Portfolio Adviser • Portfolio Adviser Magazine November 2022 • Last word

The chairman of the insignificantly-sized investment company Kermitted Asset Management is a huge supporter of environmental issues – and he has the airmiles to prove it

"So you’re off to Sharm el-Sheikh for COP27 any moment?” I asked the chairman of the insignificantly- sized investment company Kermitted Asset Management when we caught up last week. “Just you try and stop me,” he enthused. “Oh no – nothing demonstrates how seriously the firm and I feel about all matters environmental than jetting off to a Red Sea resort to discuss the best ways to tackle climate change.”

“Truly you are a martyr to the cause,” I nodded. “So how many climate-change conferences will that make it you’ve personally attended out of 27?” “Off the top of my head?” replied the chairman, furrowing his brow. “You know, this could well make it an even 20. I mean, much as I’ve always felt inspired to attend since they picked Berlin as the first location back in ’92, obviously it has not always proved practical to do so.

“I definitely remember Bali and Cancun … a couple of trips to Marrakech … Montreal and, it goes without saying, Kyoto. Lima had its moments – as did Durban, Nairobi and New Delhi – and who can forget Buenos Aires?” “1998 or 2004?” I checked. “Ah,” said the chairman. “Then clearly it is possible to forget one Buenos Aires. Still, I know I did Doha, Milan, Paris, Copenhagen, Madrid. And of course there was Glasgow last year.”

“How about Poland?” I asked. “Oh, I don’t think there’s ever been a COP held there,” the chairman replied. “Actually, there have been three,” I pointed out. “Poznan in 2008, Warsaw in 2013 and Katowice in 2018.” “Really?” said the chairman, looking doubtful. “How extraordinary. Well, if you’re sure, you’re sure – and I suppose I must have been unavoidably detained elsewhere in each of those years.”

“Remarkable,” I replied. “And I guess the same goes for Geneva in 1996, The Hague in 2000 and Bonn in both 2001 and 2017?” “What’s your point?” said the chairman. “Oh … no point,” I lied. “Hmmm,” hmmmed the chairman suspiciously. “Anyway, even if it’s going to be 24/7 nose to the grindstone, it’ll be nice to get out of the rat race for a bit.” “You and I may have different definitions of ‘rat race’,” I said.

“Still, go on then – what’s been so terrible about your life of late?” “Just that blessed new FCA consultation on sustainability disclosure requirements,” the chairman sighed. “Is it just me or does it read like the rules to a really confusing boardgame? ‘Meet five overarching principles and a set of cross-cutting criteria …’; ‘Pick from three types of sustainable fund labels’; ‘Work on two levels of disclosure’ …”

“‘Do not pass ‘Go’ and do not collect £200m in assets under management unless at least 70% of a sustainable-focused product’s assets meet a credible standard of environmental and/or social sustainability, or align with a specified environmental and/or social sustainability theme’,” I offered. “I know, I know – but, then again, don’t all consultation documents read like confusing boardgame instructions to a greater or lesser extent?

“What’s really confusing me, however, is why all this is discombobulating you so much.” “Hello-oh?” exclaimed the chairman melodramatically. “Asset manager here with ambitions to become a player in the environmental, social and governance investment space.” “First up, it seems pretty clear the regulator has decided this is now the ‘sustainable’ space,” I pointed out.

“First up, as I believe I may have mentioned before, if you’re not investing in sustainable businesses, then what on earth are you doing being a professional investor?” interrupted the chairman – [although he didn’t say “what on earth”]. “And what’s your second ‘up’?” “That while you may have ambitions to be a player in the sustainable, sorry, ESG space, presumably you aren’t realistically expecting to be a big player,” I said.

“And, if I’m reading the FCA document correctly, firms are exempt from the associated disclosure requirements if they have less than £5bn of assets under management in so-called ‘in-scope’ business. As I say, surely not in your wildest dreams would you expect …” “Well, I have to say that is quite a relief,” the chairman sighed. “I do so hate having things playing on my mind when I’m not working … networking – I said ‘networking’.”