As with any investment, your capital is at risk.
On behalf of Baillie Gifford, I would like to extend our welcome this evening. In previous years when I gave these opening remarks, the format was pretty simple. The template I used was along the lines of: “Hello, Baillie Gifford loves books, have a great evening.”
I hope that in years to come I can revert to that format, but for the purposes of tonight, I need to say something about how our fondness for books got us and the UK’s community of book festivals into a spot of hot water.
Sadly, this year, our sponsorship of 10 book festivals in the UK came to an end following a campaign by a group of activists. They said that Baillie Gifford’s investments in global companies like Amazon and NVIDIA, alongside a small number of investments in companies deriving revenues from fossil fuels, made us complicit in the war in Gaza and the climate change catastrophe. By extension, they said, the book festivals we sponsored and authors speaking about their books were also complicit.
In this discourse, the topics of Gaza and climate become blurred, and I think it is important to separate the two. On Gaza, the situation there is horrible beyond imagining, as were the 7 October attacks on Israel. But the idea that Baillie Gifford is somehow complicit because we invest in Amazon, whose products and services I’m confident 99 per cent of us in this room use, borders on the absurd.
The discourse around climate and fossil fuels is more nuanced. As has been noted in the press, the exposure our clients have to companies deriving some revenues from fossil fuels is a tiny percentage of the assets we manage and significantly below our industry’s average. But it is not zero. It is also much smaller than the amount we have invested in companies that are part of the solution to climate change. And so yes, we are implicated in the climate crisis, just as we all are in our daily lives when we drive somewhere, take a flight or use electricity from the grid.
But I’m not here to relitigate all this tonight. I wish to speak directly to the community in this room with a vested interest in the creation of exceptional literature and try to answer a few questions that might be on your mind.
For example, who the hell is Baillie Gifford, what on earth do we actually do, why do we sponsor literature, how did we get into this situation and what are we going to do about it?
So what is Baillie Gifford? Well, originally, there were two people, Carlyle Gifford and Col Augustus Baillie, who founded our company in Edinburgh back in 1908. Since I’m the only thing standing between you and dinner, I’ll skip over the next 115 years and fast-forward to the present. Today, we are a global asset management firm investing in growth equities all over the world, predominantly on behalf of defined benefit and defined contribution pension plans. If you are a normal human being, that last sentence will have meant precisely nothing to you. So, let me try to explain without the jargon of finance.
Savers all over the world have appointed Baillie Gifford to steward and invest their savings, normally their pensions. How many? A lot. Tens and tens of millions of people all over the world have entrusted us with over £200bn in savings. It’s a lot of money, and it belongs to a lot of ordinary people, saving for their future. We invest their money in accordance with their wishes. This might be into Japanese companies or UK companies or maybe our top picks of the best companies from all over the world. The companies might be traded on stock exchanges or still held privately.
Our job is to try to grow the value of these savings by investing in exceptional companies that we think can become worth much more in the future than they are today. So, while we are responsible for a lot of money, it is not ours. It belongs to ordinary people who have entrusted it to us. This word, ‘trust’, is central to our business. If our customers lose trust in our ability to invest well or act in accordance with their wishes, we will forfeit our right to exist.
So why do we sponsor literature? It was said by some over the summer that it was an attempt to greenwash, or book-wash, or some-kind-of-wash the Baillie Gifford brand, which in their eyes was tied intimately to the wrongs of the world. I happen to know this isn’t true, partly because I don’t think anyone at BG thought our brand needed washing and partly because I know that, for better or worse, we just aren’t that cunning.
Occam’s razor tells us that often, the simplest answer is the right one. The simple answer is that a lot of us at BG just really like books. If you walk around our office in Edinburgh, you will see most of us have a pile of books on our desks. And open any of the cupboards, and you are likely to brained by yet more books falling out. There is a high-brow truth to the links between our investment work, the question of building understanding in a complex world and the lessons we can take from the best literary non-fiction and, indeed, fiction. But there is a lower-brow truth, too. A lot of us nerd out on books. And so being able to dip our toe into the world of literature to support it in some small way is, for us, a privilege.
We are proud of the public spaces and forums we have financially enabled over the years, never once seeking to control anything that is said in these spaces. We take writers and their ideas seriously, respectfully hosting them in our offices to discuss their work, even – indeed, especially – when they have something to say that is contrary to our worldview. Authors will always find an open door at Baillie Gifford. Uncontrolled, uncensored, free spaces for open, generous discussion, the kinds offered by the book festivals we sponsored over the years, have never been more sorely needed.
So, how did we get into this situation? The fact is that anything that operates at a sufficient scale, touching enough people and businesses, in part, becomes a mirror for the world. Our long-term investment approach encompasses more than 1,000 companies and, we believe, skews us heavily towards businesses doing good in the world. But at the level of scale we operate at, purity is illusory, and there will always be some grey areas. We cannot offer purity, and we cannot place the agenda of campaigning groups, even those whose concern about climate change we share, above the interests of those who trust us with their life savings.
Our responsibility to the millions whose savings we manage runs deep at Baillie Gifford, and this responsibility will always come first and guide our actions. So, while we get real personal and professional value from sponsoring literature, if that involvement is made contingent on doing something against the interest or wishes of the ordinary savers whose money we look after, we will do what is right for our customers every time.
So, what can and can’t we do about it? With great sadness, the ship has sailed on our support of the book festivals that we have loved so much for so many years. Let me touch first on what we cannot do. There is no world in which we can meet the demands of those who want us to unilaterally divest all our customers’ money, without their consent, from anything related to fossil fuels or Israel. The campaigners who think there is leverage here are mistaken. There is no leverage. What is being demanded is something we cannot do without breaking the social and legal contracts with our customers or breaking the rules of the highly regulated markets in which we operate. The literary community must either accept us as you find us or not all.
So, what can we do? Well, we still support a range of literary charities, and we will continue to do so. And, of course, we still sponsor this wonderful prize. We began in 2016. 2025 will be the last year of our current agreement. All of us in this room are therefore faced with a question. Should Baillie Gifford continue to sponsor this prize?
Literary non-fiction has never been more needed than it is today, and this prize, the authors, the winners, the judges and organisers, the directors, have a vital role to play in helping us all grapple with this endlessly compelling, complex, constantly changing world that we live in.
The complexities and ambiguities of the world have no better manifestation than the best literary non-fiction. These complexities and ambiguities are also manifest in our business, but we believe the world is a better place for the existence of an award that recognises, celebrates and champions the best non-fiction. We at Baillie Gifford are, and will always be, open to ongoing challenge, debate and discourse. And, with your support, we would dearly love to continue sponsoring this magnificent prize.
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