ESG incorporation strategy (select all that apply)
Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.
Munro Partners’ Responsible Investment approach, in order of importance, is to:
- Assess and integrate ESG risks into our investment process;
- Observe negative screening advice from firms where we provide investment management services; and
- Where material ESG risks are identified, to act responsibly through direct engagement, proxy voting and/or divesting in such companies.
We have chosen the approach and our order of priority for the following reasons:
- Our investment process is a fundamental, bottom up process, stock selection is based on key qualitative and quantitative measures (explained in detail below).
- Munro’s portfolios are concentrated portfolios (max 60 stock portfolios).
- Munro is index and sector unaware, unlike passive managers / index managers our flexible mandates mean we do not have to hold positions simply because they are in an index or because we have to hold a certain portfolio weight across sectors.
- We observe exclusions (negative screens) provided by clients, which ensures that they have delegated their choice of approach; and
- While we recognise the importance of engagement as a stakeholder, we understand that our ability to directly influence behaviour is proportionate to our size and the portion of each companies’ equity that we hold. We do hundreds of meetings annually with companies and use these as an opportunity to express any issues or concerns on ESG issues. We view our decision to buy or sell a company as the most effective signal to the market and management.
If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]