Our commitment to responsible investing reflects the individual values and goals of the families we serve and our commitment to creating positive change.
We believe that Environmental, Social and Governance practices and policies can help guide us in our effort to be responsible stewards of our fund clients and on behalf of our fund investors who have entrusted us with their investment capital.
Our Responsible Investment Policy underpins our investment risk management and opportunity focus and reflects our commitment to creating value for our stakeholders. Consistent with our goal of maximizing returns for our investors, Hlozek is a signatory to voluntary, industry-led initiatives, which help define and operationalize our ESG engagement efforts.
The Principles for Responsible Investment (PRI) is a UN-supported network of investors promoting responsible investment practices through the incorporation of ESG factors into investment decisions and active ownership. PRI defines stewardship as: “the use of influence by institutional investors to maximize overall long-term value including the value of common economic, social and environmental assets, on which returns and clients’ and beneficiaries’ interests depend.”
The Net Zero Asset Managers initiative is an international group of asset managers that support the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and support investing aligned with net zero emissions by 2050 or sooner.
We seek to invest in high quality companies with sustainable competitive advantages and clear growth potential.
Approach
As part of our investment process we assess a range of ESG factors, particularly climate change risk.
We think that climate change-related risks, in particular a company’s greenhouse gas (GHG) emissions, will have a material effect on a company’s long-term profitability, sustainability and investor returns. These risks include regulation, taxation, competitive disadvantage, brand impairment, financing, physical asset impairment and litigation.
Engagement
We actively engage on ESG to help us understand, quantify and influence a company’s exposure to climate change-related risks and the way it is managing those risks.
We require the companies in which we invest to:
- Disclose greenhouse gas emissions and reduction targets
- Make full annual disclosure to CDP ( www.cdp.net)
- Disclose a credible low-carbon transition plan consistent with the CA100 benchmark
- Reduce actual emissions at a pace consistent with the Paris Agreement
- Eliminate forest-risk agricultural commodity-driven deforestation activities by 2025
We will, to the extent possible:
- vote against directors where disclosure, plans, or actual reductions of emissions are inadequate
- file disapproval resolutions at AGMs where plans and plan performance are inadequate
Divestment
We will also evaluate divestment where a portfolio company refuses to disclose its emissions, does not have a credible plan for their reduction, or fails to commit to eliminate forest-risk agricultural commodity-driven deforestation.
Investor Reporting
On an annual basis, we will disclose to all our investors on how we vote and will report on the ESG performance of our portfolio companies. We will also explain to our investors the rationale behind our voting at portfolio company AGMs.