Exclusion from the environmental thematic investable universe.
In February 2018, the company had a big profit warning, shares fell c. 20% in one day. We considered whether this was a buying opportunity, as shares were significantly cheaper since we sold. The updated ESG-analysis revealed that all the issues identified several years before, had worsened; the pricing issues had been revealed to be much worse, actual fraudulent activities, company facing serious class action cases, the local community and air pollution issues were on-going, company had been fined several millions of dollars for inaction on toxic emissions, while the management team remained unchanged, and continued to enjoy excessive levels of compensation, compared to the deteriorating company financial and operational performance. The company was downgraded on ESG-basis and is now outside of the investable universe.
Very recently the management team left, due to very weak performance both operationally, strategically and financially and a new management team has arrived. We are now in the process of analysing and engaging with the company, to see whether the new management team will improve practices and approaches and whether the company might be upgraded on ESG-basis and become part of the active environmental equities investable universe again.