ESG and Our Portfolio Companies

The ESG movement is becoming increasingly powerful, and shareholders are holding Boards to a higher standard.

This phenomenon is playing out across the Australian business landscape, and companies will have to adapt or suffer the consequences.

One consequence of not embracing ESG principles and reporting is the fact that large pools of ESG capital will find other homes for their money.

We think that companies that take ESG seriously, will over time, become more attractive investments.

Bloomberg highlighted the increasing prominence of ESG funds in Australia in the article below:

Key takeaways:

• AGL’s well publicised battle with Atlassian co-founder Mike Cannon-Brookes is the tip of the ESG iceberg - shareholder ESG resolutions have been steadily increasing since 2017
• Boards that don’t take ESG seriously are increasingly being shown the door by shareholders and forced to step down
• Accountability initiatives are improving in response

What’s next? We expect the ESG movement to make up an ever larger share of the overall investment capital in Australia. Data from Calastone shows that flows into ESG funds in Australia rose by 338% to $2.96 billion in 2021 and we expect that trend to continue in 2022.

As fund managers Investing in small cap stocks, we encourage all our portfolio companies to adopt an ongoing ESG improvement program and quarterly ESG reporting.

You can view ESG disclosures made by our portfolio companies