We actively engage with company management, both during our due diligence process and on an ongoing basis. We aim to assess whether the management shares our views on the trends we identified during the Immersions research process. We also consider how the management is positioning the company to capture those trends.
We commit to exercising our voting rights - proxy voting has to be a crucial element of responsible investing. But we also aim to go further in engaging with management around ESG principles, not least because of the potential for management actions to affect our portfolio returns.
The weaker a company's approach to ESG, the less attractive its valuation due to the impact on the risk-adjusted returns calculation. That, in turn, makes it less likely that we will invest our clients' funds.
During our engagement with managements, we make clear our investment thesis, testing whether it is corroborated by management. We also consider management's assessment of the major risks that we identify, and their attitude to monitoring and controlling these risks.