Our approach to responsible investment
As long-term investors, we uphold the highest standards of responsible investment, guided by the principles of human rights, environmental stewardship and adherence to international norms.
We will not invest in companies that have frequently bent the rules to their advantage, or where the business model has major challenges or flaws. We believe this helps to reduce risk – we have no interest in owning poor-quality companies and do not believe that there is a price for everything.
Stewardship¹
Stewardship is at the heart of our approach. We recognise that our investment activities can have an impact on society and the environment, and having good managers and leaders in place is the best way for companies to address the environmental and social concerns they face – it is a part of good governance.
Team approach
We believe it is everyone’s responsibility to think about sustainability issues during their daily decision-making and interactions with company management. Our analysts engage with company engagement as part of their responsibilities.
Since 1988
We believe that sustainability issues are effectively the same thing as investment issues – and the challenges and opportunities arising from them can have a significant impact on how well a company performs in the long run. We have been consistent in this belief since the team’s establishment in 1988.
1 The use of investor rights and influence to protect and enhance overall long-term value for clients and beneficiaries, including the common economic, social and environmental assets on which their interests depend.
Exclusions policy
In seeking quality companies, we first remove the businesses we would not invest in. While some are screened out by FSSA’s exclusions policy, most companies are excluded through the team’s research and comprehensive understanding of company histories and any issues they may have encountered.
Please see our exclusions policy for more details of our exclusions and additional screening criteria.
Sustainability analysis and corporate engagement
Sustainability analysis is at the core of our investment process. Our analysis considers risks from the perspective of owners, employees, suppliers, customers and society at large. Using this framework, each company is benchmarked against its peer group on a range of environmental, social and governance metrics. This assessment forms the baseline for our sustainability analysis and highlights any gaps which may require further engagement.
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Stewardship and proxy voting
We engage regularly in constructive discussions with company management to add to our research, raise concerns and share our views on sustainability matters. We also vote on resolutions that companies propose to their shareholders. We believe this is a critical part of our stewardship duties and, ultimately, adds to our long-term performance
Our proxy voting record can be found on the First Sentier Investors website.
Climate change and the environment
Climate change is a key consideration in FSSA’s investment process. We accept the evidence of climate change and the need to reduce greenhouse gas emissions globally. We consider it our duty to assess climate-related risks and opportunities in our investment decision-making and ownership practices.
Read more about how we manage climate risks and learn about our decarbonisation targets in our climate change statement. Our portfolio carbon footprint is available quarterly and can be found here.