Our ESG Philosophy
Integrating ESG results in better investment decisions. We believe that incorporating material ESG considerations into the investment process can add value which can result in higher risk-adjusted returns for our clients over the long term.
Engaging with investee entities can be constructive. We recognise that responsible investing requires a patient approach and an understanding that improvement in corporate behaviour can support investor value over time. We believe that companies that adopt sustainable business practices are more likely to deliver superior value in the long-term.
Active Ownership is preferable to exclusion. We believe that hard exclusions from our investment universe should be utilised as a last resort, where ESG risks are insurmountable or where continued engagement is considered ineffective. Rather, seeking change in corporate behaviour through engagement is more likely to have real-world impacts.
Transparency to our clients is important. We believe that providing transparency on our ESG activities helps our clients understand our priorities and impact.
At Eastspring Investments, investment professionals are responsible for incorporating all factors deemed to materially impact the investment decision making process. ESG integration is an essential component of our investment analysis process. Our integration guidelines include a focus on materiality and active ownership.
Listed Companies and Corporates
We seek to identify, assess, and monitor material ESG risks and opportunities. Investment teams integrate ESG issues with material impact on a company’s valuation, credit worthiness, and license to operate within the investment analysis, investment decision, and active monitoring of holdings. Through the ESG integration process, investment teams develop an informed and holistic assessment of a company’s exposure to and management of ESG risks and opportunities.
ESG is incorporated as a formal stream in our research program, where we conduct significant research on alpha signals, including those related to material ESG issues, using available historical data. We look to identify and validate ESG alpha factors that improve the returns of our strategies and ESG risk factors that may mitigate risk in our strategies.
ESG factors are assessed during due diligence while considering any prospective investment and at each stage of the investment process, from origination to exit. It is the fiduciary duty of the alternative asset investment team to seek to maximise returns on investments, and ESG factors are intrinsic to that objective. The investment team engages with underlying managers to promote ESG best practice and address material ESG issues, to manage and monitor ESG risks in the post-investment phase and until exit.
Our responsible investment approach is deeply aligned with active ownership activities for risk mitigation and value creation over the long term. As active owners, we leverage on our market exposures and expertise to foster long-term, collaborative relationships with investee companies to deepen collective understanding and tackle material issues including ESG risks and opportunities. We consider engagement and proxy voting as key drivers of active ownership.
Total Number of Votable Items
Votes with Management
Votes against Management
Eastspring Investments (Singapore) Limited’s proxy voting record for calendar year 2021.
Engagement with investee companies is core to our active ownership responsibilities. We aim to encourage business and management practices that support positive enhancement of material ESG traits or mitigation of material ESG risks across our holdings through constructive engagement based on our in-depth knowledge of our investments in the context of their business environment. We also conduct thematic engagements via our Central Engagement programme, which serves as a platform to express our expectations on material ESG themes to targeted investee companies.
In addition, we believe that collaboration among investors is an effective way to address ESG issues and maximise investor influence. We are active members of collaborative organisations. From time-to-time, we may participate in collaborative engagement initiatives where we believe it to be in our client's best interests to do so.
An active and informed voting policy is an integral part of our direct equity investment philosophy and forms a core part of our approach to active ownership. As a starting point to this policy, we are supportive of the boards and management of the companies in which we invest. However, when companies consistently fail to achieve our reasonable expectations, we will consider actively promoting changes via proxy voting. By exercising our votes, we seek both to add value and to protect our clients’ interests as shareholders.
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