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We look beyond ESG presentations. We are aware of a growing trend of “greenwashing” because it looks “good.” We dislike tick boxers. We always have. For us, ESG considerations are a basic operating system for any business that wants to survive, let alone thrive in the times ahead. Some managements may see it as a necessary evil (green washing) while those that are blessed with a long-term mindset will ably capitalize on the emerging opportunities taking their companies to the next level.

Each company is analysed differently because each company is unique in its own way. We access our network of analysts, industry specialists, and investors. We invest across sectors and undertake cross-checks and learn.

Our companies may be asset rich or growing, serving a niche. Some of our companies are leaders and have an advantage over the competition while others are challengers, going after an industry leader or even expanding the addressable market.

We Invest Across The Sector


A cosmetics company with ethics at its core and a strong growth trajectory

Warpaint (W7L) dates its origins back to 1992 when current CEO Sam Bazini and Managing Director Eoin Macleod started buying and selling close-out and excess cosmetics and fragrances. With its customers increasingly seeking a complete range of cosmetics, in 2002 the first brand (named W7) was launched – named after the prefix of the Company’s postcode in West London. This brand now accounts for over half its total sales.

From these beginnings Warpaint floated on AIM in 2016 and has enjoyed a strong growth trajectory, driven by increasing sales to UK retailers and internationally via local distributors or retail chains. It also owns the Technic brand which is sold in the UK and Europe with a major focus on the gifting market, largely for supermarkets and high street retailers. Smaller brands include Man’stuff, Body Collection and Chit Chat.

Warpaint has not implemented a price increase since January 2022 but is certainly enjoying volume growth. Moreover, it is benefiting from its greater scale, operational gearing, new product development and a change in mix (stronger everyday sales vs gifting) as well as weaker freight rates and more favourable US$ purchases. The US is also spearheading its growth ambitions.

Our investment thesis for Warpaint is simple. The original management team retain 50% of the company, so are highly committed to achieving success for all its stakeholders. By selling high quality products at affordable prices it has happy customers, it also operates in growth markets and of major significance it is currently enjoying an upgrade cycle in terms of consistently outperforming expectations.

Making the world better

Cosmetics brand Warpaint (W7L) is acutely aware of the need to contribute to society in an ethical and sustainable manner. The company is working with consulting group Planet Mark to measure and report against its Scope 1 and 2 emissions, as well as reviewing its onsite energy, water and recycling management.

No products are tested on animals and with ‘cruelty free’ in mind, Warpaint are members of PETA’s ‘Beauty Without Bunnies Program’. Warpaint remains committed to becoming an industry leader in sustainable products – the majority of packaging is recyclable. All new products are manufactured without parabens, with the goal of being paraben free in the next 12-18 months.

The head office is a ‘green building’ with an ‘A’ rated energy certificate and provides free electric charging points for employees.


Coats has honed its manufacturing excellence over the 250 years

Coats (COA) is arguably the best known company you’ve never heard of. It is the world’s largest thread manufacturer for apparel, footwear and performance materials so its threads end up in quite possibly the shoes or clothing you are wearing

Founded in 1755, it is the oldest company in our portfolio and to demonstrate its scale it currently has operations in 50 countries and employs over 17,000 people. The sectors it supplies include telecoms, energy, transportation and personal protection. Under the successful stewardship of CEO Rajiv Sharma, Coats has navigated life post the Covid pandemic – though there is still a backdrop of customer de-stocking.

Coats are the market leader in 100% recycled products and a significant cost savings programme (which is ahead of target) is underway to help boost its efficiency. The company is a highly innovative fabrics manufacturer and has moved 3 plants from the US to Mexico – a move which should benefit margins.

The capital allocation policy is such that investment will be made in: organic growth, supporting its pension scheme (which has moved from a large deficit to a surplus), to pay a progressive dividend and consider strategic acquisitions.

Sustainability remains high on the agenda and a number of initiatives are underway which include reducing waste to landfill and increasing the rate of water recycling. It is on track to reach net-zero by 2050.

Making the world better

Coats (COA) is a highly innovative company with a wide number of sustainable products on the market. To underline its ESG credentials, in 2023 Coats opened a new state-of-the-art ‘Sustainability hub’ in Madurai, India. This sits alongside its other facility in Shenzen, China and their combined efforts will help innovate new generation materials for sustainable sewing threads used in apparel, footwear and other performance products
As part of its sustainability objectives Coats has set itself a number of ambitious targets which it hopes to fully achieve by 2026. These include: a 39% reduction in Scope 1 & 2 emissions; the proportion of sustainable materials to increase by 29%; a 37% reduction in waste to landfill and a 14% increase in the rate of water recycling. Coats also remains committed to reach net-zero by 2050.

hVIVO is a niche tester of vaccines and antivirals of infectious and respiratory diseases.

hVIVO is a clinical research organisation in human challenge study clinical trials that large recognisable pharmaceutical organisations use to validate the efficacy of their vaccines and other antiviral products. After recent wins, the company’s unique portfolio has expanded to 11 human challenge models.

hVIVO’s expertise in challenge studies has come into its own in the face of the COVID-19 pandemic and, in October 2020, it secured a contract with the UK Government for the development of a human challenge study model for COVID-19. The company has successfully won contracts in other respiratory diseases and malaria – moving beyond COVID.

hVIVO runs challenge studies in London from its Whitechapel quarantine clinic, its state-of-the-art QMB clinic with its highly specialised on-site virology and immunology laboratory, and its clinic in Plumbers Row. To recruit volunteers / patients for its studies, the Company leverages its unique clinical trial recruitment capacity via its FluCamp volunteer screening facilities in London and Manchester.

Making the world better

After serving the country to conduct Covid vaccine trials, the company is evolving beyond the pandemic
Earlier this year it won a £6.8m contract with a leading pharmaceutical company based in Asia to test its respiratory syncytial virus (RSV) antiviral drug candidate, using the hVIVO RSV Human Challenge Study Model. The study is expected to commence in H1 2024, with revenue mostly recognised in 2024. RSV is the main cause of childhood lower respiratory infections and, globally, affects 50 million people annually, leading to four million hospitalisations and around 60,000 in-hospital deaths in children younger than five years old.
The company also announced another £5.2m contract with a global biotech company. The Phase 2a double-blinded placebo-controlled human challenge trial will take place at the Company’s specialist quarantine facilities in London.
hVIVO has three decades of experience and has inoculated over 1,600 healthy volunteers across 28 RSV challenge trials to date and the challenge trial data has already expedited the development of several RSV vaccines for a number of pharmaceutical companies.

Morgan Advanced Materials (MAM) plays an important role in manufacturing in a more sustainable world.

MAM are global manufacturers of advanced carbon and ceramic materials solving complex problems for their customers. The company’s product line includes high-temperature insulation products used to reduce energy consumption, electrical carbon, linear and rotary transfer systems used for transferring electrical energy in motor and generator applications, seals and bearings, ceramic cores, piezoelectric sensors and transducers, crucibles, and others. The company’s customers come from sectors including healthcare, petrochemical, transportation, electronics, energy and other industrial applications.

The transformation of the business in the past decade has helped it grow exponentially. MAM is well positioned in attractive, growing markets where differentiated products are valued by consumers helping them deliver strong organic growth.

Making the world better

The company is passionate about making the most efficient use of the scarcest resources our world has left to support the move to a more sustainable planet. They are constantly making investments in manufacturing processes and technology to reduce the environmental impact of their business and improve the performance of its products, to deliver greater environmental and safety benefits to customers.
Their innovation and products in clean energy and clean transportation will see strong demand in the coming years. They collaborate to evaluate and identify their progress in various projects to align with their goals and the use of Life Cycle Analysis is a key to their decision making. All conscious steps taken towards ESG has also helped them achieve a good ESG rating.

As one of the UK’s largest food businesses, the company owns some of the nation’s most loved and iconic brands.

Premier Foods trades from 15 sites, and predominantly operates in the ambient food sector which is one of the largest sectors in the domestic grocery market. Premier estimates that approximately 94% of UK households buy one or more of its products every year.

In July 2022, the company acquired The Spice Tailor, a premium authentic Indian and South East Asian recipe kit maker for £43m. The brand was complementary to the Group’s Sharwood’s and Lloyd Grossman brands and will benefit from Premier’s wide distribution network. In times like these, while consumers are conscious of what they spend in restaurants and takeaways, it seems Premier’s trusted and iconic brands including Mr Kipling, Bisto and Homepride continue to be in high demand.

CEO Alex Whitehouse has done a fantastic job since taking the helm and if the market fails to value the company properly, it may well fall into the hands of private equity.

Making the world better

Premier Foods helps consumers to lead a healthier and more sustainable lifestyle by creating foods that are rich in nutrients and more sustainable. They source their ingredients in a responsible manner to give consumers confidence that the food they buy is produced in the most ethical and sustainable way possible.
Having launched more than 40 innovative, better-for-you options, they are currently focusing on ensuring that each of their core ranges offer a plant-based alternative, to support consumers who are looking to transition towards more plant-based diets. Supporting a circular economy, currently 96% of all their packaging and 80% of their plastic packaging is recyclable with a goal to increase this to 100% by 2025. They reduce their environmental footprint through climate action, reducing food waste and maintaining high ethical standards across their supply chain. They protect natural resources they rely on by tackling the deforestation problem. Their sites have sent zero waste to landfill since 2016.

Strix is a global leader in kettle controls with a 56% market share.

Strix is the global leader in the design, manufacture, and supply of kettle safety controls complementary water temperature management components, appliances, and water filtration products. For over half a century they have used their presence for a greater good by constantly pushing boundaries to create and deliver the right solutions for the customers which are the most trusted and reliable technology in the world.

The wide portfolio of products and brands in various segments like baby care, food prep, controls purification, etc has featured in leading brands around the world. Whether it is a kettle, a formula maker or a water filter, brands choose Strix Technology because it is Safer By Design.

With their recent acquisition of LAICA in October 2022, delivery of record sales by the Aqua Optima brand for yet another year, Launch of the Halo Pure technology, followed by a contract obtained in China recently and the evolution of this technology to farming solutions for clean drinking water it has proved to be a year of significant incremental business opportunities and growth for Strix.


Making the world better

Strix is a company that is constantly designing and innovating sustainable technology for the future – their operations are strongly underpinned by their focus on ESG and sustainability. They strive to make the daily household better, safer, and more sustainable by developing technologies that not only meet the needs of the customers, but also offer simple and sustainable solutions to reduce water and energy waste.
They have reduced the consumption of water by 15%. Their innovative products help make it easier for everyone to drink water with their range of easy-to-use products, adaptable filtration solutions and innovative appliances in a better and more sustainable way. They have also managed to replace 580m single use plastic bottles with their filters. They continue to produce zero hazardous waste whilst recycling has reached a new record at over 98%. Their new Duality appliance will address £300m wasted on boiling excess water p.a. in the UK and a two second saving in steam switch off time would save 1% energy in the UK alone.

Victrex is an innovative world leader in high performance polymer solutions.

Victrex is an innovative world leader in high performance polymer solutions, focused on the strategic markets of Automotive, Aerospace, Energy & Industrial, Electronics and Medical. With over 40 years of experience, they develop world leading solutions in PEEK and PAEK based polymers, and selected semi-finished and finished parts which enable environmental and societal benefits for stakeholders.

Every day millions of people rely on sustainable products and applications which contain the polymers and materials from Victrex. Victrex is committed to bring transformational and sustainable products which address the world’s material challenges, every day with sustainability embedded in its culture thoroughly.

Making the world better

Victrex has been sustainability focused since inception and that continues. Their business offers sustainable products which are aligned to global megatrends: CO2 reduction through lighter and durable polymers. For example, replacing metal in aerospace, automotive and energy, with a typical weight saving of 60% and Co2 reduction. All of their UK electricity needs are from renewable sources.
With faster processing times compared to metal and recyclability potential, their polymers are tailored to support a greener planet, as well as enabling manufacturing cost savings.
Sustainable products are nearly 50% of the overall group revenues which is expected to grow to 70% by 2030. They have achieved an ‘A’ rating from MSCI – one of the benchmarks for ESG ratings. Even the big Apple has also included them in its Clean Energy Supplier programme.

Hill & Smith is an industry leading provider of highway safety products and services.

Hill & Smith (HILS) has three main business divisions: Galvanising services which increases the sustainability and maintenance free life of steel products including structural steel work, bridges among others infrastructure markets.

The Engineered Solutions arm supplies engineered steel and composite solutions with low embodied energy for a wide range of markets including power generation, rail, marine and housing. The third division is the roads and security arm which supplies products and services to support road and highway infrastructure including temporary and permanent road safety barriers.

The company was founded in Brierley Hill, in the West Midlands, by Edward Hill in 1824 but today derives 64% of operating profits from United States. It has truly changed with the changing times and continues to grow organically as well as bolt-on acquisitions.

Making the world better

ESG has always been a key facet for the company as it makes infrastructure more sustainable while increasing transport safety. HILS states “We recognise that climate change is a pressing global issue and as a company we are committed to promoting a sustainable environment and providing updates on our progress in doing so.”
In 2021 the group delivered its ESG strategy which identified seven priority areas, related action plans and metrics. This included the ambition to achieve net zero for its Scope 1 and 2 emissions by 2040 as well as a commitment to the Science Based Targets initiative (SBTi) to limit global warming to 1.5 degree Celsius.
In February 2022 a new Head of Sustainability was appointed and HILS is on track to deliver its SBTi targets ahead of schedule. Employees continue to drive local energy saving initiatives and explore green technology options to underpin its carbon reduction plans.

Hargreaves Services delivers a diverse range of services and has embedded asset value.

Hargreaves has three business segments: Services, Hargreaves Land and an investment in a German joint-venture, Hargreaves Raw Materials Services GmbH HMRS. The Services arm provides critical support to many core industries such as Energy, Environmental, UK infrastructure as well as certain manufacturing industries. The land arm is focused on the sustainable development of brownfield sites for both residential and commercial use. Finally, the HMRS business trades in specialist commodity markets and owns DK Recycling which is a specialist recycler of steel waste material.

With £18m cash and the NAV per share at 603p we believe there is further hidden value in its land bank.

It is worth highlighting some of the group’s defensive characteristics also – in the Services arm it has over 50 term and framework contracts, most of which have inflation related escalation clauses – giving a great hedge against the current high inflation environment.

Making the world better

Cognisant of the potential impact of its activities on the environment, Hargreaves has developed an ESG Cross-Business Working Group which is now well established. It has set out three key targets for FY 2023 (a) To reduce electricity and gas usage per office based employee (b) To improve the kilometres per litre attained by the haulage fleet (c) To reduce the idling time in yellow plant.
The above targets are actively reviewed and in 2022 it was pleasing to see Hargreaves was awarded a ‘Very Good’ ESG rating from Integrum ESG, an independent ratings advisor.
Several initiatives to reduce energy and waste are undertaken. Hargreaves also appointed a Waste Brokerage Manager to identify improved ways of recycling and disposing of all forms of waste in a more sustainable and environmentally conscious manner.

The PRI is the world’s leading proponent of responsible investment. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. At this moment, we are not members but we do recognise that applying these principles may better align investors with the broader objectives of society. The six Principles offer a menu of possible actions for incorporating ESG issues into investment practice and mention them alongside.

The UK Stewardship Code (“The Code”) was first published in July 2010, revised in September 2012 and January 2020.

It promotes effective stewardship in the UK setting out good practices for institutional investors and asset managers. Stewardship activities include monitoring assets and service providers, engaging issuers and holding them to account on material issues, and publicly reporting on the outcomes of these activities.

Sterling Investment Management Limited fully supports and follows the objectives of the Code, although considers that it is not necessary for the firm to be a signatory at this time. This decision is kept under review, and should circumstances necessitate it, we will announce a change.

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    The companies mentioned above are not a recommendation.

    The companies listed above represent a sample of our holdings and we encourage you to visit the relevant company websites for the latest and most precise information. Their mention here is for illustrative purposes only, to demonstrate our diverse range of investments. Any mention of any company should not be taken as a recommendation or otherwise.

    Over the last fifty-plus years of the Fund’s existence, we have invested in many companies across several industries. The companies mentioned above reflect our investments as of 23 April 2021 and are subject to change, anytime and without any announcement or notice, due to corporate activity or general portfolio operation.