This policy describes how environmental, social and governance (“ESG”) issues are incorporated into Havelock London’s investment approach.
Background
We make long-term investment decisions based on developing an in-depth understanding of a small number of companies. The primary objective of this is to deliver long term investment growth. We believe this objective is aligned to investing in companies with enduring business models, which provides a natural alignment on ESG issues. Our approach to responsible investing, however, seeks to recognise that ESG considerations can be highly subjective and acknowledge that it may, at times, conflict with our primary objective.
Policy
Havelock London will pursue a pragmatic and evolving approach towards incorporating ESG issues into our investment process, that recognises the complexity and subjectivity of such issues. Our investment process involves valuing a company over a ten-year horizon, which we believe provides a natural alignment between investment decisions and many ESG issues. We will actively avoid “Green Washing” our investment approach and recognise that we will not prioritise ESG issues at the expense of all other considerations. We do not market our funds as ESG focused, and we do not label them under the Sustainable Disclosure Regime.
Governance
We believe that well run businesses with effective governance are more likely to be successful.
- We will review every company’s governance arrangements before making an investment.
- We will seek companies where the governance demonstrates an alignment between shareholders and management.
- We will seek companies where Senior Management and Board have large ownership stakes, as we believe it promotes better alignment with shareholders.
- We will actively vote in company meetings, and not automatically follow management recommendations.
Social
We believe that companies with enduring business models that do not harm society are more likely to be successful.
- We will seek to understand every company’s business model before making an investment.
- We will seek companies where their continued operation is not threatened by the risks they pose to society.
- We will not invest in companies whose primary business is one of the following industries:
- Tobacco or vaping
- Gambling
- Pornography or adult entertainment
Environmental
We believe that companies that respect the environment face less disruption and are more likely to be successful.
- We will seek to understand the environmental risks present in every company before making an investment.
- We will seek to understand the “direction of travel” on environmental risks in every company and avoid investing in businesses that both harm the environment and are resistant to improvement.
- We will actively vote to support shareholder proposals on environmental issues, when we believe it will result in a better long-term outcome for the company.
- We will not invest in companies whose primary business is:
- Coal mining
- Coal fired power generation
UN Principles for Responsible Investment
In April 2024 we become UNPRI signatories. This policy is written to align our investment process with the six UN Principles for Responsible Investment.
Principle 1
We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2
We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4
We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5
We will work together to enhance our effectiveness in implementing the Principles.
Principle 6
We will each report on our activities and progress towards implementing the Principles.
Review
We review this policy on an annual basis.
Contact
Enquiries about this policy should be directed through our website which can be found at www.havelocklondon.com.