Kennox & Sustainability
Sustainability lies at the heart of all Kennox investment decisions and we are signatories to the UN supported Principles for Responsible Investment.
The basis of our entire investment process is analysing the core issues for a company, both strengths and weaknesses, to best understand the sustainability of its earnings and its franchise. As long term investors, ESG-related factors are a key ingredient in this assessment, affecting as they do the future sustainability of the company. We will invest only in companies that bring overall benefit to society. Aligned to the 17 UN Sustainable Development Goals, if we assess that a company or an industry causes significant net harm to its employees, customers, suppliers, the environment, or other aspects of society at large, we will not invest at any price. For example, under this framework we will not invest in gambling, tobacco, pornography or armament companies.
Our investment team is fully responsible for both the Kennox ESG policy and its implementation – there is no better way to ensure that ESG is fully integrated in all aspects of our investment discussion and decision-making.
Stewardship & Engagement
In the regular course of work, the Kennox investment team assesses and discusses key stewardship issues for individual companies. These can be strategic (such as acquisitions), financial (such as acceptable levels of debt) and ESG considerations (such as climate, working conditions, diversity).
Regularly, this will lead to Kennox deciding to engage with a company on an issue. When it occurs, Kennox opens discussion with the company so as to understand the nuances regarding the issues and the company’s perspective. Where escalation is needed, we will challenge a company on the issue, and continue to challenge, as long as necessary.
Kennox believes that voting is a key right and responsibility of investors. We vote at all the shareholder meetings of our investee companies, ensuring that our votes are aligned with the long-term interests of our clients. We pay particular consideration to specific issues, such as executive remuneration and share dilution and ESG issues, but consider all issues relating to the company when casting our vote.
Where appropriate, Kennox collaborates with other shareholders and stakeholders. Kennox is a member of the Investor Forum, a group of investors set up to work together to facilitate dialogue with companies and create value through long term solutions.
We participate in active ownership of the stocks in the Fund’s portfolio through commitment and adherence to the UK Stewardship Code. Our ESG, Stewardship and Engagement policy is available here and, in accordance with SRD II, our voting record is publicly disclosed.
If you would like to discuss any aspect of our approach to responsible investing, we would be pleased to hear from you.