At NCDFInvest, we believe that Environmental, Social, and Governance (ESG) factors are financially material and can significantly impact a company’s performance, both positively and negatively. Integrating ESG risks and opportunities into our research process is essential for comprehensive financial analysis.
We utilize a top-down Portfolio Construction Committee to actively assess ESG risks within our portfolios. By screening out potential investments that do not align with our ESG focus, we leverage insights from our investment managers, ESG equity analysts, and central ESG investment team. This holistic approach allows us to build a richer, more nuanced view of each portfolio, enabling consistent evaluation and comparison.
Our responsible investment management strategy is designed to mitigate risks, unlock opportunities, and enhance long-term returns.
Our investment analysts conduct thorough research on projects and portfolios, focusing on ESG risks that could affect financial health and sustainability. We ensure that company management is aware of these risks and actively seeks to mitigate them.
The research, including ESG factors, is presented to our investment decision-making team for discussion. Further investigation or valuation adjustments may be requested at this stage to ensure comprehensive understanding and integration of ESG factors.
Our investment team votes on projects and portfolios to determine their market positioning. Material ESG factors influence the strength of our voting conviction and can lead to calls for shareholder activism when necessary.
ESG factors play a crucial role during portfolio construction. For example, governance quality might affect stock allocation, even when future earnings valuations are similar. This ensures a balanced and ESG-aligned portfolio.
We continuously monitor all ESG factors through our analysts and the Investment Risk Oversight Committee. Direct engagement with investee companies is undertaken when necessary, and these engagements are tracked for accountability.
We are at a crucial point in history, feeling the collective need for action to change how we produce, live, and invest. There is a shared understanding among individuals, businesses, policymakers, and civil society to create a resilient and forward-looking perspective. The wave of change brings great opportunities: from regenerative agriculture and smart energy solutions to empowering marginalized groups and fostering circular economy businesses. This transformation requires a deep, systemic shift.
NCDFInvest is committed to responsible stewardship of our businesses, clients’ assets, and service excellence. We prioritize long-term value over short-term gains, maintaining a focus on acting responsibly and with integrity. This philosophy has been central to our business since its inception and is crucial in fostering successful relationships with investors, clients, staff, partners, and communities. By understanding our stakeholders’ needs today, we aim to innovate and create value for the future.
