Adelphi's 'Responsible Asset Ownership' policy forms the basis of the Firm's approach to ESG incorporation. It is a process we will continue to develop over time, in order to enhance our current prcess, with no intention of launching dedicated ESG compliant fund products. However, we will adopt certain processes and procedures to ensure that ESG issues are fully considered and evaluated, where possible, when we make investment decisions.
Adelphi's imbedded approach to ESG
Since inception in 1997, Adelphi Capital’s investment strategy has implicitly incorporated elements of ESG into its process.
- We regard strong management ethics and good corporate governance as a pre-requisite for investing in any company and have a long history of voting on corporate actions and direct engagement with boards in situations where we believe they are not acting responsibly.
- We are long term shareholders and central to our investment philosophy is the concept of responsible ownership.
- We continually evaluate those companies we own and those we are considering, to assess a wide variety of issues that include the fundamentals of ESG.
- On environmental issues, our tendency to avoid capital intensive, highly cyclical and commoditised companies means that we almost never invest in fossil fuels, mining, chemicals, steel, utilities and other heavy industries. We prefer knowledge and brand intensive businesses and innovators that bring new more efficient ways of doing business.
- On social issues, we also exclude stocks with direct exposure to controversial weapons (cluster bombs, landmines, depleted uranium and chemical and biological weapons) and have been signatories of the Cluster Munitions Statement since 2013 and will screen for these companies.
Formalising this approach
The Firm has now decided to integrate ESG issues more formally into our investment process and our business. We will use a combination of in-house expertise and external resources (e.g. third party data providers, training providers and analysts) to evaluate whether those ESG issues identified represent risks or competitive advantages. Where we believe a company is operating below best practise we will actively engage with company management to seek a better outcome.