Responsible Investment

As a research-based investment manager committed to delivering consistent and superior investment returns to our clients, Northward Capital assesses all factors that may influence the valuation and earnings of the companies we analyse. In today's rapidly changing and evolving investment environment, we recognise that environmental, social and governance (ESG) factors have grown in significance as issues that may affect the value of a company. As an integral part of our responsible investment strategy, Northward Capital adopted the United Nations Principles for Responsible Investment (UNPRI) as at September 2008 (www.unpri.org)

The UNPRI

Launched in April 2006, the Principles are voluntary and aspirational and in essence are a set of global best-practices for responsible investment. The principles are set as follows:

  • Incorporate ESG issues into investment analysis and decision-making processes.
  • Be active owners and incorporate ESG issues into our ownership policies and practices.
  • Seek appropriate disclosure on ESG issues by the entities in which we invest.
  • Promote acceptance and implementation of the Principles within the investment industry.
  • Work together to enhance our effectiveness in implementing the Principles.
  • Report on our activities and progress in implementing the Principles.

Northward Capital's Approach to Responsible Investment

As a business Northward Capital takes ESG issues seriously in our investment decision-making practices and our active equity proxy voting policy. We believe that corporate sustainability is a useful barometer of business management, and that companies which manage ESG issues competently have a greater likelihood of enhancing earnings and long term shareholder value than those who do not.

We believe that factors affecting long term corporate sustainability, covering ESG, should be incorporated into fundamental equity research. Our implementation of responsible investment includes the development of our portfolio managers knowledge and understanding of material ESG risks and opportunities.

Adopting the principles does not mean we are adopting Socially Responsible Investing. We do not exclude companies from the investment universe based on ethical judgements or negative screens. We seek to play a constructive role through ongoing development and improvement of ESG practices. By encouraging the companies in which we invest to look at their ESG practices, we are helping to promote a higher level of transparency from the business community.

Signing to these principles represents a very real commitment to incorporating ESG issues into our investment process. It also recognises that applying the principles should lead to better long term financial returns and closer alignment between our objectives and those of society at large. Our responsible investment framework will evolve and progress over time. By implementing ESG practices, we as fund managers will be better informed.

Northward Capital is also committed to improving ESG practices within our own business.