Prosperity's investment analysis seeks to consider all factors in its review of companies and their equity investment opportunities - including ESG matters.
In general, Prosperity strongly feels that environmental and social factors are led by the quality and effectiveness of corporate governance. That is to say, our experience and understanding is that the better managed companies tend to have appropriate environmental and social policies and actions. Moreover, poor environmental or social practices, such as avoidable oil spills or poor employee safety measures, are indicative of inefficient management and poorly run businesses.
Prosperity believes that companies with higher standards and practices in corporate governance tend to have better defined policies and approaches to environmental and social issues. As such, these companies are inherently more sustainable in our opinion and experience.
Whilst price and other factors are a consideration, of course, Prosperity generally seeks to invest into fundamentally-sound and well managed businesses. Furthermore, Prosperity Capital Management is an active shareholder and seeks to behave as a part owner of the businesses in which our clients' capital is invested. As such, we actively seek to engage with owners, management and other stakeholders to drive value in our businesses and, amongst other things, to promote better and good governance practices - which in turn will, in our expectation and experience, manifest itself in better and good environmental and social policies and actions.