Sustainability analysis and corporate engagement
As long-term investors, the notion of sustainability is fundamental to our company research. In our view, sustainability analysis is simply the consideration of investment issues beyond the immediate term. Understanding and evaluating a company’s approach to sustainability is therefore part of our risk-mitigation approach.
We focus on the stewardship of the businesses we own, as we believe that quality managers and good governance should ensure that sustainability matters are addressed appropriately. In the long run, we believe companies will increasingly need to account for societal and environmental costs, delivering on all fronts consistently and sustainably – or eventually cede share to those that do. As such, our sustainability analysis – incorporating both the challenges and the opportunities – has a significant impact on our views of a company’s quality.
We take a stakeholder-alignment approach to sustainability, which considers the issues from the perspective of owners, employees, suppliers, customers and society at large. Using this framework, each company is benchmarked against its peer group on a range of environmental, social and governance metrics. This assessment forms the baseline for our analysis and highlights any gaps which may require further engagement.
Importantly, we believe that there is no such thing as a perfect company. Sustainability matters are complex, and the markets we invest in are at varying stages of development. As such, we focus on the direction of travel and partner with companies to encourage them to improve.
Key stakeholders
Owners
Minority owners
Employees
Headquarters and
operational
Suppliers
All tiers
Customers
B2B and B2C
Society
“Average” person
Key sub-industry questions help us to determine
Learn more about our approach to responsible investment
Exclusions policy
In seeking quality companies, we first remove the businesses we would not invest in. While some are screened out by FSSA's exclusions policy, most companies are excluded through the team’s research and comprehensive understanding of corporate histories and misdemeanours, governance issues, bad actors, weak franchises and sustainability challenges.
Climate change
Climate change is a key consideration in FSSA’s investment process. We accept the evidence of climate change and the need to transition to a low-carbon global economy. Read more about how we manage climate risks and learn about our decarbonisation targets in our climate change statement.
Carbon footprint
As allocators of capital and stewards of our clients’ assets, we recognise that the decisions we make as investors can influence the nature and speed of the transition to a low carbon global economy. Our portfolio carbon footprint is available quarterly and provides a combined footprint for all our equity portfolios.