Chester believes that its fiduciary duty to its clients includes taking environmental, social and governance risks (ESG) into consideration in its investment decisions. Chester also recognises its responsibility to invest client funds prudently for wealth creation of its clients. Our ambition is to protect and then grow generational wealth.
Over the short to medium term corporate governance has an important impact on the economic value of firms. Over the long term, economic value can only increase if environmental and social values are embedded into sustainable business practices.
Chester considers Environmental Social and Governance (ESG) policies to help screen our potential investment choices, looking at the impact on the investment’s performance. Our team aims to be aware and monitor key ESG issues for its investments. While we don’t construct our portfolios purely on ESG grounds, we may remove a company from our investment universe based on ESG considerations.
Chester is not a shareholder activist. We provide our opinion as shareholders by voting and through proactive company engagement. Generally, our strategy when disagreeing with a management team's culture or strategic direction is to exit the investment and allocate capital elsewhere.
We may consider any of the following ESG factors:
Greenhouse emissions and pollution
Preservation of heritage and wilderness areas
Management of climate change
Supporting sustainable economic development
Recycling and waste management
Community relationships and engagement
Inclusive workforce and business practices
Indigenous peoples; land rights
Modern slavery and workforce conditions
Human right abuse
Ownership and alignment
Board experience and composition
Ethical and responsible decision making
Timely and balanced disclosure of material matters affecting the company
Human right abuse
Conflicts of interest
Management retention and incentive schemes