Rathbones’ Harrison: ‘Three pillars driving sustainable change’

David Harrison, fund manager of the Rathbone Greenbank Global Sustainability fund, talks to Natalie Kenway about the fund’s three broad pillars, his buys and sells and his engagement success stories.

What are the key themes you are focused on for the Global Sustainability fund?

To us, there are three broad pillars driving sustainable change:

• Resource infrastructure – the energy transition, water infrastructure investment
• Wellbeing infrastructure – solutions that are improving better health outcomes – faster drug discovery, diagnostic tools and treatments in the areas such as obesity/diabetes
• Digital infrastructure – artificial intelligence and technology solutions

We think a multi-themed sustainability approach gives investors access to the most compelling long-term investment opportunities.

See also: Rathbones amends objectives on sustainable multi-asset to align with SDR labels

Have you made any changes to the portfolio this year? Can you explain your buys and sells?

We have been adding exposure to companies playing a critical role in decarbonisation and the energy transition. Here I would highlight Belimo, a Swiss company that makes highly energy efficient components for HVAC systems in commercial buildings and data centres. Its products are a relatively low value item in an overall commercial cooling system, but often the product of choice given their reliability and performance. Building emissions are close to 40% of global carbon emissions.

On the water infrastructure side, we added Veralto. Veralto is a global leader in water and product testing equipment.  It was spun out of Danaher and we think its high-quality portfolio, coupled with a strong management team, should make it an attractive long-term compounder.

We sold our holding in Littelfuse, a US manufacturer of circuit protection and safety products found in multiple industries.  We became concerned about longer-term growth prospects in several of the core markets.

What has been your best performing stock so far this year and why?

Accelleron, a Swiss company focused on turbocharging technology and services. They are one of the leading providers to the marine market, where turbochargers play a key role in reducing engine emissions. They are also seeing growing demand for power solutions in the data centre market. On top of strong demand, Accelleron benefit from a high degree of service revenue, which is a key strength in the investment case.

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Have you got any engagement success stories to share?

We would highlight two, both of which remain long-term engagements for us. We are leading an engagement group on Unilever’s healthy food strategy and seen success in several areas. Unilever has become the first global food company to report against six government-endorsed nutrient profiling models and set science-based nutrition targets for 2028.  

We have also been engaged with National Grid for several years through Climate Action 100+, focusing on its net-zero strategy, lobbying transparency, US gas decarbonisation, and UK grid infrastructure plans. Following our long-term engagement, National Grid conducted a review of its trade association memberships in 2024, finding that 31 organisations align and four partially align with its climate positions. The company has committed to engaging with the partially aligned associations to close the gap.

How are your conversations with clients on SDR progressing?

We have seen good engagement on SDR so far. We have been focused on explaining what the SDR labels mean and their importance and held a successful client event on the topic over the summer. We are already seeing some moves in the portfolio management side to adopt SDR into the construction of investment solutions. We expect this trend to accelerate into 2026 and feel Rathbones Asset Management is a strong position to help with this. We have six SDR-labelled funds in total, all backed by a common sustainability process.     

What are your thoughts on the ESG backlash? Are we turning a corner? What’s changed? 

I think we are going through an evolution in the ESG and sustainability market. We are still seeing strong interest in our sustainability products and ESG factors remain integral across our entire fund range. Regulatory changes such as SDR should remain a positive driver in raising ESG awareness, in my view. In specific markets, like the US, we are still seeing good engagement on ESG issues from the companies we invest in. Fundamentally the need to address ESG issues has not gone away.