The United-Nations-supported Principles of Responsible Investment (PRI) is the world’s leading proponent of responsible investment. We are pleased to share with you that we were recently awarded an A in multiple categories after being assessed on our approach to incorporating environmental, social and governance (ESG) issues in investing.
The PRI is an independent body that ‘encourages investors to use responsible investment to enhance returns and better manage risks.’ It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.
Allan Gray Australia became a signatory to the UNPRI in 2018 and each year we submit answers to a questionnaire from the PRI about our ESG activities and our investments. This year was our first year of reporting. We recently received our results and we are delighted to have received an ‘A’ for Strategy & Governance, an ‘A’ for Listed Equity – Incorporation, and an ‘A+’ for Listed Equity – Active Ownership.
As long-term investors, we have always believed it is critical to understand the full range of factors that might affect a company’s business and its sharemarket performance. As part of our bottom-up research process, our analysts consider a range of factors that might affect a company’s intrinsic value, which can include ESG issues. Specifically, our focus on ESG issues relates to their potential impact on the sustainability of a company’s earnings and accordingly, our assessment of the company’s intrinsic/fundamental value.
For example, if a company makes money in a manner that is not sustainable from an environmental or social perspective, we will not gain conviction in the sustainability of its current level of profits. Similarly, the consideration of governance issues is a critical part of our assessment of a company’s intrinsic value.
Our approach to engagement is very much based on acting in the best interests of the Funds we manage on behalf of our clients, and to enhance and preserve shareholder value. We generally consider private engagement to be more constructive than public engagement, but on rare occasions we have taken a public stance, raising our concerns with our clients, other asset managers and stakeholders so that we may enact change.
You can read our Statement on Responsible Investing here.
You can also read our PRI-published Public Transparency and Assessment Report here.
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Equity Trustees Limited ABN 46 004 031 298, AFSL No. 240975 is the issuer of units in the Allan Gray Australia Balanced Fund ARSN 615 145 974, Allan Gray Australia Equity Fund ARSN 117 746 666 and Allan Gray Australia Stable Fund, ARSN 149 681 774 (Allan Gray Funds) and units in the Orbis Global Equity Fund (Australia registered) ARSN 147 222 535, Orbis Global Equity LE Fund (Australia registered) ARSN 613 753 030 and Orbis Global Balanced Fund (Australia registered) ARSN 615 545 170 (Orbis Funds). Allan Gray Australia Pty Limited ABN 48 112 316 168, AFSL No. 298487 is the investment manager of the Allan Gray Funds.
Past performance is not a reliable indicator of future performance. There are risks involved with investing and the value of your investments may fall as well as rise. This represents Allan Gray Australia Pty Limited and Orbis Investment Advisory Pty Limited’s view at a point in time and may provide reasoning or rationale on why we bought or sold a particular security for the Allan Gray or Orbis Funds or our clients. We may take the opposite view/position from that stated, as our view may change. If this article is authored by Orbis, it does not prohibit the Orbis Funds from dealing in the securities before or after this article is published. This article constitutes general advice or information only and not personal financial product, tax, legal, or investment advice. It does not take into account the specific investment objectives, financial situation or individual needs of any particular person and may not be appropriate for you. We have tried to ensure that the information here is accurate in all material respects, but cannot guarantee that it is.
You should consider the relevant funds’ Product Disclosure Statement (PDS) or Information Memorandum (IM), as applicable, before acquiring, holding or disposing units in the Allan Gray or Orbis Funds. The PDS or IM can be obtained from
www.orbis.com.au and www.allangray.com.au.
Target Market Determinations (TMDs) for the Allan Gray products can be found at
allangray.com.au/PDS-TMD-documents,
while TMDs for the Orbis Funds can be found at www.orbis.com.au on the 'Forms' page under 'How to Invest'. Each TMD sets out who an investment in the relevant Allan Gray or Orbis Funds might be appropriate for and the circumstances that trigger a review of the TMD.
Managed investment schemes are generally medium to long-term investments. They are traded at prevailing prices and the value of units may go down as well as up. There are risks with investing the Fund and there is no guarantee of repayment of capital or return on your investment. Subject to relevant disclosure documents, managed investments can engage in borrowing and securities lending. A schedule of fees and charges is available in the PDS.