Principles of Responsible Investing
Cadiz Asset Management is committed to the promotion and support of Responsible Investing in South Africa. We consider the inclusion and integration of Responsible Investing principles to be a strategic underpin in the way we manage our business, interact with our stakeholders, and manage our client mandates.
We are therefore active in all the available forums including:
- The United Nations Principles for Responsible Investment – Cadiz Asset Management is a signatory (2008) and an active participant in working groups
- The South African Impact Investing Network – Cadiz Asset Management is a lead sponsor
- The Carbon Disclosure Project – Cadiz Asset Management is a Gold Member
- The Codes for Responsible Investing South Africa (CRISA) – Cadiz Asset Management supports the introduction of these codes and formed part of the committee responsible for their creation.
INTENTIONAL, ACTIVE OWNERSHIP AND ENGAGEMENT
We believe that engagement with our investee companies is essential to the extent to which it is necessary to ensure the delivery of preferred outcomes on any issues enhancing their enduring sustainability and valuation in the best interests of our customers. The extent of engagement will vary depending on a number of factors which include: the requirements as specified in customer mandates, issues that arise as part of our due diligence or analytical process with respect to ESG and financial factors, and the extent to which the issues identified have an impact on company valuation and sustainability.
If the achievement of our objective to enhance the sustainability of our investments appears difficult or impossible in isolation, we will actively seek to engage with like minded investors to effect the required change. The extent of this engagement would be determined by the extent to which collaboration is required or possible in each specific circumstance.
PROXY VOTING GUIDELINES AND RESULTS
The execution of proxies and voting instructions is the primary means by which share owners can influence a company’s operations and corporate governance. It is therefore important for share owners to exercise their right to participate in the voting process and make their decisions based on a full understanding of publicly available information.
The Cadiz Asset Management proxy voting policy is currently guided by the ISS International Proxy Voting Guidelines (last update Dec 2011) as well as the ISS SA Specific Guidelines (last update Feb 2012). These guidelines combined with the King III recommendations, the latest version of South Africa’s best practice code, as well as the recent changes to the Companies Act 2008, allow Cadiz Asset Management to lead the field of engagement and proxy voting. Proxy Voting Records 2017 – 2016 – 2015 – 2014 – 2013 – 2012.
THE UNITED NATIONS-BACKED PRINCIPLES FOR RESPONSIBLE INVESTMENT
The United Nations-backed Principles for Responsible Investment Initiative (PRI) is a network of international investors working together to put the six Principles for Responsible Investment into practice.
The Principles were devised by the investment community. They reflect the view that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios and therefore must be given appropriate consideration by investors if they are to fulfil their fiduciary (or equivalent) duty. The Principles provide a voluntary framework by which all investors can incorporate ESG issues into their decision-making and ownership practices and so better align their objectives with those of society at large.
The PRI Initiative was created after the launch of the Principles to help investors to implement the Principles. The Initiative is managed by the PRI Secretariat and supports investors by sharing best practice, facilitating collaboration and managing a variety of work streams. The Initiative is incorporated as a not-for-profit company limited by guarantee.
THE PRINCIPLES FOR RESPONSIBLE INVESTMENT
As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognise that applying these Principles may better align investors with broader objectives of society.
Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
- We will incorporate ESG issues into investment analysis and decision-making processes.
- We will be active owners and incorporate ESG issues into our ownership policies and practices.
- We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will each report on our activities and progress towards implementing the Principles.
The Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices. The process was convened by the United Nations Secretary-General.
In signing the Principles, we as investors publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the Principles over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society.
We encourage other investors to adopt the Principles.
THE CODE FOR RESPONSIBLE INVESTING IN SOUTH AFRICA (CRISA)
The revised Regulation 28 of the Pension Funds Act requires pension funds to consider any factor that may materially affect the sustainable long-term performance of the fund’s assets. Cadiz Asset Management are signatories to the Code for Responsible Investing in South Africa (CRISA). CRISA gives guidance on how the institutional investors should execute investment analysis and investment activities and exercise rights to promote sound governance. To learn more, please read the CRISA FAQs.
We subscribe to the five key principles in the Code:
- We incorporate sustainability considerations, including environmental, social and governance, into our investment analysis and investment activities as part of the delivery of superior risk-adjusted returns to the ultimate beneficiaries.
- We demonstrate our acceptance of ownership responsibilities in our investment arrangements and investment activities.
- Where appropriate, we consider a collaborative approach to promote acceptance and implementation of the principles of CRISA and other codes and standards applicable to institutional investors.
- We recognize the circumstances and relationships that hold a potential for conflicts of interest and are committed to proactively managing these when they occur.
- We aim to be transparent about the content of our policies, how the policies are implemented and how CRISA is applied to enable stakeholders to make informed assessments.
GLOBAL INVESTOR STATEMENT ON CLIMATE CHANGE
Cadiz Asset Management was one of 285 signatories worldwide of the 2011 Global Investor Statement on Climate Change. As investors we believe that it is important that the climate change and clean energy policy agenda is backed by a credible investment framework. For more information, please download the Investor Statement document by clicking here.
THE CARBON DISCLOSURE PROJECT (CDP)
We are a gold member of the Carbon Disclosure Project. The Carbon Disclosure Project (CDP) is an independent not-for-profit organisation working to drive greenhouse gas emissions reduction and sustainable water use by business and cities. CDP reports on and aims to improve the disclosure of the carbon emission levels of major South African listed and unlisted companies.
SOCIALLY RESPONSIBLE INVESTMENTS
As pioneers in this area of investing, and as the leading Socially Responsible Investment house in South Africa we have a unique ability to provide investors with credible, measurable and commercially viable investments with a track record to prove it. We are extremely proud that our efforts to build Socially Responsible Investing have been recognised and promoted through a number of recent awards:
SOCIALLY RESPONSIBLE INVESTMENT MANAGER OF THE YEAR (2009, 2010)
- Socially Responsible Investments: Principal Officers Association Imbasa Yegolide Award
SHORTLISTED FOR WORLD SOCIALLY RESPONSIBLE ASSET MANAGER IN AFRICA AWARD (2009, 2010)
- World Finance Banking Awards
FINALIST IN THE BUCKMINSTER FULLER CHALLENGE AWARD (2009)
- The Buckminster Fuller Challenge is an annual international design challenge to support the development and implementation of a strategy that has significant potential to solve humanity’s most pressing problems.
FINALIST IN THE GLOBAL DEVELOPMENT NETWORKS’ MOST INNOVATIVE DEVELOPMENT PROJECT AWARD (2009)
- This is an award for projects that are carrying out original and path-breaking work in the development field and meet certain set criteria.
INVITED PARTICIPANT IN THE DEVELOPMENT OF THE GLOBAL REPORTING INITIATIVE SOCIAL SECTOR SUPPLEMENT (2008, 2009)
- The United Nations Environment Programme Finance Initiative.
Cadiz believes that responsible and caring corporate citizenship is a key component of true business leadership and recognises its responsibility as a corporate citizen towards its stakeholders and towards the communities within which it operates. Business has a responsibility to help meet the needs of society at large and an obligation to step forward and contribute time, energy and resources to better the world in which it operates, a strategy which will also determine its success within that world. As such, the Cadiz Foundation is committed to playing an active role in the development of a market democracy that is characterised by sustainable development.
As a practical example of the way we integrate ESG principles into day to day business decisions, we focus our sponsorship on events that have a positive community focus. The Cadiz way is unique and a large focus of what we do in business and sponsorship is giving back. We manage this process through our focused sponsorships in swimming and other sport development.
CONFLICT OF INTEREST
To view our Conflict of Interest Management Policy click here.