The consideration of ESG factors is a natural component of Morphic’s investment process. We believe that understanding material risks and opportunities related to ESG factors, enhances the insights of the conventional investment process. The founders of Morphic have been investing for most of their careers with an investment process that reflects the evolution of Responsible Investment over this period.
Building on an historic approach of excluding companies whose activities are incompatible with our values (known as ethical or negative screening) the identification and consideration of material ESG factors is now fully integrated within our investment process.
Our own experience and a growing body of academic research suggest that incorporating ESG considerations into the investment process can lead to more informed investment decision-making and better investment outcomes for our investors.
Our Responsible Investing Policy (“Policy”) document affirms Morphic’s commitment to responsible investing and outlines our approach to practising responsible investing which comprises of four key components:
- Screening – Negative & Positive
- Integration of ESG considerations in our investment process – research, analysis & investment decision making
- Engagement – with portfolio companies & all relevant stakeholders, & voting appropriately
- Transparency – full disclosure
The Joint Chief Investment Officers are responsible for the implementation of this Policy and it is reviewed on a regular basis and amended to reflect developments in best practice and our commitments to PRI and industry peak bodies (such as RIAA). The Head of Research will be responsible for the annual review in the second quarter of each financial year.
Any changes to this Policy will be advised promptly to all members of the Morphic investment team and our investors by publication on our website.
Consistent with our Responsible Investing commitments we provide full transparency on how we integrate ESG into our investment process.
- Portfolio Holdings - we publish our full list of holdings on our website on an regular basis.
- Performance Reporting - every month, we provide our investors with a monthly performance report which shows the Funds’ top ten holdings (long and short positions).
- Semi-Annual and Annual Reporting – every six months we provide our investors with extensive commentaries on performance, portfolio management activities and relevant subjects.
- Voting – we will publish our voting records on an annual basis.
- Company Engagement – if appropriate we will publicise our engagement with portfolio companies, however, it is often the case that this more effective if kept private.
- Short Selling – we believe that public disclosure, via articles and blogs detailing our short-selling investment thesis, can have a powerful signalling impact.
- Other Content – our website contains regular “blogs” and longer articles on specific portfolio companies and relevant subjects.
- External Media – we regularly contribute to financial newspaper and television and copies of this content can also be found on our website.