia publishing a new climate strategy and a standalone climate report. Over 2024 Veolia hit five climate change related milestones, including achieving and setting new emissions targets, and disclosing additional details on its decarbonisation strategy.
ComfortDelGro, a transport operator based in Singapore who aims to transition 90% of its taxi fleet and 50% of its bus fleet to cleaner energy vehicles by 2030, published a revised TCFD report that demonstrated significant improvement in its climate scenario analysis. “Our engagement will now focus on how the company will incorporate the outputs from this process into its corporate strategy,” the CT Sustainable Universal MAP managers said.
Irish-American paper-based packaging supplier Smurfit WestRock was another company engaged in 2024. A member of Columbia Threadneedle’s Responsible Investment team carried out a two-day site visit to the company’s forestry assets and pulp mill in Colombia, accompanied by the company's chief sustainability officer, to assess its sustainable forestry practices and community engagement efforts, as well as the environmental and social impacts of its operations.
The visit covered a tour of the company's forest research unit, forestry plantations and Cali pulp plant, and the team observed scientific collaborations with universities and the positive environmental impact of plantations established on degraded cattle pastures. They also visited company-funded local schools that provide employment opportunities for alumni in impoverished regions and encouraged the company to ensure any third-party sourced biomass for its new coal-replacing biomass boiler is certified.
“We were impressed by Smurfit Westrock's sustainable forestry practices, community engagement efforts, and the scope of the mill revamp in Cali,” the fund managers said. “In particular, we were pleased to see the improvements that Smurfit has made on its management of operational impacts on biodiversity, which has been a focus of our engagement for the past two years.”
Voting and accountability
Stewardship is just one part of the broader sustainable investment process. The CT Sustainable Universal MAP funds follow a three-pillar philosophy of Avoid, Invest and Improve to build portfolios, with holdings generally aligned with seven sustainable investment themes (Energy Transition, Resource Efficiency, Sustainable Finance, Sustainable Infrastructure, Societal Development, Health and Well-Being, and Technological Innovation and Inclusion).
The Avoid stage excludes companies with socially or environmentally damaging products or unsustainable business practices, such as those involved in controversial weapons or producers of tobacco products. The Invest stage focuses on issuers providing positive solutions to sustainability challenges. The Improve stage is where stewardship plays its role: working with companies to enhance their practices over time.
Voting is used alongside engagement to reinforce expectations. In 2024, the funds voted at an average of 134 meetings each, with less than 4% of votes cast against management. The voting pattern reflects a higher proportion of investment in sustainable companies with more progressive boards, while still holding firms accountable when necessary.
Embedding stewardship in a broader sustainability framework
The funds’ stewardship efforts operate within a wider sustainability framework intended to support long-term growth. As part of this, the five funds, which range from Defensive to Adventurous, are run with the goal of reaching net zero emissions by 2050 or sooner.
The carbon footprint of all five CT Sustainable Universal MAP funds declined in 2024 compared to 2023. The carbon footprint is measured in CO₂ emissions per million dollars invested, based on Scope 1 and 2 data. At the end of 2024, all five of the funds’ carbon footprints were lower than that of their composite benchmarks.
The investment team also tracks issuer alignment with net zero goals. Issuers representing around 19% of each funds’ carbon footprint are considered aligned, with a further 57% to 67% still progressing toward alignment. Issuers such as Union Pacific, Veolia Environment and Waste Management Inc are classified as aligned and therefore have specific commitments, targets and a clear strategy in place to meet net zero objectives by 2050 or sooner.
The strategy also reports on certain environmental and social metrics. On the environmental side, each fund had a lower water and waste intensity than its composite benchmark in 2024. The mining sector, specifically the holding in copper miner Antofagasta, remains a significant contributor to waste intensity due to the nature of the industry, but the team believes copper miners play an important role within the energy transition, hence they can be considered a suitable sustainable investment.
“Antofagasta remains by far the largest contributor to waste intensity, owing to tailings and waste rock generation from the company’s copper mining operations in Chile,” the managers explained, yet the company is reducing its waste intensity. “Antofagasta reported an 18% decrease in generation of mining waste in 2024 and an increased recovery of industrial waste as larger quantities of lubricating oils, drip lines, batteries, lead tanks, belts, scrap and end-of-life tyres were recycled.”
On social metrics, gender diversity at board level showed steady improvement, with several companies held within the funds increasing the proportion of women in director roles. The executive pay ratio, comparing CEO compensation to average employee pay, remains lower across the funds than in their respective composite benchmarks. Microsoft, Mastercard and NatWest were identified as holdings with higher executive pay ratios. Engagement on pay continued through 2024, with a focus on strengthening the links between companies’ ESG targets and remuneration.
In 2024, stewardship also considered responsible technology use. Apple released Responsible AI principles following investor engagement, though further work is needed to implement and test those principles effectively.
Eloise Robinson, multi-asset solutions portfolio manager at Columbia Threadneedle, said: “Our aim with the CT Sustainable Universal MAP range is the best of both worlds: to meet your investment goals and to make a positive contribution to a more sustainable world.”
More information on the CT Universal MAP ranges can be found here.
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