Our consideration of Environmental factors is ingrained in our analysis of long term growth and stability, analysed during discussions on Quality. Our Research Team has done considerable work on energy demand, as well as the sources of energy production. Whilst we are unlikely to own energy and coal mining stocks, from a philosophical perspective, our research also uncovered implications for a number of businesses in the utilities, industrial and consumer space.
One area we have specifically avoided exposure to, is the specialty drug industry. These companies have been growing earnings through substantial price increases, which are now coming to an end. As one would expect, in our opinion, buyers and regulators have moved against such companies indulging in aggressive price action to grow earnings.
We manage a number of client mandates with specific restrictions, relating to social matters that they choose to exclude.
Governance issues are considered within our Quality rating. The key element of this analysis is the company’s treatment of shareholders and its use of capital.