Investing in the future
Growing stronger together
Our responsibility is to protect and enhance the value of our investments over the long-term, with the ultimate aim of providing sustainable income for our members in retirement. Environmental, Social and Governance factors are a part of this.
Our beliefs about Environment Social Governance (ESG)
ESG is an important part of fundamental stock research, and a significant amount of a company’s value comes from intangible drivers, such as corporate culture, corporate strategy, management quality, and other factors such as relationships with suppliers and customers.
Analysis of how companies manage their intangible drivers can help make better informed investment decisions, which can contribute to a company’s earnings sustainability.
Our responsibility as investors
- Consider ESG factors into our investment decision-making across all asset classes
- Analyse non-financial factors to identify mispriced assets and to support better investment decisions
- Consider ESG at each stage of the investment process, particularly through due diligence prior to investment in a company or allocation to a fund manager
ESG factors considered
Consistent with our broader investment philosophy, ESG factors we consider tend to be of a medium to long-term nature, but may have an impact on the short-term earnings of a company. They can include
- Corporate governance
- Intellectual capital management
- Executive remuneration
- Human rights
- Occupational health and safety and human capital practices
- Innovation
- Research and development
- Climate change
- Reputational risk
- Transparency and disclosure
- Environmental performance management
- The social impacts of corporate activity
Approach to share voting and engagement
- Exercising our right to vote is one of the most effective tools we have for holding boards to account and encouraging good governance. This applies to directly held assets and those managed on our behalf by external investment managers.
- Equip retains the ultimate right to direct the voting of shares as it sees fit, with the ultimate test being whether it is in the members’ best interests. The principles and procedures applied to voting are detailed in the Fund’s Investment Governance Framework and related documents.
- We engage, where possible, with companies, policy makers and regulators to ensure that the concerns of asset owners and long-term investors are taken into consideration.