We believe companies with this approach are better positioned to perform over the long term, either through higher market valuations or increased profitability.

ESG scores are highly subjective. As a result, we do not rely on third-party service providers to determine a company’s ESG metrics, nor do we think a check box approach works well. Instead, we believe that each company requires its own analysis to understand the nuances and unique circumstances it faces. This approach is particularly important when investing in emerging countries, where ESG data is often lacking.

While assessing a company’s ESG standing involves significant judgment, it is not a fruitless exercise. On the contrary, by engaging with companies and discussing ESG issues, we can help companies adopt better practices, help ourselves become better investors, and help produce better societies.

Suffice to say, we consider ESG investing core to our investment approach, and we aim to evolve these practices as we develop our investment process in the years to come.

Introspect Capital is a signatory of the United Nations-supported Principles for Responsible Investment (PRI), an investment framework which aligns with, and supports, our goal of understanding the investment implications of ESG factors and incorporating them into investment decisions.