Investing with a focus on ESG
As part of the Capital A investment strategy, we believe that responsible investing is not only the right thing to do, but that effective management of ESG risks and opportunities is also an opportunity to create value. We pay attention to how our investment process can positively contribute to promoting greater responsible investment outcomes by reducing risks through our process of oversight, seeking control and greater access to underlying investee entities, both in terms of our due diligence process and how we manage and monitor our investments over time. We believe when our companies are successful in avoiding ESG risks whilst capturing ESG opportunities, they will outperform over the longer term.
The ESG considerations incorporated in our investment process are guided by the UN-backed Principles for Responsible Investment. The six principles of the PRI framework are:
- We will incorporate ESG issues into investment analysis and decision-making processes;
- We will be active owners and incorporate ESG issues into our ownership policies and practices;
- We will seek appropriate disclosure on ESG issues by the entities in which we invest;
- We will promote acceptance and implementation of the Principles within the investment industry;
- We will work together to enhance our effectiveness in implementing the Principles; and,
- We will each report on our activities and progress towards implementing the Principles.
Capital A incorporates these six principles in both the pre-investment due-diligence and post-investment monitoring. For pre-investment due diligence this effectively means ESG assessments are part of the due-diligence process and incorporated in the decision-making process before investing. As an active and engaged investor we also incorporate the management and signalling of new possible ESG risks into the post-investment monitoring. Effectively helping our portfolio companies with ESG related matters. By questioning or challenging them on possible material ESG risks and supporting them on the management of those. Furthermore, to ensure investment managers at Capital A adhere to the implementation and integration of ESG considerations into the investment acquisition process and the portfolio management, these efforts are also part of the non-financial performance criteria linked to the remuneration of these employees.
Because Capital A has less than 500 employees on average during the last financial year and given its size, Capital A does not deem it proportional to disclose information in accordance with article 4 sub 2 of the SFDR. In effect Capital A does not consider the adverse impact of its investment decisions on sustainability factors in accordance with article 4 sub 1b of Regulation (EU) 2019/2088 (SFDR).
For further information on Capital A’s ESG efforts, please refer to the Capital A policy for responsible investing.