Responsible Investing

Environmental, Social and Governance (ESG) issues are key investment risk management tools.

ESG indicators highlight non-financial risks - these are not the only indicators of risk, but they form part of a holistic credit process.

Our commitment

The purpose of integrating ESG factors into the investment process is to improve the analysis of all investments, promote improving standards of practice, and assist the investment process to mitigate any ESG risks to potential or existing loans or investments.

The application of ESG analysis and screening is defined by our clients’ expressed preferences. Where no preference is expressed, we exercise judgement and integrate ESG issues into the investment analysis and decision-making process with the view of mitigating overall portfolio risk. At all times the fund’s asset allocation or investment strategy must prevail to ensure that risk-adjusted returns are achieved. Principles of sound portfolio management should not be compromised in the RI or ESG screening process.

Futuregrowth endorses the Code for Responsible Investment in South Africa (CRISA) and is a signatory to the Principles for Responsible Investment (PRI).

CRISA Annual Disclosure statement
More about the PRI

our process

We apply ESG screening, proxy voting, and active ownership and engagement as key components of our responsible investment strategy. An output of this process is our range of developmental investments.

Responsible investment policy
View our development funds
About developmental investments

"Consciously seeking to invest client funds in a responsible manner."

ESG screening

Our approach

Futuregrowth believes that engagement with investee companies on matters of ESG is appropriate to ensure long-term sustainability for all stakeholders. We believe in collaboration with investee companies and engaging with management to encourage companies to think about their approach to integrating, disclosing and reporting on ESG issues.

We believe that our role within the investment community is to encourage companies to aspire to responsible ways of doing business, by engaging and collaborating with them. We will jointly aspire to change the landscape of the investment community and be more responsible corporate citizens.

Incorporating ESG into an investment process

We believe that investment processes may profitably and suitably include the analyses of environmental, social and governance factors (ESG) in the assessment of investments.

Futuregrowth’s ESG framework integrates ESG issues into the investment analysis and decision process with the view of mitigating overall portfolio risk.

The ESG framework seeks to achieve the following outcomes:

  • Screen investments using the ESG factors as part of the due diligence process; Evaluate ESG risks;
  • Monitor the ESG activities of companies;
  • Measure how companies improve over time;
  • Engage with companies when risks are identified;
  • Report to stakeholders on ESG issues in our investments in a transparent and accountable manner.

Why ESG matters

Proxy voting

The King III report on corporate governance strongly recommends that shareholders become actively involved in the way companies are governed. In addition, there is an increasing trend worldwide towards more shareholder activism. Share ownership rights, which include voting rights in person or by proxy, are financial assets. They must be managed with the same care and diligence as any other investment asset, because the integrity and value of shares may be affected by the outcomes of voting proposals. Shareholders have the power through voting rights to influence the management of a company. Actively exercising these rights through active ownership activities is an effective way of enhancing portfolio value. Consequently, Futuregrowth views seriously its responsibility to exercise voting authority over securities, which form part of its clients’ portfolios.

Corporate Governance & Proxy Voting Policy

Proxy voting results 2016

Active ownership & engagement

Futuregrowth employs active ownership activities that assists us with engaging management with the purpose of effecting change and challenging them on the sustainability of their organisations' activities. Where possible we engage on various matters that affect the triple bottom line (taking into consideration economic, social & environmental issues which could affect the profitability of a company), including filing shareholder resolutions, attending annual general meetings, debt-holder meetings and other relevant meetings, engaging in negotiating debt related terms and vote proxies and lender related issues. Through this process of active ownership we encourage companies to disclose and be accountable to stakeholders.