Environmental, Social and Governance (ESG)
OxCap considers ESG issues (positive or negative) to form a natural and important part of the fundamental research process given the direct impact on the financial performance of companies. Consequently, all members of the investment team are charged with understanding the OxCap ESG philosophy and policies, and effectively applying them throughout the investment process.
The exclusion screen in the beginning of the idea generation process removes tobacco and controversial weapons companies. OxCap uses a materiality map to facilitate a focus on areas of ESG risks for companies of particular industries for further investigation and engagement with the company’s management. Before inclusion into the portfolio, an ESG score is generated, and momentum of ESG metrics is a key consideration. Companies with a score of 1 are rejected.
OxCap is a signatory of the United Nations-backed Principles for Responsible Investment. We have long adhered to these principles as sound practice when managing money and supporting it reflects our desire to promote them as a matter of good corporate governance.
Ox Capital Management Environmental Social and Governance (ESG) Policy
Our ESG Policy contains more information on our ESG philosophy and process.
Our Proxy Voting Policy and Proxy Voting Dashboard discloses how we approach proxy voting and transparency around the way we vote.
Sustainability Related Disclosures
Disclosures relating to sustainability of the Dynamic Asia Fund relating to the Sustainable Finance Disclosure Regulation (SFDR).
The following Funds have been classified as Article 8 products for the purposes of SFDR:
- Ox Capital Dynamic Asia Fund
- Sustainability risk policy statement:
The Fund promotes environmental and/or social characteristics in a way that meets the specific criteria contained in Article 8 of SFDR but does not have sustainable investment as its objective in a way that meets the specific criteria contained in Article 9 of SFDR.
Notwithstanding this, the ICAV still considers that the Fund is managed responsibly. The Investment Manager evaluates and integrates Sustainability Risks and other relevant ESG factors at multiple stages throughout the investment process. This is considered an essential element in contributing towards long-term investment returns and an effective risk-mitigation technique. The Investment Manager has carried out an assessment of the impacts of Sustainability Risks on the returns of the Fund and does not expect that it will materially impact the expected risk or return characteristics of the Fund currently. The Investment Manager takes a precautionary approach to Sustainability Risks. Based on the assessment of the Investment Manager, the Investment Manager will exclude companies considered to have serious ESG violations or facing acute Sustainability Risks (outlined in further detail below in the section titled “The ESG Policy”). The Investment Manager also applies a positive screen to determine investments to be made by the Fund when seeking sustainable investment opportunities.
Risks and factors considered by the Investment Manager include but are not limited to:
- Environmental factors such as pollution and contamination, land degradation, water use and water scarcity risks, carbon intensity and energy transition; and physical climate change risks;
- Social factors include respect for the rights of indigenous peoples, workforce diversity and the fair and equitable treatment of employees and stakeholders; development of deprived areas and the prevention of modern slavery or the use of child labour and positive engagement with and support of local communities; and
- Governance factors whereby the Investment Manager will seek to invest in companies that can demonstrate best practice in (i) corporate governance and risk management; (ii) financial governance, reporting and transparency; (iii) ESG implementation; (iv) board representation and diversity; (v) anti-money laundering; and (vi) anti-bribery.
The Investment Manager’s assessment of these Sustainability Risks is based on both internal and externally sourced research and analysis. The Investment Manager utilises external research on the compliance of companies with global norms and conventions, including the UN Global Compact, the OECD Guidelines for Multinational Enterprises, ILO Tripartite Declaration of Principles, UN Draft Human Rights Norms for Business, UN Guiding Principles on Business and Human Rights, and other sector specific standards.
2. No Consideration of Principal Adverse Impact Statement or Consideration of Principal Adverse Impact Statement:
Notwithstanding that the Investment Manager integrates the consideration of Sustainability Risks into the investment decision-making process, the Investment Manager does not consider the principal adverse impacts of its investment decisions on Sustainability Factors in respect of the Fund. The Investment Manager has opted against doing so, primarily because such information that would be necessary to enable the Investment Manager to make this assessment is not yet available for all the markets or companies in which the Fund may invest.
The Fund does not expect to make any Sustainable Investments.
3. Remuneration Policy Summary:
The Investment Manager has put in place a Remuneration Policy which governs the fixed and variable remuneration structure of its employees. The Investment Manager is committed to implementing a remuneration framework where adherence to the principles set out herein is part of the performance management framework and can directly impact the overall remuneration of employees.