We look at the following factors as a starting point for our responsible investment process;
Environmental
A company’s impact on the natural world ;
- Climate change
- Biodiversity loss
- Resource scarcity
- Waste and pollutio
Social
The well-being and rights of people and communities;
- Human rights
- Labor standards
- Working conditions
- Data protection
Governance
The standards for running a company:
- Bribery and corruption
- Executive pay
- Board structure
- Political contributions
Changing the Status Quo
We are always seeking a better approach – from better tools to better services – to the challenges that face our clients, our people and the communities we serve.
A good company challenges the status quo; a great company changes it for the better. Integrating ESG Environmental, Social and Governance principles have been integral to Capitalsave Investment Partner’s corporate strategy since our founding. We are committed to responsible investing practices and incorporate them into everything we do.
Empowering Our People
It is not enough to help others in need. Social responsibility starts right at home with the thousands of people at Capitalsave Investment Partners, who are committed to giving back. That’s why we’re so dedicated to our people. The more we do for them, the more they can do for their communities. We operate long-term assets and businesses across the globe. This approach dictates both our investment strategy and our commitment to environmental, social and governance (ESG) practices. We believe that value creation and sustainable development are complementary goals. Throughout our operations, we are committed to practices that have a positive impact on the communities in which we operate.
“ Implemented in a systematic and consistent manner, ESG incorporation can be effectively integrated into a value investment philosophy” Terrence K. Johnson
To learn more about some of the measures we are taking and the positive impact we have made, you may download our latest report outlining our recent environmental, social and governance strategy and initiatives. Our ESG principles are embedded throughout our operations and help us ensure that our business model will be sustainable well into the future.
Mitigate the impact of our operations on the environment:
- Strive to minimize the environmental impact of our operations and improve our efficient use of resources over time.
- Support the goal of Net Zero Green-House Gas (GHG) emissions by 2050 or sooner.
Uphold strong governance practices:
- Operate to the highest ethical standards by conducting business activities in accordance with our Code of Business Conduct and Ethics.
- Maintain strong stakeholder relationships through transparency and active engagement.
Ensure the well-being and safety of employees
- Operate with leading health and safety practices to support the goal of zero serious safety incidents.
- Foster a positive work environment based on respect for human rights, valuing diversity, and zero tolerance for workplace discrimination, violence or harassment.
Be good corporate citizens
- Ensure the interests, safety and well-being of the communities in which we operate are integrated into our business decisions.
- Support philanthropy and volunteerism by our employees.
CAPITALSAVE INVESTMENT Partner's Net Zero Commitment
Capitalsave Investment Partners Group uses the collected data for various purposes:
We support the goal of the Net Zero Green-House Gas (‘GHG’) emissions by 2050.Over the past 8 years, Capitalsave Investment Partners has been actively involved in building one of the largest private renewable power businesses in the world. With installed renewable generating capacity of 20 GW, we now produce more than enough green energy to power Arizona and will more than double that amount once our development portfolio is brought online. We recognize that further renewable power capacity must be rapidly scaled to replace fossil fuel generation and meet expanding global electricity demand so that the world can eliminate the over 70% of global emissions that come from final energy consumption as quickly as possible. Capitalsave Investment Partners intends to build on this leading position in renewable power and do much more to contribute to the transition to net zero:
We will go further
In addition to continuing to make major investments in renewable energy globally, we will manage our investments to be consistent with the transition to a net zero economy. As a recent signatory to the Net Zero Capitalsave Investments Managers initiative, we have made a commitment to investing aligned with net zero emissions by 2050 and implementation of science based approaches and standardized methodologies through which to deliver these commitments.
We will go further
We will work with leading private sector initiatives to advance the role of finance in supporting the economy-wide transition, to accelerate capital flows consistent with the Paris Agreement, and to promote widespread adoption of decision-useful methodologies to support credible transition planning, analysis and investing.
We are committed to transparency
- We will track and report GHG emissions consistent with GHG Protocol and PCAF standards.
- We will publish decarbonization plans every five years consistent with the Paris Agreement.
- We continue to align our business with the TCFD recommendations and are targeting to incorporate TCFD disclosures for the 2023 fiscal year.
We will help accelerate the transition to Net Zero
- We will track and report GHG emissions consistent with GHG Protocol and PCAF standards.
- We will publish decarbonization plans every five years consistent with the Paris Agreement.
- We continue to align our business with the TCFD recommendations and are targeting to incorporate TCFD disclosures for the 2023 fiscal year.
ESG Frameworks and Memberships
Net Zero Asset Managers Initiative
Capitalsave Investment Partners is a signatory to the Net Zero Asset Managers initiative, underscoring our long-standing commitment to driving the complementary goals of sustainability and value creation across our investments and operations. The Net Zero Asset Managers initiative is a group of international asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner
Capitalsave Investment Partners is a signatory of the Principles for Responsible Investment (PRI), formally demonstrating our ongoing commitment to responsible investment and environmental, social and governance (ESG) best practices. The PRI is one the world’s leading proponents of responsible investing, with an emphasis on understanding the investment implications of ESG factors and supporting an international network of investor signatories in incorporating these factors into their investment and ownership decisions.
A global nonprofit organization, BSR works with its network of more than 250 member companies and other partners to build a just and sustainable world. From its offices in Asia, Europe, and North America, the nonprofit develops sustainable business strategies and solutions through consulting, research, and cross-sector collaboration.
The Prince’s Accounting for Sustainability Project (A4S) was established by HRH The Prince of Wales in 2004 to mobilize action and leadership by the finance and accounting community to address the challenges to the economy and society posed by issues such as climate change, increasing depletion of and demand for natural resources, urbanization and inequality. A4S seeks to inspire action by finance leaders to drive a fundamental shift towards resilient business models and a sustainable economy.
Integrating ESG considerations into our Investment Partnership
Our PRI commitments include incorporating ESG factors into our investment decisions, starting with the due diligence of potential investments through to the exit process. We tailor ESG due diligence to each investment, and we create post-investment remediation plans for material ESG considerations. For all potential investments, we use internal experts and a variety of
ESG frameworks to identify material ESG factors and utilise external consultants where appropriate.
This analysis includes everything from ensuring environmental, legal and regulatory compliance to the identification of opportunities to add value or mitigate risk in our portfolio.
Our investment teams use an ESG due diligence guideline to ensure consideration of material ESG risks and opportunities. These teams then provide a detailed memorandum to the Investment Committee outlining the merits of the transaction and disclosures relating to risks, including material ESG issues, and potential mitigation strategies.
All investments made by Capitalsave Investment Partners must be approved by the Investment Committee and must incorporate ESG matters into their evaluation, including anti-bribery and corruption, health and safety, and other ESG considerations.
Upon company acquisition, we create a tailored integration plan to ensure that all material matters, including ESG risks and opportunities are prioritised.
ESG risks and opportunities are actively managed by the portfolio companies with guidance from our in-house investment teams, primarily through representation on company boards and equivalent oversight bodies where all financial, operational, and strategic elements of the business are reported, considered, and where appropriate, approved.
This allows us to draw on local expertise, which provides valuable insight given the wide range of asset types and locations in which we invest. Certain key performance indicators, such as serious safety incidents, are reported regularly to the applicable board or other oversight body.
A strong governance framework
We are always working to maintain sound governance practices to ensure ongoing investor confidence. This involves a continual review of how evolving legislation, guidelines and best practices should be reflected in our approach.
For example, we have a zero-tolerance approach to bribery, including facilitation payments, and all Capitalsave Investment Partners are mandated to complete an in-depth anti-bribery and corruption (ABC) training seminar annually.
Capitalsave Investment Partners maintains an ethics hotline to report suspected unethical, illegal or unsafe behaviour. The reporting website can be accessed through this link. Our reporting hotline is managed by an independent third party and is available 24 hours a day, 7 days a week.
We also require all portfolio companies in which we have a controlling interest to adopt an ABC policy that is equally stringent to Capitalsave Investment Partners, which entails that portfolio companies install an ethics hotline within six months of acquisition.
Health and safety in our portfolio companies
Employee health and safety is a top priority at Capitalsave Investment Partners. We view health and safety as an integral part of the management of our business and therefore consider it a line responsibility best managed by portfolio companies.
We have established a safety steering committee, which includes the CEOs and COOs of each business group, to promote common values and a strong health and safety culture, share best practices and monitor serious safety incidents.
In the event that a serious incident does occur, Capitalsave Investment Partners conducts an in-depth investigation to determine root causes and formulate remediation actions.
A commitment to green buildings
Developing properties that take environmental considerations into account is not only a passion, it provides returns on our investments.
That’s why 100% of our new developments are being built according to LEED® Gold standards, to proactively address greenhouse gas emissions, energy efficiency, water use, indoor air quality, and other impacts.
Sustainable Finance
AGGREGATE VALUE OF OUR GREEN FINANCINGS IN
RENEWABLE POWER, REAL ESTATE,
INFRASTRUCTURE AND PRIVATE EQUITY
Capitalsave Investment Partners strives to be a leader in sustainable finance products, which support adaptation to global climate change challenges. ESG in investment solutions, we believe unmanaged ESG risk can diminish the value of our clients’ assets.
Therefore, we embed ESG issues into our investment and management processes, making responsible investment standards with every Capitalsave Investment Partners (CsIP) investment.Our team of responsible investment professionals work with investment managers and analysts across all asset classes to help identify material risks and issues in the companies and sectors that we invest, for example the impact of wider themes such as climate change.
To help tailor our approach to each fund, the Responsible Investment Team conducts quarterly ESG reviews with fund managers to discuss the most relevant and material ESG risks and opportunities. In addition to this formal process, the Responsible Investment Team is in constant contact with the investment teams and this helps to ensure that ESG risks and opportunities are continuously being embedded into investment decision making.
Beyond ESG integration we offer a range of both pooled and segregated solutions to address varying levels of ESG appetite of our clients, including our ethical and sustainable funds.
ESG INVESTING
A Purpose-driven Investment Approach
Capitalsave Investment Partners believes that material environmental, social and governance (ESG) characteristics are an important driver of long-term investment returns from both an opportunity and a risk mitigation perspective. We also understand that for many of our clients the impact of their portfolio is an important consideration in conjunction with investment performance.
We consider the integration of ESG factors into the firm’s strategic plans to be consistent with our mission statement and overall investment culture. From our first application of “avoidance screens” to the launch of our Sustainable Equity Investment, Capitalsave Investment Partners has been at the forefront of advancing the integration of ESG characteristics into investment processes.
Today, we continue to build upon this legacy, driven by our belief that ESG factors, like any other factor, should be incorporated in a manner consistent with the specific asset class and style of each investment strategy. Capitalsave Investment Partners collaborates closely with our clients and industry peers to build awareness and encourage broader disclosure.
Across our investment platform, Capitalsave Investment Partners looks for opportunities to engage on ESG issues and trends, and to support clients to increase the impact of their investments.
We measure our success through sustained improvement in our ESG expertise.ESG investing can be employed in a variety of ways to help generate enhanced returns as well as to implement non-financial objectives within a portfolio. We believe our approach not only benefits our clients, but can also support better-functioning capital markets and generate positive impacts for the world as a whole.
At Capitalsave Investment Partners, we would consider any security within a given universe if we feel it offers compelling long-term risk-adjusted returns. Capitalsave Investment Partners long-term, fundamental research process has always demanded that analysts strive to consider all material risks that could influence a security or market’s valuation, including those factors rooted in environmental, social, and governance concerns. “Implemented in a systematic and consistent manner, ESG incorporation can be effectively integrated into a value investment philosophy.” Terrence K. Johnson.
The willingness of value investors to take a position in a broad range of companies and industries – including those that typically score very poorly with regards to certain ESG characteristics – has been taken by some to mean that a value investment philosophy is incompatible with the incorporation of ESG factors.
This needn’t be the case as demonstrated by Capitalsave Investment Partners integrated approach to incorporation in our equity and fixed income strategies.
In particular, Capitalsave Investment Partners recognizes that climate change must be considered as a risk to the long-term future of economies and individual business, and addresses these concerns through its bottom-up analysis. Analysts adopting a holistic approach, rather than ESG specialists operating in silos, create greater efficiency and context, focusing on the most material issues for a company. Capitalsave Investment Partners has always believed it is the responsibility of all investment professionals to understand and incorporate the impact of environmental, social and governance factors on our present and potential investments, and their sustainable profitability. Capitalsave Investment Partners ESG Steering Committee, which is comprised of senior representatives from each of the investment and client service teams, sets and reviews firm-wide objectives and initiatives to ensure that our resources and investment staff are capable of meeting ongoing developments associated with ESG related issues.
In advocating for an integrated approach, we argue that all material factors that could influence a company’s valuation – as determined by its future cash generation and shareholder returns – should be rigorously analyzed and incorporated as part of an in-depth research process.
Considerations stemming from environmental, social, and governance concerns must, where material, be included in this process. Taken not in aggregate but as individual concerns, they can be understood in the context of the company’s specific financial and operational situation.
The result of this risk-based approach is that, much like any other strategic, financial or regulatory risk incorporated into an equity valuation, the presence of material ESG-based risks need not preclude investment, provided that they are adequately discounted in the market price.
Across all of Capitalsave Investment Partners equity investment products, the research process is driven by extensive, bottom-up fundamental company analysis which includes a comprehensive program of meeting with representatives from current and prospective holdings. We believe that the value of any equity security is equal to the present value of its future cash flows to the investor, which are primarily dividends.
The principal focus of our investment professionals is constructing long-term forecasts for these cash flows utilizing our dividend discount methodology.
To make the integration of these factors in the equity valuation process more transparent, Capitalsave Investment Partners utilizes a proprietary ESG Summary Report to document the research and analysis carried out on ESG factors, including the quantitative impacts in our valuation models.
The ESG Summary Report explicitly documents the influence of ESG risks and opportunities on our valuation assessments and is completed for all current and prospective equity holdings.
By systematically considering both a set of core values as well as company-specific concerns, we aimto capture and quantify material factors that could impact the base, best and worst -case scenario risk analysis over the short, medium and long term. Documenting these factors helps Capitalsave Investment Partners quantify the impact of ESG risks on a company’s valuation and sustainability.