As defined by UNPRI, it is a strategy and practice to incorporate ESG factors in investment decisions and active ownership. Making responsible investments has many ways.
ESG incorporation
ESG issues can be incorporated into existing investment practices using a combination of three approaches: integration, screening, and thematic.
Integration - Explicitly and systematically including ESG issues in investment analysis and decisions, to better manage risks and improve returns.
Screening – Applying filters to lists of potential investments to rule companies in or out of contention for investment, based on an investor’s preferences, values, or ethics.
Thematic - Seeking to combine attractive risk-return profiles with an intention to contribute to a specific environmental or social outcome. Includes impact investing.
Active ownership
Investors can encourage the companies they are already invested in to improve their ESG risk management or develop more sustainable business practices.
Engagement - Discussing ESG issues with companies to improve their handling, including disclosure, of such issues. Can be done individually, or in collaboration with other investors.
Proxy voting - Formally expressing approval or disapproval through voting on resolutions and proposing shareholder resolutions on specific ESG issues.
At Telligent, integrating ESG into our investment analysis is only one part of the responsible investing process. As signatories of the United Nations Principles of Responsible Investment, we adopt a principles-based approach to ESG matters. We invest responsibly by developing:
Exclusion list - We take a principle-based approach and exclude industries and companies we regard as unsuitable because:
Risk of regulatory exposure
Risk of stranded assets
Negative social impact
Stakeholders and governance concerns
Materiality analysis:
Fundamental expertise with a deep understanding of Asia
Analyze industry and company-specific risks
Recognize and incorporate evolving trends
