MEDIA RELEASE: ECP Asset Management’s sustainability report for 2022 has found that the majority of businesses believe they will be impacted by climate risks, whether physical or transitional.
The report includes a survey of all its portfolio investments which was conducted to better understand ESG-related issues across all companies within the portfolio.
30 per cent of ECP’s investments have publicly stated net zero targets and ECP’s head of ESG officer, Mr Jason Pohl, said that in the coming year it can be expected that companies continue to publish net zero targets, with some companies already highlighting this process is underway.
“Not all companies will be exposed to climate change risks but what is of importance to us is that management is aware of the risks to their business operations and steps are taken to mitigate these over the long-term,” said Mr Pohl.
The report also showed that half of the surveyed companies have been a beneficiary of COVID and over 90 per cent of those hired new employees, whilst many other companies pulled back on incremental spend.
“In times of stress, resilient companies can put their foot on the accelerator and continue to invest in their resources for future growth,” said Mr Pohl.
Modern slavery continues to be a focus and ECP’s survey found that 80 per cent of its investments have a publicly available modern slavery statement, with around 71 per cent periodically assessing modern slavery within their supply chain.
Governance is another area the survey covered and showed that 97 per cent of surveyed companies had independent directors on its boards. More than 80 per cent had an independent chairperson.
The survey conducted on ECP’s portfolio reflects the ongoing trends for 2023 according to Mr Pohl.
“High quality franchises typically exhibit strong ESG credentials. When setting long-term corporate strategies, 94 per cent of our survey respondents reported that they do take into consideration ESG issues.
“Further to that, we found that approximately 88 per cent of companies surveyed have a designated ESG officer, or nominated person responsible for ESG matters,” said Mr Pohl.
ECP Asset Management ’s investment service and products have recently been certified by the Responsible Investment Association Australasia (RIAA). This year, ECP Asset Management has been recognised as a Responsible Investment Leader for 2022.
Responsible Investment Leaders are selected based on continued commitment to responsible investing. RIAA take into consideration environmental, social and governance (ESG) factors, strong and collaborative stewardship and transparency in reporting activity as well as the societal and environmental outcomes achieved.
CIO and chairman of ECP Asset Management, Dr Manny Pohl said that responsible investment is an approach to investment that explicitly acknowledges the relevance to the investor of environmental, social and governance factors, and of the long-term health and stability of the investment as a whole.
“The sustainability of a business model is more relevant today than ever before.
“As sustainability has permeated the minds of consumers, ESG-related impacts and activities are having a real impact on the financial performance of companies.
“ESG issues are highly relevant to a better understanding of the long-term potential of an investment and its predictability of returns over time,” said Dr Pohl.
Further, Dr Pohl said that today companies are being held to a higher standard to maintain a social licence to operate, and this is only going to increase.
“For business owners, sustainable practices and a long-term mindset is vital for any operator in this modern, rapidly changing world.
“Incorporating sustainability into one’s decision-making will ultimately lead to superior investment returns,” said Dr Pohl.
The ECP Sustainability Report 2022 is available here: https://ecpam.com/assets/pdf/ECP_SustainabilityReport_2022.pd
