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Prosperity Capital Management

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

PCM strongly believes that high quality management and good corporate governance standards, coupled with a strong legal and regulatory framework, drive long-term shareholder value as well as higher standards across the ESG spectrum. Corporate governance is therefore at the very core of PCM's investment approach and is fully integrated into the entire investment process by having a ESG team form an integral part of the investment team.

As a responsible investment manager, PCM considers itself as a co-owner of respective company and we aim to maximise our impact through active ownership and collaboration. This is very much a pro-active engagement, though we sometimes need to act on unforeseen events. We closely monitor and engage the companies in which we invest, and vote at company meetings. 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

PCM generally seeks to invest in fundamentally-sound and well managed businesses, and in our investment analysis we seek to consider all factors in our review of companies and their equity investment opportunities, including ESG matters.

PCM believes that ESG monitoring, engagements and improvements reduce respective investment risks and provide for better returns. PCM also believes that good corporate governance, high environmental standards, responsible social policies and respective adequate risk-management are indicative of efficient and sustainable management. And, on the contrary, cases or risks of governance abuses, environmental or social disregard are signals of inefficient and non-sustainable management and should be taken into consideration during investment process and as a subject for engagements.

Hence, we do consider ESG factors, alongside other factors, in the investment decision. Our financial models, for example, incorporate material effects of any industrial accidents/downtimes including staff costs, current and expected environmental regulations, environmental fines, environmental capital expenditure, social costs related to local communities, etc. PCM has on numerous occasions sold or held off investment due to ESG-related concerns.

Also, if PCM encounters a target company with no appropriate ESG disclosure or performance this is raised by PCM and discussed during its engagement with the company. For example, insufficient ESG transparency, potential or realized governance abuses, environmental or social accidents, or negative developments of relative environmental data are treated as negative events and PCM will engage with a company and endeavour to challenge its management whenever possible to determine why it has occurred, what has been done to redress or improve the situation and what will be done to minimise such events in the future.

With the exception of cluster munition companies (which are indefinitely excluded from our investment universe) and relevant sanctioned entities (excluded for the period that those sanctions are applicable), PCM does not seek to exclude any potential investment. Our core belief is that positive results for ESG work come from active involvement in companies rather than from exclusion of certain investments.

01.6. Additional information [Optional].


SG 01 CC. Climate risk (Private)

SG 02. Publicly available RI policy or guidance documents


02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.




02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

PCM adopted a Responsible Investment Policy upon becoming a signatory to UNPRI, and have subsequently added a Voting and Engagement Policy.

PCM believes that engagement and voting are a very important and integral part of portfolio management, as they provide the opportunity to be heard and influence the direction of a company. Therefore, PCM seeks to engage and vote in accordance with these procedures. The objective is to ensure that PCM engagements and proxy voting activities on behalf of its clients are conducted in a manner consistent with the best interest of its clients.



SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Conflicts of interest (COIs) are identified either as part of the periodic review of conflicts by the Boards and the Group Compliance Officer or on an ad hoc basis by any PCM personnel. All COIs are reviewed by the Group Compliance Officer and dealt with in one of the following ways:

- An acknowledgement that existing controls are sufficient to mitigate the conflict (an example here might be where established Chinese walls exist or where the individuals concerned are subject to a policy of independence);

- Implementation of additional control measures specific to the conflict concerned;

- Declining to act for the client / colleague / third party concerned;

- Disclosure of the conflict to the parties concerned and seeking their consent to continue with the transaction.

03.3. Additional information. [Optional]

The way in which a particular conflict has been resolved should be notified to the Group Compliance Officer, who will record the method of resolution in the COI Register. In the unlikely event that the Group Compliance Officer is not involved in the resolution of a particular conflict, full details should still be provided to ensure that they are appropriately recorded.

SG 04. Identifying incidents occurring within portfolios (Private)