COMMITMENT TO RESPONSIBLE INVESTING
ESG analysis is not just about identifying and measuring risk, it is also about identifying investment opportunities. We consider ESG factors alongside traditional financial measurements to provide a comprehensive view of investment and help identify those investments that have the potential to deliver sustainable returns.
Our landmark acquisition of Capitalsave Investment Partners Hive will unlock new opportunities for our clients, driven by greater scale, diversity, and balance. Our specialist investment managers embrace ESG incorporation as it best fits their investment process and enables us to offer a full complement of responsible investing strategies to our clients.
Capitalsave Investment Partners is committed to being a responsible investor. This means being a good steward of our clients’ assets and promoting responsible investment and good governance across all asset classes. Alongside this, we also believe that considering environmental, social, and governance (ESG) issues in the investment process can help us deliver better returns for our customers and clients.
At Capitalsave Investment Partners, we have embraced responsible investing for many years and continue to expand our offering in line with the evolving world of ESG best practices.
Principles for Responsible Investment (PRI)
The Principles for Responsible Investment (PRI) score outlines how signatories’ implementation of responsible investment compares year-on-year, across asset classes, and with peers at the local and global level, by providing a confidential report. Capitalsave Investment Partners has been a signatory of the PRI since 2017 and, like many others, has chosen to publish our latest report and results
INVESTING SUSTAINABLY IS AT THE CORE OF OUR APPROACH TO RESPONSIBLE INVESTMENT
At Capitalsave Investment Partners ( CsIP), our Governance and Responsible Investment (GRI) team is committed to addressing ESG-related factors systematically.
The team seeks to expand our understanding of the investment challenges related to systemic issues – such as climate change, malnutrition, inequality, poverty, ecological degradation and resource scarcity – and champion the broader sustainability mindset throughout our business.
Risk Management
We view risk as the possibility of permanent capital loss. We look for competitively entrenched, well-managed, publicly traded businesses selling at discounted prices to help drive our goal of generating superior long-term absolute returns and minimising the risk of permanent capital loss
Step 1
Security Selection
Managing against capital loss is deeply embedded in our investment approach, beginning with our bottom-up investment criteria.
- High quality, financially sound, competitively advantaged Businesses
- Capable, shareholder-oriented People
- Discounted Price trading at 60% or less of intrinsic value.
Step 2
Portfolio Construction
Portfolio construction is 100% bottom-up and benchmark agnostic, with strict portfolio guidelines
- 18-22 best ideas
- 5% target position; ~7.5-10% max
- 15% max industry target
- ~10-15% max company ownership
- Hold cash when securities do not qualify
Step 3
Ongoing Monitoring
We actively monitor our portfolios to manage risk at both the individual stock and portfolio level.
- Add/trim positions to improve margin of safety
- Continually update appraisal values and business cases
- Devil’s advocate case review if price declines over 18 months
- Ensure compliance with portfolio limits and guidelines.
PHILOSOPHY, PROCESS AND CAPABILITIES
We embed ESG best practices and analytics in our investment processes, enhancing our traditional financial analysis – to open new investment opportunities, help manage risk and seek to enhance returns over the long term.
Who’s Responsible for Incorporating ESG?
Investment Professionals include ESG considerations in research and stewardship activities.
Active Ownership – Protecting and Unlocking Value
Diligent stewardship helps us to safeguard clients’ investments and unlock value. Our portfolio managers and analysts engage with executives and board members of the organizations we invest in to review issues we believe are material to their firms’ long-term prospects.
We also meet and collaborate with industry bodies, non-governmental organizations, academics and other specialists that could provide valuable insights. We take our proxy voting responsibility seriously and are committed to voting in the best interests of our clients.
Diverse Range of Investment Capabilities
value driven
Including or excluding certain investments to meet specific criteria to suit clients’ beliefs, such as religious or ethical values
ESG TILTED
Positioning towards issuers with leading ESG practices or actively engaging with under-performers by these standards
THEMATIC
Targeting issuers that address social/environmental challenges via their products and services
IMPACT FOCUSED
Investing with the explicit intention to generate positive and measurable social and environmental outcomes.
HOW WE INTEGRATE ESG FACTORS AT CAPITALSAVE INVESTMENT PARTNERS
ESG SCORES
- Multi-level ESG scoring
- Separate E, S, G pillars with underlying scores
- Utilizing the Sustainability Accounting Standards Board’s (SASB) materiality map to identify key focus areas.
CARBON FOOTPRINT
- CO2 Emissions
- Company level indicators tracking carbon footprint
- Utilising the Sustainability Accounting Standards Board’s (SASB) materiality map to identify key focus areas
BUSINESS INVOLVEMENT SCREENING
- Screening company’s involvement in various activities including for example the production of tobacco and alcohol or involvement in *
- Screening in a number of ways, e.g. True/False, % revenues, or % ownership.
CONTROVERSIES
- Controversies connected with a company’s business practices, which has negative company and ESG impacts
- Flags non-compliance with global norms – for example the UN Global Compact
- Determine a company’s alignment with the Sustainable Development Goals
Industry Recognition
Capitalsave Investment Partners resources has been a signatory of the Principles for Responsible Investment (PRI) since April 2013, ranking ahead of the peer median score in all categories in 2020.
An integrated approach for responsible investing
Investing in a sustainable and responsible manner has rapidly become a much more important consideration for banks, asset managers, their clients, shareholders and society at large. At Capitalsave Investment Partners we believe when selecting and managing investments we must take ESG criteria into account. .
Despite its many challenges we see integration as the most sensible approach to meet the requirements of our investors and the broader aims of the economy, the environment and society. Although this will be an evolving journey, it is our intention to clarify our approach to this significant topic through the selection of the below explanatory pieces.