Stewardship and ESG integration
We are responsible investors and have integrated ESG analysis and company engagement into the investment process. We believe that relevant ESG factors highlight the sustainability of a company’s earnings and could generate a significant impact on investment performance.
We believe quality companies with better ESG credentials will generally merit a higher valuation multiple; conversely, weaker companies may warrant a discount. By evaluating ESG factors, we can assess what might significantly improve or indeed destroy the investment case in terms of future valuations.
On the other side of the equation, being responsible investors means that we are responsible owners. We consider every company meeting as an opportunity to engage with management and we take our ownership responsibilities seriously. We engage extensively with companies to share best practice and influence behaviour on material issues.
|Countries/regions visited in 2022
|China, Hong Kong, Australia, Egypt, United Arab Emirates, Germany, Indonesia, India, Japan, Singapore, Taiwan, Mexico, United Kingdom, United States
|Number of meetings
Climate change statement
At FSSA, we have always believed that sustainability challenges and opportunities are a core part of investment fundamentals and can have an outsized impact on a company’s returns. We actively seek to invest in businesses whose sustainable practices and products are able to meet the world’s changing expectations.
This matters to us because as long-term investors, we expect that companies will have to bear the costs of meeting these challenges over the course of our ownership.
Key climate-related risks in our portfolios
How we identify these risks
How we manage these risks
We believe that a strong commitment to stewardship is an essential component of a strong approach to responsible investment, and that embedding responsible investment into the core of our investment activities is in the best long-term interests of our clients. For more than a decade we have systematically and progressively improved our practices and processes across our investment capabilities globally.
Proxy voting rights are an important asset for listed equity investors and exercising these rights is a core part of our stewardship responsibilities. We seek to vote on all possible resolutions at company meetings. Prior to voting, we consider each resolution against generally accepted corporate governance best practice guidelines and, where appropriate, seek to engage with company management before a potential vote against.
In addition, the team retains a selection of independent corporate governance research providers that advise on proxy voting matters, although we retain full control over final voting decisions. Where an issue is controversial or affects multiple portfolios, it will be discussed at team meetings before a decision is made.
Proxy voting history by type of resolution
The table below contains the proxy voting history for the team by issue type. The chart provides the same information for FY2022.
The chart below shows the number of times the team have voted in each region.
Proxy voting by region
The chart below shows the number of times the team voted in each region and the percentage of votes against management recommendations, against our proxy advisors' recommendation, or against both. The purpose of this table is to show the regional difference in voting patterns and governance concerns.
Proxy voting information is as at 31/12/2022
Source: First Sentier Investors / CGI Glass Lewis
(Source: First Sentier Investors Responsible Investment & Stewardship Report 2019)
Any targets (including, but not limited to, the net zero targets) on this webpage are based on (i) available information and representations made to First Sentier Investors by third parties, including, but not limited to, portfolio companies; and (ii) assumptions made in relation to future matters such as the implementation of government policy in climate-related areas, enhanced future technology and the actions of portfolio companies. Such information and representations may ultimately prove to be inaccurate and such future matters may not ultimately be realised. As such, First Sentier Investors cannot guarantee the achievement of these targets. These targets are subject to ongoing review and may change without notice.
Any ESG related commitments, are current as at the date of publication and have been formulated by the relevant investment team in accordance with either internally developed proprietary frameworks or are otherwise based on the Institutional Investors Group on Climate Change (IIGCC) Paris Aligned Investment Initiative framework. The commitments are based on information and representations made to the relevant investment teams by portfolio companies (which may ultimately prove not be accurate), together with assumptions made by the relevant investment team in relation to future matters such as government policy implementation in ESG and other climate-related areas, enhanced future technology and the actions of portfolio companies (all of which are subject to change over time). As such, achievement of these commitments depend on the ongoing accuracy of such information and representations as well as the realisation of such future matters. Any ESG related commitments are continuously reviewed by the relevant investment teams and subject to change without notice.
To the extent this material contains any measurements or data related to ESG factors, these measurements or data are estimates based on information sourced by the relevant investment team from third parties including portfolio companies and such information may ultimately prove to be inaccurate.