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Good practice is good business

We are optimists. At Equitile we believe 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. It is our duty to ensure future generations enjoy similar improvements in their living standards.

To date, improved living standards have been achieved, in part, at the expense of environmental degradation, in the long run this is will prove self-defeating. We believe achieving sustainable economic growth, without irrecoverable costs to the environment, will be a defining feature of the next phase of the industrial revolution. We expect companies contributing positively to achieving sustainable growth to thrive, while those that fail to do so will fall by the wayside. We believe, good environmental, social and governance practice will result in good investment returns. In short, good practice is good business, for the companies we invest in, for us and our clients. This is why we place ESG criterion at the heart of our investment process.

Environment

We see innovation as a prerequisite of sustainable growth. Innovation permits improved productivity, allowing companies to add more economic value using fewer resources. We therefore search for companies helping 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 customers, workers, suppliers, and society at large. We believe the most resilient and successful companies are ones which all these respective stakeholders want to prosper. 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 ethics 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. The financial side of the firm must be conducted in a responsible manner, allowing the firm to invest for future growth while surviving inevitable business setbacks. We do not tolerate companies where management endanger both the capital of their shareholders and the jobs of their workers by using excessive debt.

ESG & corporate engagement

Equitile’s ESG policy is integral to our equity research process. We do not rely on the third-party vendors of ESG metrics, which are often inconsistent, rather we use our own judgement based on our analysis of each company’s track record

We admit no company onto our list of approved investments without it having already met our ESG standards. Once on one of our approved lists, companies are monitored on an ongoing basis, to ensure continued compliance with these criteria. If we remove a company from one of our lists, due to breach in ESG standards, we will engage with the company to explain what aspect of their behaviour we find unacceptable. In this way, over time, we aim to contribute to rising ESG standards overall.

Equitile especially seeks to avoid investing in companies causing unnecessary environmental and social damage through: exploitative financial practices, such as payday lending and some gambling; the unnecessary extraction of highly polluting fossil fuels; the manufacture and sale of some classes of weapons.

For further details or examples of how Equitile practices our ESG Policy, please contact info@equitile.com ?

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