Our impact

Alexforbes is on a journey to build a future for clients that delivers growth, inclusivity, and sustainability.

We will do this by pioneering insight to deliver advice and solutions that impact people’s lives. This means orientating our actions, decisions and intent to build a future that we can all connect with.

Our ambition to pioneer insight is driven by the conviction that knowledge is power. By harnessing our wealth of data, we empower decision-making for clients that will positively affect their tomorrows. Given the significant breadth of our consulting footprint, Alexforbes has the responsibility to ensure that the advice provided is of the highest quality to help clients navigate increased complexity, delivering long-term sustainability and value creation in the paths chosen.

As the largest investments multi-manager in South Africa, Alexforbes is in a position to amplify its impact on people’s lives beyond their financial circumstances. We will influence the asset management industry by setting demonstrable and pragmatic transformation and environmental, social and governance (ESG) requirements for asset managers, enabling greater relevance sustainably into the future. In delivering our advice and solutions, and through our engagements with asset managers and other service providers, we aim to unlock value by connecting and collaborating in groups to create more sustainable outcomes and security for our clients and members.

Our focus on ESG factors is critical to ensure we play our part towards sustainable economic development for our clients, business partners, investors and the South African society at large. This includes the expansion of our board charter to address climate risk and to enhance the group’s ESG ambitions and strategic intent.

We are developing a sustainability management framework to integrate and manage our ability to impact, initially taking into consideration two United Nations Sustainable Development Goals (SDGs) most aligned to our strategic intent, as well as five other SDGs where we have an indirect impact. We have also committed ourselves to these practices as signatories or members of the United Nations Global Compact (UNGC), UN Women’s Empowerment Principles (WEP), Principles for Responsible Investment (PRI) and the Code for Responsible Investing in South Africa (CRISA).

In delivering sustainable outcomes, we follow these core sustainability beliefs (including ESG considerations) by incorporating sustainability into:

• advice to ensure better risk-adjusted returns for our clients and members.
• investment advice and our multi-managed portfolios to ensure improved risk and returns to clients in the long run.
• our advice and intermediary services on long-term risk and healthcare insurance to improve long-term affordability and security of our clients’ risk needs.
• our intermediated discretionary financial solutions to improve the long-term affordability and security of our clients’ discretionary needs.

The holistic groupwide sustainability management framework is made up of five value drivers that are managed to deliver our purpose, vision and values. They are integrated with the growth vision, strategic objectives, the group scorecard and transformation framework. In addition to delivering on the group’s purpose, the outcome of the framework has a sustainable impact for our clients and members, and broader society supporting the UN SDGs.

These are the SDGs where we have the greatest impact and level of influence, and focus primarily on our client value proposition, as well as on our people who enable our success.

These are the SDGs where we have some level of influence and impact.

We are committed to building a diverse team to ensure that we can harness the benefits of diversity. Diversity and inclusion focus on inclusivity, co-existence and tolerance in areas such as gender, ethnicity, religion and generational differences.

We strive to ensure that women are treated with dignity and respect, enjoy their human and labour rights, and that their health and safety is protected. In addition, we aim to ensure that women have access to education, training and professional development opportunities.

We have a leadership commitment and support for gender equality and women’s empowerment. Key commitments in this regard include circulation of internal communications and formal acknowledgement of the relevance of gender equality and women’s empowerment.

In 2020 Alexforbes pledged its commitment to the United Nations Women’s Empowerment Principles (UN WEP) as an official signatory, joining 107 South African signatories and 6 713 global signatories. Further to this pledge we assessed our policies and processes against the UN WEP’s gender gap analysis to understand our current positioning on the gender parity journey and how to advance this agenda impactfully in Alexforbes and the communities where we operate.

We followed a conservative approach to the gap analysis: even where we knew certain practices had been applied or were part of processes, if the survey required such to be proven through a formal policy, we regarded ourselves as non-compliant.

The initial gap analysis confirmed us at Improver status, making progress on the gender equality journey and taking concrete steps to introduce policies and practices but still working on a strategic approach to implementing our commitment, measuring in more detail, and reporting progress.

As part of our ongoing focus to maintain the highest corporate governance standards and in line with the JSE Limited Listings Requirements, the group has adopted a diversity policy on the promotion of broader diversity at board level. The policy focuses on the promotion of the diversity attributes of gender, race, culture, age, field of knowledge, skills and experience. The board, with guidance from the nominations committee, has considered and applied the diversity policy in the nomination and appointment of directors. The board has determined specific targets for certain indicators.

As at 29 July 2022, Alexforbes met its target of 30% women at board level and has 60% black board members, exceeding its 50% target on race diversity.

As a service-based business, our direct environmental impact is limited, coming predominantly from our network of offices. Nonetheless, we strive to make the most efficient use of our natural resources. Our impacts lie in the electricity, water and paper consumed in our buildings as well as general office waste generated.

At Alexforbes we commit to performing our activities safely and managing our carbon footprint responsibly. We believe that businesses are responsible for their environmental impact and for operating in a sustainable manner.

We are therefore committed to reducing our environmental impact and continually improving our environmental performance as an integral and fundamental part of our business strategy and operating methods. We do this by monitoring our environmental impacts and striving to efficiently use natural resources in our network of offices.

Our impact is managed by the conscious use of electricity, water and paper, and processing of office waste. Our environmental impact is measured in relation to these categories and reported to and monitored by the setco. Measurement of water and electricity, diesel, paper consumption and waste recycling is limited to head office.

Our greatest opportunity to positively impact the environment is through our investing activities in which we invest the savings our customers have entrusted to us to administer and manage on their behalf.

As the custodian of our clients’ assets, we understand the sustainability imperative and the role it plays in improving our clients’ investment outcomes into the future. To this end, we believe that incorporating ESG factors into our investment and stewardship decisions will support our pursuit of enhanced, sustainable returns for our clients.

We have adopted a responsible investing (RI) framework that follows a beliefs, policy, process and portfolio approach that aims to provide our clients with a transparent and practical pathway to understand and identify where responsible investment considerations sit within our investment approach and how they are incorporated in our investment portfolios.

Our beliefs regarding RI outline the key considerations we believe can contribute to sustainability imperatives and better risk-adjusted returns for our clients. They are then distilled into an investment policy, informing our approach to RI – in accordance with best practice frameworks – and highlighting how active stewardship plays a key role in long-term value creation for both investors and the society.

Our investment process elaborates on the way in which responsible investment principles are applied and considered in our investment portfolios as well as how we actively participate in the support and improvement of RI practices within our appointed asset managers, the asset management industry and investee companies.

Our framework details our approach to investing, which aims to incorporate ESG factors, and broader systemic themes such as climate change, sustainable development and stewardship (including active ownership) into our investment decision-making process. Incorporating these factors enables us to manage risk better alongside our appointed asset managers and generate sustainable long-term investment outcomes.

As institutional investors, we have a duty to act in the best long-term interests of our clients. We believe in incorporating RI best practice in our investment process to achieve sustainable outcomes for investors. To this end, we have been a signatory to the Principles for Responsible Investing (PRI) for more than a decade and endorse the Code for Responsible Investing in South Africa (CRISA).

We recognise our duty to investigate the impact of ESG-related issues on the performance of assets and promote responsible benchmark-beating returns by ensuring that our selected asset managers consider and evaluate the risks and opportunities arising from the consideration and incorporation of ESG factors. As investors, we can influence the asset managers we appoint to apply sound governance and sustainability principles in their decision-making processes, such as those proposed in CRISA and the PRI and we encourage them to do the same with the companies they invest in.

For the 2021 reporting year, we maintained our strong rating and are proud to have scored above our global peers across most of the reporting modules. Overall, the results demonstrate our continued efforts and commitment towards ESG risk management and compliance with the spirit of the PRI.

• CRISA/PRI implementation
• PRI results

As a multi-manager, we do not have direct investment in companies. Indirectly we invest through our allocation of funds to asset managers. Therefore, the impact we have is through our approach to evaluating asset managers, which involves these four main areas of focus:

To ensure asset managers vote proxies in accordance with our requirements, we have developed a set of proxy voting guidelines. The guidelines are informed by the King IV Code on Corporate Governance which provides a philosophical framework within which we stipulate how an asset manager should vote proxies on our behalf. The fundamental purpose of the guidelines is to ensure that asset managers act in the best interest of clients. The main categories of resolutions covered and informed by the guidelines include board composition and directorship, environmental issues, remuneration and empowerment equity, among others. We monitor and assess the voting activity of asset managers at a high level on a quarterly basis to gain insight into the managers’ voting activities and to understand and evaluate inactivity on an ongoing basis. To access our proxy voting guidelines, click here. To access our proxy voting outcomes, click here.

Active stewardship and engagement are fundamental to our role as an asset owner and as a fiduciary. In our ambition to both create and protect long-term sustainable value, we believe that it is important to take stock of where we are as an industry today. This will help us to appropriately identify both risks and opportunities, respectively, into the future. In the spirit of providing meaningful insights and measuring our responsible investing efforts, we are proud to introduce our inaugural stewardship report. This report highlights key insights related to responsible investing and ESG integration in South Africa. These insights were gathered from the wide range of South African asset managers that were part of our engagements. They provide a detailed analysis of key ESG themes, risks and priorities that are paramount for the participating asset managers. The report also includes an overview of our responsible investing framework and our private markets ESG report where we showcase the impact we make through our private markets programme. We also demonstrate how we have incorporated certain ESG considerations into our portfolio solutions.

2023 Stewardship Report
2023 Stewardship Report – executive summary

Our commitment to transformation is deep rooted and extends beyond compliance with the broad-based black economic empowerment (B-BBEE) codes of good practice. Driving execution against our transformation vision is ultimately the responsibility of the group’s board and the social, ethics and transformation committee.

Transformation is a permanent item on the group executive committee’s agenda and is included in senior management’s performance scorecards.

Our transformation intent is supported by our sustainable transformation framework which includes the implementation of clearly defined objectives aligned to the amended Financial Sector Code (FSC), B-BBEE Act requirements and the UN SDGs. Consideration is also given to the material priorities, needs and concerns of our legitimate stakeholders as well as existing business activities and value offerings that can serve as instruments of transformation.

Having a lasting impact on society is integral to our vision. For us, it is about creating realistic, impactful and sustainable broad-based opportunities in partnership with those who have previously been denied such prospects.

Our B-BBEE scorecard verification is based on the amended FSC and has been certified by an authorised independent verification agency, AQRate Verification Services. This verification applies to all South African companies within the group. We have steadily improved our performance over the last decade and a half, moving from being a Level 5 contributor in 2007 to Level 1 in 2021 and 2022. This is testament to our commitment to the wellbeing of the society in which we operate.

Alexander Forbes Group Holdings Limited

• 2023 B-BBEE Certificate
• 2022 Annexure A
• 2022 Compliance Form

• 2023 B-BBEE Certificate

Alexander Forbes Group Holdings Limited

• 2022 B-BBEE Certificate
• 2021 B-BBEE Certificate
• 2021 Compliance Form
• 2020 B-BBEE Certificate
• 2019 B-BBEE Certificate

Alexander Forbes Investments Limited

• 2022 B-BBEE Certificate

Launched in May 2022, the Alexander Forbes Investments Transformation Policy (transformation policy) is the next step in our journey to create realistic and sustainable opportunities that extend beyond compliance with the broad-based black economic empowerment regulatory requirements. In this respect, we have taken a deliberate approach to incorporate a much broader view of transformation that integrates it more fully into our business value-creation model, including the acceleration of our transformation intent through our investment approach.

There is significant evidence that diversity is strongly correlated with improved risk-adjusted returns. Our transformation policy and its supporting principles are grounded in our belief that more diverse teams will deliver superior long-term investment outcomes for clients.

The inaugural Alexander Forbes Investments Transformation Policy focuses particularly on the investment management industry and the activities of Alexander Forbes Investments in support of the group’s overall commitment to transformation. The policy works alongside our asset manager research function, which focuses on the investment process and philosophy to ensure that it all aligns with our clients’ requirements. Furthermore, the policy pledges our commitment to working with all asset managers in our value chain to ensure that they understand our requirements and work with us in collectively shaping the industry to embrace a more inclusive and competitive asset management industry.

Our transformation principles intend to operate within the best interests of our clients’ goals and objectives in mind. We believe that partnering with the best buy-rated and diverse investment teams can help to achieve better and more sustainable investment outcomes.

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