Engagement Update - Compass

Our Castlefield fund range does not invest directly in Compass Group. However, our Castlefield B.E.S.T Sustainable Portfolio Growth Fund invests in Sarasin’s Food and Agriculture Opportunities Fund which does indeed hold a stake in the catering and support services firm. A Compass Group subsidiary, Chartwells, has been in the press in recent months over allegations that it has been distributing inadequate and incomplete free school meals packages to vulnerable families.[1]

We contacted Sarasin to discuss the matter and to their credit they emailed a detailed response to us within the hour. Their response outlined conversations that Sarasin have had with Compass, which they say has offered some reassurance that the company is moving in the right direction. Compass estimates that 2% of the parcels distributed had shortages and issues occurred due to a number of factors. For example, the company did not receive notice of the new lockdown and so had to mobilise quickly. In addition, they outsourced distribution to the local level, but this meant that there wasn’t the usual quality assurance that they’d had in place for previous lockdowns (where parcels had been created centrally). It appears that in the case of the incomplete boxes, the chef had insufficient supplies but decided to send out incomplete boxes so that the recipient families would have access to some food.

Compass is now requiring all food packages to be photographed before being distributed. Photos are sent to Compass centrally to ensure that standards are maintained. Food is also being ordered centrally to ensure that the correct items are being sent to families. Senior management and the board are committed to ensuring that no further problems arise.

Sarasin have assured us that they will continue to monitor the situation closely, as will we, to ensure that these standards are upheld. Given how important these food packages are to so many families, there is very little margin for error.

Written by Ita McMahon

[1] https://www.theguardian.com/education/2021/jan/12/not-good-enough-marcus-rashford-condemns-free-school-meal-packages

Please note that this article is intended for information purposes only and it does not constitute a personal recommendation or inducement to invest. In particular you should not consider this a recommendation to invest directly in any of the assets discussed in this article, as they may not be appropriate for your circumstances. This article is based on information that we believe to be correct at the time of writing but the accuracy of which we cannot warrant and may be subject to change. You should always seek independent financial advice first if you have any doubt that an investment product is suitable for you.

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