Environmental, Social and Governance Policy
Amberside Capital are committed to sustainable investment management which benefits people and the planet. To achieve this aim, we have developed ESG (Environmental, Social, and Governance) analysis, monitoring, and improvement processes which are integrated throughout our investment lifecycle.
ESG consideration is fundamental to all investment decisions across all asset classes and geographies, regardless of our source of capital or investment strategy. Guidance on ESG integration into a specific investment strategy or fund can be found in the relevant procedures manual.
2. What is ESG?
ESG considerations are the range of environmental, social, and governance standards that can be used to assess the ethical performance of an investment. Examples of ESG considerations are shown below:
• Greenhouse gas emissions and other pollution
• Waste output
• Resource management
• Quality job creation
• Diversity and equality
• Impact on the local community
• Board and management structure
• Conflicts of interest
• Company policies and procedures
3. Principals for Responsible Investing
Amberside is a signatory to the Principles for Responsible Investment (“PRI”). The PRI is an independent body which supports investors in managing risks by better incorporating ESG analysis into investment decisions. Staff are encouraged to regularly review the PRI framework and Amberside will keep its team informed of the steps being taken to meet these principles. The core principles of the PRI are listed below:
Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
As managers of third party funds, we have a fiduciary duty to act in the interests of our investors. This duty extends beyond financial interests to ESG matters.
4. Analysis and Monitoring
The matters listed in section 2 are common across most asset classes and will typically form part of the ESG analysis and monitoring processes for all investments Amberside makes. However, this list is not exhaustive and the team responsible for performing due diligence on a potential investment will identify other ESG considerations associated with that particular investment. ESG analysis is integrated into our initial screening process and our investment approval process.
Following investment, the ESG performance of the investee is monitored based on the relevant considerations identified during the investment process and any additional areas identified by the investment management team. Performance is benchmarked against expectations set by the Investment Committee and the performance of other ESG focused companies in the sector. Staff should refer to our ESG monitoring documents for further details on this process.
5. Management and Improvement
The team responsible for the management of each investment will seek to identify areas for improvement in ESG performance and will encourage investees to exceed the targets we have put in place.
The tools typically available to the management team to ensure investee companies are aligned with this aim include using our position on the investee board to exert influence at the top level of governance, taking part in shareholder votes, and engaging with other shareholders to align their voting. Where we have invested alongside other parties we will apply a collaborative approach to influencing the investee to align with our ESG goals, to maximise the impact of our joint activities.
ESG performance is incorporated into the investment reviews undertaken by the Investment Committee. As well as assessing historic performance, these reviews seek to identify new areas for improvement with the aim that Amberside’s investees remain ahead of their sector on ESG matters. This platform is also used to share knowledge across investments.
We recognise that our own ESG performance must be well managed. Amberside’s own environmental impact, social responsibility, and governance procedures are reviewed quarterly by the Amberside Board.
6. Public Support
Amberside has a responsibility to encourage others to act in an ESG positive manner. As such, when making public statements, engaging with policymakers, or undertaking other activities which may influence the behaviour of others, we must always represent our commitment to responsible investment. The board will review any such activities prior to them being carried out.
We also support other bodies and initiatives that align with our responsible investment goals, such as the PRI, the 2015 Paris Agreement, and the Task Force on Climate-related Financial Disclosures.