JKC’s investment policy revolves around fundamental bottom up stock picking based on strict due diligence criteria among which key elements of corporate governance dominate, including but not limited to corporate transparency, a high level of disclosure in the financial statements, easy access to management, to employees, to offices and factories, long term sustainability of the business model, a strong emphasis on social governance including increasing usage of renewable and/or clean energy and of water treatment facilities and efforts to achieve board diversity.
Our Responsible investment approach is also determined by the following principles:
Materiality impact : ESG does not follow the principle of “one size fits all”. We believe at JK Capital that it is not relevant to look at the same indicators to assess all companies’ sustainable performance. We use an adaptive framework to drive our ESG research. We use the SASB Materiality tool and we adapt it to Asia’s specificities to base our Materiality assessment.
Markets specificities : JKCM covers 15 markets across Asia. The ESG standards and approaches can differ from one country and one regulator to another. Indeed we cannot avoid the fact that requirements from regulators and stock exchanges across Asia differ in terms of ESG disclosure. Therefore, having a specific understanding of the ESG framework of each country JK Capital invests in is a key element to develop relevant analysis that will be different from one invested company to another. Hence, both local regulations and local market practices have to be taken into account when analysing company’s disclosure and when performing on-site visits.
Negative screening : JK Capital Management applies exclusion filters to its equity investment universe. Such filters include controversial weapons, thermal coal production and tobacco.