Working for positive change
The essence of our business is not only to find attractive investment opportunities, but also to work to drive positive change, influencing industries around the world to become more sustainable. We are responsible long-term owners who are committed both in terms of our stewardship and our capital. We combine active investing with our proprietary ESG framework, leveraging our regional and sector expertise in the world’s fast-growing economies, in order to deliver strong and sustainable solutions for our investors.
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Contact us
For questions related to sustainability and responsible investment, you are welcome to us at esg@eastcapital.com
Active ownership and an on-the-ground approach: How sustainable investments add value to investors
Two of our funds, East Capital Global Emerging Markets Sustainable and Espiria SDG Solutions have a sustainable objective. In this webinar, Karine Hirn, Chief Sustainability Officer and Huizi Zeng, Portfolio Manager at Espiria discuss what it actually means in terms of outcome, and what approach it requires.
Listen in to find out how our sustainability work adds value to investors and our portfolio companies!
Sustainable investments
All East Capital Group’s strategies follow an ESG framework. The framework consists of four pillars: Sector Exclusions (Negative Screening); Controversy (Norms-Based) Screening; Proprietary ESG Analysis; and Active Ownership. These four pillars are described in detail in our ESG Policy.
We introduced sector exclusions in 2007, controversy analysis in 2010, and our proprietary ESG scorecard in 2016. Our final ESG pillar relates to voting and engagement, which we have done since our inception in 1997.
East Capital Group is committed to consistent and thoughtful transparency and has been reporting publicly on responsible investing and ESG (Environmental, Social, and Governance) related efforts and results since 2015. As a UN PRI, Principles of Responsible Investment, signatory since 2012, East Capital Group publishes its annual transparency report on our website.
Sector exclusions are applicable to all East Capital Group’s strategies. The exclusions apply on a fund level, to both long and short positions within the equity portfolios, fixed income instruments.
To alert us of suspected breach of international conventions and norms on human rights, labour standards, environment, health and safety or corruption, screening is implemented during analyst's/PM's initial analysis and all our portfolios are monitored continuously and re-confirmed annually.
To structure our review of relevant and material ESG risks and opportunities we have developed an ESG scorecard, which comprises 10 Red Flag questions and 50+ additional ESG-related questions, as well as an SDG module to ensure that we contribute to UN's Sustainable Development Goals through asset allocation. As the scorecards are filled in by research analysts, portfolio managers and portfolio advisors, we ensure that the entire investment team integrates relevant and materials risks and opportunities in their fundamental analysis, ensuring a more holistic analysis of company quality.
If, in East Capital Group's opinion, a portfolio company does not manage ESG factors in a satisfactory fashion, we evaluate if it is suitable to initiate a dialogue with the company. The different channels and methods which East Capital Group can use in that event, include:
- Discussions with management and executive boards during company visits and other meetings
- Annual letters to all portfolio companies in which East Capital identifies important issues for the coming year
- Nomination of, or support for, independent members of the board
- Use of voting rights at general meetings
- Collaborating with other shareholders and taking part in relevant stakeholder and investment associations
- Dialogue with governments, stock exchanges and financial regulators to promote improvements in the institutional and legal framework
PAI
Statement on principal adverse impacts of investment decisions on sustainability factors.
East Capital Financial Services AB considers principal adverse impacts for sustainability factors as defined in article 2 p. 24 in the European Parliament and Council Regulation 2019/2088 regarding sustainability related disclosures in the financial services sector (“SFDR”). Sustainability factors refer to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.
East Capital Financial Services AB has chosen to consider the principal adverse impacts of sustainability factors in the context of investment advice and insurance advice by obtaining relevant information on the funds on which advisors make recommendations. East Capital Financial Services AB prioritizes the principal adverse impacts on sustainability factors in no particular order. Instead, how the indicators are prioritized in the advisory process depends on the client's potential sustainability preferences related to these factors. Thus, the ranking or prioritization of indicators in the advisory process is determined by the client's sustainability preferences.
East Capital Financial Services AB is aware that data quality and data availability is still deficient with regard to the sustainability factors listed in Table 1 of Delegated Regulation 2022/1288 of the SFDR. Furthermore, the information provided by financial market participants is in many cases based on lagging data.
Against this background, East Capital Financial Services AB has not established any criteria or thresholds linked to the sustainability indicators, as it is not certain that the data purchased from sustainability data providers is reliable.
Articles on sustainability
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