It is DSM’s policy to include ESG factors in its investment process. In general, if DSM determines that ESG factors may have a material impact on the potential long-term returns of an investment, DSM will complete in-depth research on those issues and continue to monitor them for any developments and determine whether any action should be taken with respect to the investment.
DSM will invest in companies with ESG issues when our research concludes that the issues are not material to long-term financial returns. DSM will evaluate Board of Directors independence, qualifications and procedures, with regard to achieving future financial returns for shareholders.
DSM has adopted various procedures to implement the firm's policy, which include the following:
- The CCO or a designee performs a quarterly ESG review of all companies whose stock is held in DSM’s model portfolio investment strategies;
- Each analyst reviews all ESG Controversy Reports for each of the companies that they cover, providing commentary to the Firm’s Chief Investment Officer on any material negative assessments;
- The Chief Investment Officer, in conjunction with the applicable analyst, will determine if any action is to be taken with respect to any investment held in DSM’s model portfolio investment strategies;
- The CCO or a designee will maintain an ESG file incorporating all analysts’ commentary;
- As updates or changes occur in the ESG ratings of any company held in DSM’s model portfolio strategies, the CCO or a designee will provide the relevant analyst with updated Controversies Reports for further review and analysis.