Investing Responsibly
Environmental, social, and governance? (ESG) issues affect the performance of businesses. Assessing ESG factors allows us to spot risks, anticipate forward trends, and inform our overall investment decision-making. Good ESG is good underwriting.
Doing the right thing has always played an integral role in our investment process. Sustainability is not always a win-win. There are trade-offs. We promote sustainable business practices in the companies in which we invest when they are beneficial to the business.
We rely on our own in-depth research focusing on ESG risks.
Governance
Is there an independent chairman; a majority of independent directors; sufficient shareholder rights; dual class stock; and an appropriate code of conduct? Is the Board skilled and sufficiently engaged in the affairs of the company?
Disclosure
Does the company produce a sustainability report and participate in the Carbon Disclosure Project (CDP)? Is the reporting thorough?
Employees
Is the workforce and management gender diverse; if no why? What are the safety processes and safety statistics? Is executive compensation performance based, and is it excessive? Do employees benefit when the business creates wealth creation of the business? Are there any concerns regarding forced or child labour?
Environment
What are the environmental risks and how are they managed? What steps has the company undertaken to reduce its carbon footprint? Are statistics verified by a third party?
Supply Chain Oversight
How broad is the supply chain and where are suppliers located? Does the company require suppliers to abide by good policies? What is the oversight process?
Litigation and Regulatory Action
Has the company faced any litigation and regulatory actions in the past 5years? What do those actions say about the company, its processes and compliance oversight?
Transition
What is the company doing to transition to cleaner energy? What is the company doing to transition to better water usage?
Timetable
We question managements on deficiencies found through our research. We push companies to cut their emissions to zero by mid-century, in line with the Paris Agreement of 2015. We do not invest if we believe the business models are not sustainable. And we push companies following each proxy vote against management.
We are able to manage client-specific restrictions in a customized mandate.