Assisting First State Stewart Asia with the tools to galvanise investees around ESG
First State Stewart Asia aimed to enhance their investment stewardship approach with a methodical process to evaluating portfolio companies’ ESG efforts
Challenge
First State Stewart Asia (FSSA) is an investment management team that specialises in equity funds and manages over US$27 billion across Asia and emerging markets. In recent years, there has been an increase in investor interest to understand how companies manage ESG issues. Fuelled by this and recognising the value in responsible investment, FSSA aimed to enhance their investment stewardship approach with a methodical process to evaluating portfolio companies’ ESG efforts.
Solution
FSSA engaged The Purpose Business to develop a knowledge management tool that would help analysts and portfolio managers have a deeper understanding around ESG issues as well as facilitate more meaningful discussions with their portfolio companies. The tool needed to address not only the issues with the most direct financial impact to the business but also be sensitive to specific factors that inherently influence individual businesses, such as regulation and risk. TPB developed a tool to organise ESG issues that considered both internationally recognised frameworks such as the Sustainability Accounting Standards Board’s approach to materiality as well as a company’s existing business strategy, geographical context, impending regulations and potential opportunities.
In addition, due to the brevity of face to face meetings, TPB undertook the challenge of distilling the information for succinct but comprehensive discussions around the company’s most pressing and imminent ESG issues.
Impact
The final knowledge management tool was rolled out to selected pilot companies across different industries within FSSA’s portfolio. It will further be populated for other companies in hopes of facilitating more impactful discussions as well as galvanising them to better understand the implications of their ESG activities. The tool also helps to build capacity within FSSA’s team, advancing their aspirations around responsible investment.
“What we like about TPB’s approach is that it is refreshingly pragmatic. There is no box-ticking to their insights, but a knowledgeable focus on materiality and global best practice.”