Responsible investment is defined as the integration of environmental, social and corporate governance (ESG) considerations into the investment management processes and ownership practices with the belief that these factors can have an impact on financial performance.
Aeon Investment Management’s motive for integrating responsible investment is to set a clear framework for integrating Environmental, Social and Governance (ESG) issues into investment decision making. We believe that an analysis of ESG factors, in combination with fundamental research, delivers insight that enhances investment decisions and returns. Central to our investment philosophy is the explicit recognition that sustainability factors directly affect long-term business profitability. By incorporating ESG factors we have a greater conviction in valuation and risk-reward assessment and we are better able to identify security mispricing.
The environmental issues we consider include but are not limited to climate risk and change, water scarcity, pollution, packaging, and sourcing of raw materials. The Social issues we consider include but are not limited to diversity, workplace health and safety, product standards, community relationships, and staff turnover metrics. The Governance issues we consider include disclosure, director independence, qualification and experience, remuneration benchmarking, board tenure and attendance. Our Analysts also research integrated reports of companies in our coverage and we consider economic, social and governance issues in our valuation methodologies.
We have recently updated and published an Environmental Policy, Social Policy and Governance Policy on our website which outlines our approach to responsible Investing using ESG integration. These policies are available on our website (https://www.aeonim.co.za/esg-policies/)