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Good practice is good business

At Equitile, we are optimists. We see that the world is becoming a better place; poverty is declining, and longevity is rising. On average, people are living longer healthier lives than their parents, and generally doing so with improved rights and freedoms. We recognise that the generation of long-term sustainable returns is dependent on stable, well-functioning and well-governed environmental, social and economic systems.

Collectively, our portfolio companies have a significant impact on how the world is shaped and so we like to understand, as best we can, the impacts and influences these companies have on the environment and society, for better and for worse.

What responsible investing means to us

A good governance structure is of prime importance for us. Additionally, we place emphasis on analysing environmental and social criteria that will facilitate top-line growth, reduce costs, minimise regulatory and legal risks, and increase high quality employee retention and productivity.

Environmental

We see innovation as a prerequisite of sustainable growth, permitting improved productivity and allowing companies to add more economic value using fewer resources. We therefore search for companies which make the economy more efficient while also, proportionately, striving to reduce their own environmental impact.

Social

All companies exist within a wider ecosystem encompassing their workers, customers, suppliers, and society at large. We believe the most resilient and successful companies are ones which consider all these respective stakeholders’ interests. This means we only invest in companies providing a product or service which is beneficial to society and doing so in a responsible manner, with healthy relationships between itself and its customers, workers and suppliers. If our research process raises concerns of an ethical nature these are referred to our governance committee consisting of three Equitile board members.

Governance

In the long run, no company can prosper without high quality governance and a healthy corporate culture. It must treat all its employees fairly and without discrimination, it must conduct its business legally, and it must compensate its management and staff appropriately, fostering an alignment of interests with shareholders. We do not tolerate companies whose management endanger both the capital of their shareholders and the jobs of their workers by using risky financial engineering. The financial management of the firm must be conducted in a responsible manner, allowing it to invest for future growth while surviving inevitable business setbacks.

ESG in Practice

Our E, S and G data is largely drawn from regularly reported primary sources. We map material E, S and G risks and opportunities as part of our fundamental research, using a combination of ESG frameworks, risk measurement tools and red flag indicators. Our ESG appraisal system is both quantitative and qualitative and complements bottom-up financial analysis to reinforce the thesis behind each investment.

We review sustainable business practices and assess the development of each company's operational efficiency through better management of natural resources such as water and energy, efforts to minimise waste, and cost reduction strategies which enhance productivity.

To discern the ESG credentials of a prospective investment we ask three questions;

  • Has the company identified material ESG issue relevant to its business?
  • Has the company done the work to assess these issues and incorporated their implications into its strategy?
  • Has the company adequately informed on its approach to sustainability and its influence on strategy?

Rather than rely on third-party data providers, which are often inconsistent, we use our Proprietary Investment Sustainability Mapping (PrISM) system, which draws from organisations that expend considerable resources developing and setting comprehensive global standards, which identifies and evaluates financially important ESG risk factors.

Specifically, we draw on the work of the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), the Greenhouse Gas (GHG) Protocol Standards, and other sustainability reporting standards specific to certain businesses. We adopt a reporting framework, developed from these standards, and use international accounting tools (e.g IFC, WWF, GRI) to assess disclosed climate change risks and opportunities affecting our investee companies. We then apply our own scores to each investee company, based on this analysis, which we use to rank their ESG performance.

Benefits of our approach

Adaptable

Our ESG investment process is governed by a disciplined approach to ESG risk factor assessment and analysis. Collaborative discussions help integrate individual views in establishing a cohesive set of guidelines, designed to remove subjectivity wherever possible, allowing Equitile’s Investment team to remain faithful to the core tenets of our investment philosophy.  The definition of what is material is dynamic, it is not uncommon for an immaterial factor to become material and so consistency and systematic tracking of historic ESG data and trend analysis is fundamental to our approach. 

Engaged

We admit no company onto our list of approved investments without it having already met our ESG standards. Once on our approved list, companies are monitored on an ongoing basis.

We exercise proxy voting obligations as an important right of shareholders. We utilise our voting rights to hold company boards to account on the extent to which they are protecting the interests of shareholders and growing their businesses in a responsible and sustainable manner. Our goal is to reduce risks and enhance corporate governance practices.

Exclusive of unethical conduct

We especially seek to avoid companies causing unnecessary environmental and social damage such as those engaged in pornography and exploitative financial practices such as payday lending, gambling, the manufacture and sale of controversial weapons, civilian firearms and tobacco. Whilst we do not opt for full-fledged fossil fuel divestment, we place emphasis on an ESG momentum approach such as investments driving innovation.

For further details on our investment approach, please contact info@equitile.com

Risk Warning

The value of investments and the income from them can go down as well as up and investors may not get back the amount originally invested and may lose all of their investment. The value of investments in the investment funds contained on this website may be affected by the price of underlying investments. Exchange rate changes may cause the value of overseas investments to rise or fall.

Nothing contained on this website constitutes, and nothing on this website should be construed as, investment advice or a recommendation to buy, sell, hold or otherwise transact in any investment. It is strongly recommended that you seek professional investment advice before making any investment decision.

You should consider whether an investment fits your investment objectives, particular needs and financial situation before making any investment decision. You should also inform yourself and seek advice as to (a) the possible tax consequences, (b) the legal requirements and (c) any foreign exchange restrictions or exchange control requirements which you might encounter under the laws of the countries of your citizenship, residence or domicile and which might be relevant to the subscription, holding, transfer or disposal of interests in any investment fund.

To the extent that this website contains any information regarding the past performance and/or forecast of investment funds, such information is not a reliable indicator of future performance of these investment funds and should not be relied upon as a basis for an investment decision

Equitile Investments Ltd (“Equitile”) offers no guarantee against loss or that investment objectives will be achieved. Please read the Key Investor Information Document, Prospectus and any other offer documents carefully and consult with your own legal, accounting, tax and other advisors in order to independently assess the merits of an investment.

Equitile Investments Ltd is authorised and regulated by the Financial Conduct Authority in the United Kingdom and is a company registered in England, number: 09459099. Registered Office: 2nd Floor, Regis House, 45 King William Street, London EC4R 9AN.

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