The Board believes that integrating environmental, social and governance (ESG) best practice into the Company’s strategy, operations and the Manager’s investment processes will help to generate strong, sustainable, returns for its shareholders and investors over the long term.
As long-term investors, the Board considers that it is mutually beneficial for the Company and its shareholders and the management of investee companies to have a relationship based on accountability, engagement and trust. In so doing, it helps to enhance the long-term value of the Company’s investments and to protect its interests when necessary. The Board monitors its Manager, Aberdeen Standard Investments’ (ASI), commitment and adherence to ESG factors on a regular basis. In particular, ASI provides the Board with regular reports on engagement undertaken with the management of investee companies to discuss and, where appropriate, improve compliance with ESG principles.
Embedding ESG into the investment process
ASI selects and manages investments by embedding ESG into its process in 4 key ways:
- Assessing risk and enhancing value – a core element of the ASI investment process appraises environmental, social and governance factors with the aim of generating the best long-term outcomes for the Company’s shareholders.
- Researching companies - ASI conducts extensive and high-quality fundamental and first-hand research to understand the investment case for every company in its global universe more fully. A key part of the process involves focusing its extensive resources on analysis of ESG issues.
- Rating company ESG credentials - a systematic and globally-applied approach to evaluating stocks allows ASI to compare companies consistently on their ESG credentials – both regionally and against their peer group.
- Corporate engagement – ASI actively engages with investee companies to maintain or raise their ESG standards further and to deliver long-term, sustainable value consistent with the Company’s investment objectives.
The Board also supports ASI’s commitment to, and participation in, framing policies, regulations and industry standards with the intention of delivering a better future for the Company’s shareholders, the environment and society.
Further details on the Company and its approach to ESG will be set out in its Annual Report when published shortly. There are also details of ASI’s approach to responsible investing in the link above, as well as to its latest quarterly ESG reporting.