VCIM’s investment process combines financial analysis with environmental, social and governance (ESG) analysis. All securities must meet our ESG and financial criteria for selection. Once a company is confirmed as meeting our ESG criteria, a security is selected for the portfolio based on its fundamental merits as a “company” or business and its merits as a “stock” in terms of the share price and valuation. All investment decisions are based on ESG analysis, internal valuation models and our own investment thesis.
We use qualitative and quantitative analysis to determine this balance and subsequently, which securities will be considered for in-depth financial analysis. Company performance and policy is evaluated in the following areas: employee relations, environmental compliance, diversity, corporate governance, product sustainability, community relations and human rights. Companies that lag their peers are excluded from further analysis and investment. VCIM uses in-house expertise supplemented by third party research.
When new ESG risks arise the managers assess the fund’s exposure and initiate an analysis of each company’s approach to the risk to determine whether further action is required. Further action may include ongoing monitoring of the company’s risk management approach, engaging in dialogue with management, filing a shareholder resolution or divestment