We are not activists and do not invest with the intention of making any moral or ethical judgments. However, we view engagement as a valuable tool to better understand management’s long-term strategic vision and discuss how they manage ESG risks and opportunities, among other issues. We meet regularly with the management teams of portfolio companies, and when merited, we proactively express our views regarding business strategy, governance, financial reporting, executive compensation, and other stakeholder considerations. We reserve the option to sell our shares if management is unable to address our concerns, which could reduce our conviction in the company’s fit with our investment criteria.
We are committed to providing transparency into our ESG initiatives and how we think certain factors may or may not relate to the long-term growth prospects of the companies we own. We welcome client questions about the extent to which we have incorporated our understanding of relevant ESG factors into each investment case. We use a variety of external sources to varying degrees (e.g., ESG databases, governance advisory firms, academic researchers) to identify key ESG issues for the businesses we own. However, we do not rely on third-party opinions when building conviction in our investment views, as we seek to maintain independence and objectivity in the execution of our proprietary, bottom-up research.