{"id":2854,"date":"2020-11-04T02:37:00","date_gmt":"2020-11-04T10:37:00","guid":{"rendered":"https:\/\/dev.darsky.com\/dalton\/?p=2854"},"modified":"2020-11-04T14:17:24","modified_gmt":"2020-11-04T22:17:24","slug":"sustainable-investment-philosophy","status":"publish","type":"post","link":"https:\/\/dev.darsky.com\/dalton\/sustainable-investment-philosophy\/","title":{"rendered":"Sustainable Investment Philosophy"},"content":{"rendered":"

November 4, 2020<\/strong><\/p>\n

Dalton Investments LLC (\u201cDalton<\/u>\u201d) previously made the decision to formalize and publish its Sustainable Investment policy on March 18, 2018, amended as of November 14, 2019, to incorporate the UN Principles for Responsible Investment, on January 1, 2020, to incorporate UCITS-specific processes and on November 2, 2020, to incorporate the Climate Action 100+ initiative.<\/p>\n

This policy covers the integration of Environmental, Social and Governance (\u201cESG<\/u>\u201d) risk analysis into Dalton\u2019s investment process and Dalton\u2019s policy on stewardship of client assets. Dalton makes its Sustainable Investment policy public due to the increasing desire from clients to understand and assess the approach of asset managers towards sustainable investment and our desire to provide as much transparency as possible to clients. As long-term focused investors, Dalton takes our role as stewards of client capital seriously and frequently engages with company management in order to maximize risk adjusted returns for our clients. We also have a primary focus on capital preservation and as such seek to understand the key risks, including ESG risks, of individual investments we have made on behalf of our clients.<\/p>\n

Sustainable Investment Policy<\/strong><\/p>\n

As long-term focused investors, we take our role as stewards of client capital seriously and actively engage with company management in order to maximize risk adjusted returns. Dalton\u2019s process does not begin by excluding companies based on environmental or social risks, rather it incorporates ESG into our holistic assessment of potential investments. Our emphasis is on the governance risk. The particular focus relates to two key elements of the firm\u2019s investment philosophy:<\/p>\n

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  1. Investing in businesses where our interests as minority shareholders are aligned with the company\u2019s management, and<\/li>\n
  2. Where the company\u2019s management has a track record of good capital allocation decisions, which have created long term value for all shareholders.<\/li>\n<\/ol>\n

    Another of Dalton\u2019s key criteria is to invest in what we consider to be good businesses. Environmental and social risks (either at an industry or company-specific level) are considered in our assessment of the strength of individual businesses and the risks associated with them. Dalton uses a number of resources to deepen its knowledge of business and governance practices at investee companies, including daily market news, proxy voting research and the use of dedicated internal resources focused on wider ESG considerations.<\/p>\n

    Furthermore, Dalton seeks to take an active approach to ownership of its portfolio companies, in an effort to maximize risk adjusted returns for clients and fulfill its fiduciary duties. Where possible and when deemed appropriate, Dalton will engage companies seeking to promote positive change on ESG matters. We believe that dialogue with investee companies as well as proxy voting are ways to add value to the investment process and that stronger ESG practices will be reflected in better company and stock performance. Through constructive engagement with company management, from a medium term to long term perspective, we believe that we can help promote an investee company\u2019s sustainable growth. Additionally, we seek to enhance ESG practices at investee companies through proxy voting. From time to time, Dalton will collaborate with other institutional investors for collective engagement with investee companies, as necessary. On August 31, 2020, \u00a0Dalton became a signatory to the Climate Action 100+ initiative and committed to collectively engaging companies to:<\/p>\n