Infrastructure | LGPS Institutional Masterclass
1 month ago
Do asset owners and fund managers have aligned views when it comes to active ownership; and if not, what happens when there is a dispute? On the panel to discuss:
Parts of this discussion:
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Mm. Hello and welcome to asset TVs. Masterclass with me, Mark. In this program, we are looking at active ownership and engagement. Do asset owners and farm managers have aligned views on this? And if not, what happens when there's a dispute? Well, to discuss that I'm joined now by three experts in their field. Let's meet them. They are sorry to goes Ronnie. She is the head of S G research at XPS Pensions Group. Chris I go Chief investment officer for Core investments at AXA Investment Managers. And John Bates, head of emerging market credit Research at Pine Bridge Investment. Mhm. Mhm. No. Yeah. Mhm. Well, those are our panel. Let's let's start by talking to our fund managers. Chris, I go. Can you tell us a little bit about how active ownership and engagement fits with your role as chief investment officer? Yes. Hi there. Um, our policy, our ambition is to is to make all of our fund range in our mandate e s g compliant over time. And that means not only having an investment process that is geared towards selecting what we think are the best in class security is to invest in it also means engaging with companies to understand their strategies, their ambitions, how they're going to meet some of the environmental, social and governance goals that were increasingly setting for them. The John Bates is head of emerging market credit. How much time do you spend thinking about DSG within your particular area of investment expertise? Well, increasingly more time, actually. Um, and as time goes by, I think it's it's becoming more of a dominant part of the of the investment management role. Um, so we we we we have a team of, of, of corporate credit analysts and solvent analysts. Um, and as we engage with our clients, um, the demands from clients to be more sustainable, um, and also from regulations that are coming through mean that were increasingly becoming more astute to these requirements and the tool kits that we need to do that we're becoming more, more mainstream and more more focused on sustainable investment and engagement. So the whole concept of of active management, um, and how we report that back to our clients, um, is really becoming an integral, integral part of our of our lives. And sorry to tell us a little bit about your role because you're sat on the one hand, we got asset managers talking to asset owners and then asset owners talking back. Yeah, exactly. So my role is very much in the Indonesia re to bring, um, you know, the requirements and demands out of our pension scheme clients back to investment managers. And also just researching, um, what investment managers are doing in the states, how they're developing their products, how they're incorporating this CSG sustainability stewardship back to our clients. Um, and I think the regulatory demands are driving a lot of this as well. And it's really just reflective of just how important the topic is, Which is why I think the regulations are ramping up more and more. So, um so, yeah, a lot of my time is spent between between the two parties trying to get some level of cohesion in the demands and and the supply in some sense. And sorry to In your answer, you mentioned regulatory requirements that are coming along. How how big is that burden coming from? Regulators particularly comes to asset owners. Yeah, So we've been in the last year had the regulations come through where pension schemes need to start reporting the voting activity and engagement activity, um, producing implementation statements that go into the annual report and accounts. Um, and this is it's a great starting point in terms of, you know, making the activity, um, measurable, monitored on a regular basis. However, um, from pension scheme perspective, getting the level of data that was required, I think in the early stages was a little bit of a burden. I'm not sure if the investment industry was fully ready to cope with it, but I think as time evolves and now that we've been to the first kind of, um, evolution of how that data is collated, the level of detail needed, things will start to progress. And, um, it is it is good because it is starting to hold, manages to account. I mean, that's just a starting point, and I expect that over time this will progress. I think one thing to point out as well is that fund managers currently provide data at firm level and getting the data specifically fun, fun specific data has been a little bit of a challenge. Um, and that's really what's important for for trustees. You know to understand exactly what is happening within their specific assets rather than at a firm level. Um, so I think that's a bit of a challenge that's come through from from the regulatory requirements. Well, let's pick up on that theme of the extent to which the asset owners is developing their own views of, uh, active engagement and, uh, active ownership. Cristina and your experience, our asset owners, policymakers or policy takers from fund managers. When it comes to this area, I think it's a combination of both. I work for the asset management part of the AXA Group, which is a big asset owner, and the extra group has committed itself to being very active in terms of engaging with the industry and with its asset managers. So it's a member of the asset owners. Net zero alliance, a member of the Carbon 100 Club and because it has a big balance sheet and AXA investment Managers managers part of that balance sheet, it's incumbent on the asset manager to manage support for those in line with the ambition of the asset owners. So they do tend to set the broad framework of the policy environment in terms of exclusion policies, but also in terms of things like carbon reduction targets. MM and coming back to Caritas Challenge there. Chris, are you able to break down issues around ownership and engagement carbon footprints down to the level of the portfolio? Or is it much more at the level of AXA as a group overall? No. We're able to do it at the portfolio level, and that takes many different methodologies. I mean, we have a comprehensive set of data that covers all. The most of the issue is that we we invest in that allows us to build from the bottom up and s g profile for every single portfolio. Were increasingly working with our institutional clients to have a forward looking approach as to what their portfolio will look like in 5, 10 or 15 years time, particularly around environment issues. By taking a look at their exposures today, trying to understand the pathway that those assets are on in terms of carbon reduction, again as an example, and seeing how that portfolio contributes to the broader ambitions, whether that's to have a certain reduction in carbon emissions or whether it's some other kind of social metric. Yeah. John Base. What's the story at Pine Bridge? Are you able to break all this data down at individual fund level? Uh, no, not quite. No, we're not quite there. Um, and there's several reasons for that. We've sorry to mention some of the some of the data finding can be a bit of a challenge. Um, and I work in an emerging market, the income group. And what we found actually is, um, the data is quite inconsistent and quite incomplete in many cases. Um, and that has been one of the challenges. Um, but what we what we what we are doing, um, you know, it's it's definitely an evolution of the process. Um, and it improves very quickly each year as we go forward. Um, but obviously, you know, as as stewards of our of our clients capital, um, there's a lot of different tools employed in his suspension. You know, there's there's hundreds of hundreds of different ways of finding out the data, so we have the very, very bottom end. We have our credit team specifically looking at individual issuers, and we have, um, in depth analysis of, of all the publicly available materials. Detailed fact finding. Um, then we can start with experts. We bring in external data sourcing, um, of third party data. We look at all of our own proprietary analytics. And then this whole idea of the active management kicks in with engagement with the with the issuer's engagement with with industry stakeholders, Um, and all of that filters, then down to, um, the whole framework that allows us them to dis sonic whether we're investing, whether we're not investing, whether we're holding or or indeed whether we need to escalate anything specific with an individualist When when you were always up together, um, you have a framework that's actually sounds awfully complex. But in reality, um, it's a very, very kind of straightforward marriage to traditional credit fundamental model, which is then integrated with an E S g process. Because, John, just quickly, if client came to you and said, I really like the fund, but because of how we look at E. S g ownership and engagement, I can't invest in it unless you make the following tweak. And they're a big client. That dynamic gets put in front of you. You probably the salesman saying tweak it, tweak it. It's only a small bit of the fund. What do you do? Well, that's happening almost on a daily basis. Um, and you know, the the truth is is that, you know, there is, You know, there are things that we can do in order to satisfy the requirements of the clients and the regulations, and, you know, and again, this is this is an evolutionary process. A good example of this is this is the new S f d r. Regulation that's coming through, um, where where all of the asset managers are actually having to disclosed effectively, how sustainable, uh, their portfolios are. And their their processes are one of the key kind of elements. That was a bit tricky, whereas being able to prove and provide, um, records and data and reporting on, um on all of these kind of sustainable issues and whether our portfolio managers are actually bound by R. E s G process. Um, in other words, does R E s G process mean direct impact on our portfolios? I think it is serious. You were mentioning there. There's a lot coming from the regulator that's beginning to shape the views of a faster owners. But at this stage, how sophisticated are they in the round in how they think about DSG ownership, an engagement and as they gain more confidence? Are you seeing them becoming a lot more punch in their demands about what they want from fun groups? It's evolved massively over the last couple of years, and I think there's been a really big socialization of Y E S G and climate change issues are actually important, but not just important from what we need to do to help, you know, for for pension schemes have a world to retire into. So it's not just that element. It's about again coming back to that idea of generating sustainable long term returns. And I think the other element of this is that every investment manager is now in a position to be able to incorporate DSG and sustainability, but also actually talk about it. Um, and so from that firm and as owner perspective, understanding the kind of various approaches that there are, um, the elements of how each manager incorporate CSG stewardship is really, really important, which is which is what is driving a lot of these conversations around the demands and actually being more explicit and intentional in some sense, with their approach and going back to the point you made earlier streeter about wanting data at the fund level, How does that affect product that you can can or can't recommend to clients If, for example, we had X fund management and at the level of the group, all the data was there and it was wonderful, but it was kind of incomplete at the individual portfolio level. Could you then recommend it to a client? Uh, you know, our our approach is very much focused at one level, Um, and our due diligence is very much focused at any level. So what we want to see is the commitment at firm level actually filtering through down to fund level. We want to see your investment managers managing your assets. This specific assets of funds that you're investing in are very much aligned to that firm level commitment. So I think it's it's an element of greenwashing in some sense, um, you know, is a firm level philosophy actually followed through in practice, and so we wouldn't be able to recommend the fund just because the firm is, uh, is basically saying all the right things about DSG and sustainability. And on the flip side story, did you ever get asset owners who you put the short list together? Uh, then you come up with what you think is the fund they should have and they said and then at that point there suddenly less interested in the S G than they were. And they point to something that you've you've knocked out of the process that I want, that it's got better returns. Yeah, I guess it comes down to beliefs, investment beliefs. And what we we tend to do is set up at the very start. You know, what are your investment beliefs and what are your specific E S G beliefs? And it's trying to marry. Those two are, and I think it's really, really important to not, um, sacrifice other objectives just to kind of aim for a specific niche objective. So it's really key to understand exactly what the asset owner wants and then kind of bring the solutions that will match that not just trying to rule everything out or bringing everything into the mix, I guess. Thank you. Chris, I go. Is this field develops? Where does it impact investing fit into that? Is that the next stage along this this evolutionary journey we've been talking about? Yeah, it is, um and it exists already. There are strategies that can be classified as impact. But again, we have to go back to the interaction between the asset managers and the regulators. And as John mentioned the S f d r regime that's coming into play in Europe, uh, makes that more demanding. In a sense, um, they have these classifications for funds, whether it's a, uh an eight or 99 is quite demanding in terms of what you need to demonstrate you're doing in terms of your SD policies, but also how that has a genuine impact on progress towards uns dgs or or something. So I think it's harder to called something impact because the regulatory environment is becoming more demanding. But the philosophy is clearly to be able to show that when you're running an equity portfolio or a bond portfolio, the decisions you make the capital you allocate really has a genuine impact on some social factors or some environmental factors. Uh, and that I think is going to be a competitive part of the market, increasingly competitive part of the market. It requires again good data, good transparency. And I think going back to the kind of premise of of of the program as a whole, it requires a high level of of engagement with the businesses that you're investing in because you may have chosen a company on the basis of what it says it's going to do. You have to be very confident that you can measure the progress towards those goals over time. Yeah, Mm, we mentioned s FDR there, John Bass. What's what's been the Pine Bridge approach to that? And that's obviously something very specifically for the EU. But how? How is the thoughts and ideas from that? Um then bled out into other parts of the organization, even if its product that's not for sale in the EU. A lot of the process of discovering what was going on with the S f. P. R. And actually, it's the same for many of the other regulations that come through on a global basis, um, to our business, um, is ready to figure out how, how, how true um who, uh, R e s G philosophy are are individual investment teams. Um, and this is quite a tricky process. When, uh, you know when you have, you know, equities, fixed income, multi asset private funds groups, um, and, you know, over the last I'd say 5 to 6 years. Um, Well, five or six years ago, E s g wasn't really the coolest part of the the business being, um, now it very, very much is, um and there's lots of lots of different academic writings on on this, and also lots of people with a hands on the ball. Um, for S f d r. Specifically, um, we had to do a thorough analysis of how good our reporting, Um is, um and how and how and literally put an honest finger on how sustainable core strategies are. Um, and And to figure that out, you need to build a road map looking forward on a regulation that isn't necessarily, um, as clear as crystal. Um, and we we actually ended up going down Article eight for our for for the majority of our sustained of of our sustainable funds. Um, but we're already kind of at that process level where given that the deadline I think is next week and for signing off on that on that particular regulation, Yeah, We've been working very hard to get that, get that all together and get that fully documented. But it's been a very it's been a very, um, It's been a very involving process figuring out what the regulation means and figuring what we need to do who actually comply to those regulations. It's early days. I know, John. But do you have a vision of all of your funds, not just the sustainable funds getting themselves to level eight at some point? I mean, after all, if S g and, uh, engagement, ownership and all of that is mainstream, then don't you want to apply it across the board at some point? Yes, of course. Yes. And that's the ultimate goal is to have, um, the E s G process, a sustainable approach to all of our investments. Um, we haven't got a specific date setting in stone for that for the future. Um, but that's the That's definitely the way that we're heading. I mean, it's the way that the clients are heading. Um, it's actually, the way that most of our end, uh, invest the company's, uh, and governments are heading. Um, I would say that we're all we're all on the same path and the same journey. Um, try to try and find that that angle. Okay. Sorry to when you're looking at asset management firm some How concerned are you? Buy greenwashing by asset managers. How do you distinguish between those who are merely coming up with the right jargon and those who are actually doing the right things? Yeah, So there is. There is definitely a concern. And I think as regulations become more, um, in some sense, regulations can become prescriptive and then breathe some level of greenwashing as well. So I think we have to be very, um, you know, clear in our approach and how we look at funds. Um, I think it's really down to evidence robust processes that are followed, um, you know, are in place that are integral to the decision making within a fund. Um, you know where you're looking at PSG risks Are they fundamental to the process? And then I think from a stewardship perspective, you know, again looking at firms that have very focused priorities. So it's quality over quantity. You know, the number of engagements doesn't necessarily mean that you've had an impact. So how are you able to evidence the milestones that you're looking to achieve or are achieving? And so it's coming back down to this very tangible and way of being able to somewhat measure, You know, the activity of your asset managers, rather than the commitments and the intentions that are are their firm level. Um, and I think also increasingly, you know, looking for evidence where when you think about voting activity, which is also very key element, um, you know the reliance on proxy providers and how independent you are, how you're able to show a joined up approach between voting and engagement. So your portfolio managers or credit analysts, our analysts in general are talking to companies. Are they giving the same message that your firm is giving when they're voting? So it's a whole load of different elements, which is which is what makes it quite difficult. But we want to make the bar really high. Um, rather than kind of, you know, take boxing. Um, the different, um, commitments that farm has. Well, you're describing a process of checking on asset management That sounds pretty intensive in terms of its use of data and then people to analyze that, Um, how much more time consuming and expensive is it to an analyzer fund in this environment than it would have been five or six years ago? Well, I guess it is. It is resource intensive. However, you have to kind of look at it as the world changing and the kind of requirements have changed. The way you invest has changed. So it's almost as if I don't see that there can be a trade off between the resources required. Um, and kind of you can cut corners, of course. But to do it right, Yes, it's a bit resource intensive, but absolutely part of a process and has to be. And Chris, I wanted to pick up on something that sorry to alluded to that which is how you bring the stewardship side together with the the asset management. How do you go about uniting those cultures? Because certainly a few years ago, and I made this in very general terms, the there was a definite silo in asset managers that did E S G stewardship and all of that. And they were a very separate breed to the people that actually analyze the company's looked at the financials and made the investment decisions. Yeah, it's a good point. And last year we made the decision to, um, integrate all our BSG resources into our investment team So we don't have a separate Ri team any longer. Our SD analysts sit alongside our credit analysts in our in our broader research group that also houses are engagement professionals who worked very closely with the analysts to understand On what subjects should we be engaging with issuers? Because ultimately that feeds back into the portfolios and the concerns of the portfolio managers who themselves now have to meet, you know, e S G targets in terms of the management of the of the funds. So it's much more integrated than it was a few years ago. But to your earlier point, I think, uh, it has become more resource intensive meeting the S FDR requirements. Uh, there's there's There's further new requirements in France under the IMF regime. I'm sure that as the U. S. Cranks up its engagement with climate change and other other matters in the U. S. The demands are going to get even more as well in the UK we've got our own way. But in a sense, I expect us to follow the European model. So the pipeline is for even more demands from a from a regulatory point of view. Uh, as sorry to says, you know, we're not gonna be able to sell our services to pension funds if we don't meet their expectations. So we have to do it. Chris. I'd ask this of John, but this response to S f d r. How have you gone about dealing with that? Well, we had our own classification. I'm sure other asset managers did between what we used to call integrated and sustainable funds. We've kind of mapped them now to the articles eight and nine. There's a rump of legacy strategies that don't fit into either of those, uh, those categories and you know, with reference to John's high yield experience that you know, it's difficult to get full data coverage on some parts of the high yield and emerging market issue of community. But we're generally there were kind of about 95% I think, uh, in in terms of classifying funds as eight or nine, with most of them in eight. But a good, good proportion in article nine. Thank you, John. How do you go about incentivizing people in an investment team to take as much interest in non financial as financial data? It's a good question. And yes, I mean, a lot of the a lot of our kpi. S and and internal goals have changed over the last few years. The last two years in particular. Um, so there's there's a transition of the traditional investment being member from what was originally a bottom up fundamental credit analyst starting point to now becoming more of a sustainable SD type analyst as well. So, um, as as as Chris outlined, we have a very similar setup by marriage where we've we've basically put R E S G investment process right alongside the traditional credit fundamental investment process. Um, and they all feed into the same effective database, um, so that so that whilst an analyst is looking at things like financial leverage and balance sheet liquidity, working capital ratio goes at the same time as doing that they're also going through there that e s g checklists and providing their scores and recommendations. So the way that we're trying to do this is instill this whole culture. The culture should really be that any issues that want to successfully raise money in the financial markets will need to meet their these e s G challenges and the sustainable challenges and goals. Um, and so our engagement is very specifically targeted to ensure that analysts are, um, uh, really quizzing issues on their cost of capital and what they need to do to achieve decent cost of capital. So one of the examples is that the new issue primary market level, um, we're really scrutinizing. Um the issue is in terms of their documentation in terms of their transparency in terms of their carbon footprint. Um and then this has an impact directly on their on their capital and their funding costs. Um, and that's that's one of the kind of the biggest areas where we can actively engaged and actively escalate. Thank you, Serena. Final thought from you on this topic, you're out seeing fund fund managers, fund groups all the time. What are some of the really smart things you've seen maybe people's secret source, without giving too much about who's done what, but just in general terms. What are some of the really smart things that you've seen asset managers do that have been really big wins on this front? One really key point is, um, how, as the managers are incorporating, um, csgn stewardship across as a classes. So I think that's that's been growing massively and being able to really drive change within the, you know, in the in the, uh, infrastructure assets in real estate in fixed income. So, you know, when you initially think of stewardship and voting, um, it goes down to the equity level. How is that progress across the board? And I think to John's point, we've We've been seeing quite a few managers who have been working with the companies and looking to put in, um, specific covenants within, um bonds that are buying, for example, that are very much linked to sustainable goals and achievements. Um, and I think the other element which we're seeing a little bit of innovation in, is this idea of decarbonization portfolios and forward looking climate risk. So at the moment, a lot of the work or the data that's available. It's very much backward looking. So carbon emissions, carbon footprints, very backward looking. How do you look at what's happening? How is the company aligned to the Paris agreement? How are you able to incorporate that into your fundamental analysis? So I think bringing in the climate change perspective, uh, a lot of innovation media there because data challenges of massive overseeing managers really step up in certain areas. Yeah. Mm. Mhm. Sorry to on this point. Um, if you're looking for, uh, portfolios for clients have got perhaps at a lower level of carbon emission than the benchmark. Is there a danger that that's pushing your clients into, uh, all its new economy quality growth stocks? So they're not actually getting a portfolio diversified as they should be, And also that it means that capital is just avoiding companies that actually need support and help to reform. Yeah, Great question. Um, so I think there's two ways of looking at it again. Comes back down to the asset owners investment belief. So what they're looking to achieve And I think excluding stocks from a portfolio will give you an answer today a lower carbon footprint today. But our whole agenda is about driving this change and, uh, over time within the companies are investing in. So you really don't want to just exclude companies and then not have the ability to drive that change. So our we're able to accommodate all types of client requests, of course, and how we build portfolios. But I think incorporating emissions and exclusions to a certain degree for really combining it with the forward looking approach that I was speaking about earlier is really the way to go. Because that is then, um, aligning, allocating capital that will allow that change and drive that change. So it's a it's a fine balance. It's dependent also on, you know, kind of specific demands. But engagement is probably a better way to drive that change rather than kind of just sitting up on the outside on the sidelines. Thank you and John Bates just coming back to a point you were making earlier about issuing or borrowing money and sort of coupons that can step up if key targets aren't hit. Who decides whether a target has been hit or not? Because, presumably with all of this data, and depending on the time frames, if you get a smart lawyer or marketing person in that, you can make pretty much any case you want it, couldn't you? Well, yes. I mean, it needs to be very, very carefully set out in the documentation. And And, you know, as with all of these things with sustainability, one of the challenges is reporting and documenting and documenting, Um, in a very solid way. How these how these improvements have done over time? Um, but yes. I mean, I think I think one of the things that we've seen in in emerging markets recently is this whole concept of step up bombs. Um, where where a company beats, um, a climate related target by certain degree, which is almost like a guarantee of sorts that there actually are improving and improving trend. Um, I think we've also got to go right back to the to the to the kind of the fundamental analysis and the as the starting point. Um, and as as Serena said, what we're trying to do is just this improvement over time. Um, and so forward looking e s G trends are very important. Um Obviously, you know, a company with a really bad score shouldn't necessarily be excluded. It should be almost screened in if they are doing the right thing. And they are investing for the future, and that should then see. And that should then results in a score that's moving in the right direction. Mm. Okay. Um, Chris, I just picking up on on that point about how tough and enforce of fund managers can be. Um, what would you say to somebody says, I'm a bit skeptical that fund managers actually get that involved in the UK equity market. Not so long ago, we have the issue of housebuilders chief executives paying themselves huge amounts of money. Everybody said, Oh, it's an incentive plan we signed off on. But there's some pretty substandard housing and some terrible stories for clients coming out at the other end. And at that point, a lot of people in fire management said, Oh, there's nothing we can do about that. But we'll learn from it. Shouldn't there be a degree of skepticism that, uh, damages can make these changes at corporate level? Yeah, I guess there should be because, you know, history is littered with with with corporate wrongdoing, we don't need to look too far back to think about Volkswagen and the emissions scandal. Uh, there, for example. But that doesn't mean we shouldn't keep on trying. You know, we we we need to up the game. We need to ensure that we've got very clear and precise, uh, targets in mind When we engage with companies. We have to make sure that this is a dynamic process. It's no good just having a meeting with the finance director and then forgetting about it. This has to be an ongoing, ongoing process. But I think what's more important is that the culture within asset management is changing very, very quickly as a result of all these pressures. We I was just on a call internally yesterday where we're discussing a new training program for all our investment professionals, which will result in them being given the CIA s G certification. So it's a kind of professional budget of progress towards taking into account all these non financial factors in financial analysis or investment analysis at the governance level. Internally, I chair our investment governance community. We still talk about performance, and we still talk about value at risk. But we talk about meeting s G targets and whether a portfolio is holding stocks or bonds that is on our controversy list or on or doesn't meet our minimum s G standards. And that is actionable. That means that the PM has to do something about it. So it does change the culture both from a training point of view, a governance point of view and an understanding. I think that, you know, the long term philosophy here is good companies will deliver good financial performance. And we're focused on just a broader set of things that make that company good these days. Thank you for that. Sorry to in terms of where we are in this battle between engagement or divestment, it seems to me there's a lot more emphasis on divestment these days. A lot of portfolios that are in this space will typically say, you know, we don't invest in the likes of tobacco, arms, alcohol, um, things that profit from pornography. There's quite a chunk of the index that ESPN sustainable funds are avoiding today, whereas a few years before the focus was all on engagement. What for you is the distinction between a company that can be saved and one that's just beyond the pale. Yeah, it's an interesting question, and I think there's this awareness around E S G risks and in general, just around the topic has probably driven a lot of action from as owners that also possibly don't want to be aligned with the reputation risk as well. I mean, you know how and I think on on the back of that, the ability to make those changes has become quite more simpler. So the ability to incorporate a wide range of, um, of exclusions is becoming even easier for Chrissy's. Um, I think again, it comes back down to your beliefs, and I think it's it's very much about how far do you want to go from just exclusions and just not being associated with, you know, with the sins of the world? Or do you want to actually play a role in in making alcohol companies be more responsible in how they how they kind of, you know, uh, interact with their consumers? So it just comes all the way back down to the trustee. Beliefs are pension scheme beliefs, and and they're Like I said, I think there's a lot of solutions available now that allow the choice of how you implement that. They were almost like Somebody just want to follow up on on on that thought. Chris, I go this point about alcohol company. On the one hand, everyone says, Oh, they should, you know, sell alcohol responsibly. But on the other hand, everybody wants them to sell more alcohol because they make more money. Could you see a day where you were CEO of AXA? Tell an alcohol company it's selling too much? Well, you can probably see my war, and so I'm not sure that that's what you're dealing with. You're dealing with demand side problem there. Yeah, I don't know how that particular thing, I think you know that is going to depend on how society's values change and how that's reflected in our industry. But we're going back to that question of divestment versus engagement. I think it can even play out at the portfolio level because we have an exclusion policy, but that's fairly limited. It's it's really bad stuff, like palm oil and weapons, but within, you know, the mainstream investment universe, we could be looking at oil companies. You know, one asset manager may say, Okay, I'm going to exclude all oil companies because, you know, that's the bad stuff, But you engage with them. You try to understand what shells future policy is going to be in terms of their shifting to renewable energies. You have to engage. Otherwise, you're going to do a disservice to your clients because you may miss out on financial returns. Plus, you may be, uh, not doing one of the two things that we should do as investors, that is decarbonization portfolios. But investing in climate solutions as well. And the technology that is going to involve as these companies transition provides great opportunities, particularly the equity side. Okay, we are pretty much out of time. I just want to get a final thought from each of you. We We've gone through a lot of material today, but if there was one key point from it that you'd want to leave us with, what would that be? John Bates. Let's come to you first. Um, maybe I could just add to what? To what Chris just said just on the divestment topic. I mean, I think as investors, we, we, we we we do reserve our right to, um not to require or to divest any asset, fixed income equities that we we don't think it's right. Um, but where I think things have changed in the last few years is that now when we do that, we engage with the issuers and the issue as advisers and tell them that we have disinvested or we have reduced our holdings. And we told them why we've done it. Um, And again, this this comes back to this whole idea of trying to generate some forward looking change in momentum by which were actually contributing to the improving, sustainable story for all of our issues. Thank you. Sorry to final thought from you. For me. I think I'm really quite excited about the momentum that we've got going. Um, and I think there's a real opportunity at this point in time to really grab hold of the changes that are needed, and I think as owners are very much starting to get on board and pushing the agenda as well. So I think I think collectively there's a whole lot of change coming, which, and it's positive it sounds positive. Yes, there will be challenges. Um, but it's exciting and exciting time. Thank you, Chris. I go, Yeah, to me, it's the revitalization of active management. You can't meet the SG ambitions by running passive strategies. I don't think, but that active management has changed. It's not just about beating the benchmark, which was a pretty kind of narrow focus. It's about making a difference to your clients to their future wealth, but also to the future of the planet. We have to leave it there. Sorry to cause Ronnie, John Bates and Chris. I go Thank you very much for joining us from all of us. Here. Thank you for watching goodbye for now.