In our last blog  – which can be read here; we announced that Fundamental Asset Management is now a signatory to the Principles for Responsible Investment.

In further recognition of the growing importance of Environmental, Social and Governance (ESG) issues, we  are producing a series of Blogs titled ‘AIM for Positive Impact’ highlighting the initiatives being made by our AIM portfolio companies in addressing ESG and related matters.

First up, long term portfolio holding James Halstead.

Flooring -Everyman Theatre, Liverpool, UK

AIM quoted flooring manufacturer James Halstead may not immediately strike you as a business with impressive ESG credentials, but its website is an ESG-conscious investor’s dream. From the opening page, which highlights the benefits of its flooring in sectors such as healthcare and education, through to its easy to find links to Corporate Responsibility and early mention of “Corporate governance and corporate social responsibility” in the company’s annual report, James Halstead is visibly sustainable.

Chairman Anthony Wild has commented how the company’s recognition of its responsibility towards good corporate governance has contributed to its ability to deliver long-term shareholder value.

James Halstead has produced an annual sustainability report for 16 years, highlighting how far ahead it is of some of its fellow AIM-listed companies that are yet to produce one. It therefore comes as no surprise to see that Polyflor, Halstead’s main brand, is the industry leader from a sustainability perspective, with harvested rainwater being used for production as far back as 1915 and recycling vinyl since they pioneered it in 1950.

Polyflor was also an early adopter of BRE with products first assessed on a Life Cycle Analysis in 2005. They were also the first commercial flooring manufacturer to achieve the BRE’s standard for Responsible Sourcing, BES 6001, for many of its products. There were other firsts, including being the first flooring manufacturer to achieve GreenTag LCARate certification and being the first flooring manufacturer to roll out a recycling initiative inclusive of site collections and distributor dropoff sites to suit all customer and waste volume requirements.

The 2021 Sustainability Report also commented on a further reduction of their carbon footprint, by increasing renewable electrical energy consumption to 100% from 93%, as well as reducing CO2 emissions by 29%.

It just goes to highlight for how long concerns about the environment and our impact upon it have been around. Perhaps a hundred years ago investors may have been primarily concerned about the bottom line, but today’s investors increasingly demand any company to be visibly sustainable. As James Halstead demonstrates, doing good is not only the right thing but is good for business too.

Although it’s not all good news on the ESG front, with a distinct lack of diversity to the James Halstead Board of Directors, so something to improve on!

To find out more about the benefits of investing in AIM, please speak to our Business Development Manager Jonathan Bramall via email [email protected]  or phone 01923 713 894

Our upcoming webinar will review the second quarter of the year as well as discuss our ESG and PRI developments. For more information on investing in AIM shares for Inheritance Tax Planning purposes.

This video presentation here also provides a brief introduction to the Fundamental AIM IHT portfolio service. 

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We have been keeping a close eye on the reaction of AIM companies to the increasing ESG demands of customers and investors.

This week brought news of initiatives from two AIM companies which highlight the growing focus on ESG from the AIM community.

Science in Sport (LON: SIS), the premium performance nutrition company serving elite athletes, sports enthusiasts and the gym lifestyle community, announced its first major launch of an environment-friendly pack.

Science in Sport has invested in packaging technology and plan to convert the bulk of its protein powder range into recyclable pouch packaging, this being a first for the sports nutrition industry globally.

The PhD Nutrition pouch range will move to recyclable material, with a full range change completed in early 2021. In the last 12 months, PhD Nutrition has filled 700,000 pouches which have ultimately gone to landfill.

We commend the initiative of this small AIM company but also find it somewhat worrying that PhD will be the first sports nutrition brand in the world with packaging which can be recycled. Furthermore, this approach will only be rolled out to the Science in Sport brand later in 2021.

The new pouch is the first step in the Company’s strategy to minimise waste and the negative impact on the environment. Initiatives to support the recycling of gel and bar packaging are expected to commence in 2021.

We have never been tempted to invest in Science in Sport, which has been unable to make a profit for many years, and the shares continue to languish 45% below the June 2013 AIM listing price. However, it’s a credit that a small struggling AIM company has taken the initiative on this matter, although not before time given all the discarded SiS pouches one comes across!

Stephen Moon, Science in Sport’s Chief Executive Officer, commented:
“We take our ESG strategy very seriously and are in the process of introducing wide-ranging measures aimed at reducing the environmental impact our manufacturing footprint, brands and products have on our planet. The introduction of a recyclable pouch is the first of several initiatives over the short and medium-term.”

We hope they are rewarded for this initiative, as shareholders could also do with some encouragement.

Inspecs Group (LON:SPEC), the designer, manufacturer and distributor of eyewear frames, a relatively new addition to AIM in February this year announced news of a new ‘house brand’, made from fully sustainable and recycled materials.

The new brand is due to be launched in 2021 and is in line with its continued ESG improvement policy. This is another great initiative which we hope will go down well with customers, however, it would be helpful if Inspecs could elaborate on the ESG improvement policy referred somewhere on its website.

ESG investing is an undeniable and perpetual growth story which is not slowing down and is expected to be a significant part of financial advice in the future.

How does AIM perform against ESG principles and what opportunities in ESG does AIM have to offer?

Please try and join us at 2pm on 24 November for our webinar, ‘ESG & AIM – do they mix?’  You can register through the link here