Stewardship process

Poppy field near Alvescott

The Stewardship team provides input at specific inflection points within the investment process.

We begin with initial research using our proprietary ESG risk matrix to qualify companies for inclusion in the investable universe. Companies that score an E (the lowest score) for ESG risk are not considered for investment. Once included in the investable universe, continuous stewardship and risk management involve active voting on all holdings and engaging with companies to bring about positive changes in the businesses we invest in.

Stewardship investment process

Sawan Wadhwa explains why ESG risks and opportunities are embedded within the overall investment process. He discusses how using a robust risk management framework and pursuing active engagement can preserve and enhance the value of our clients' assets.

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Industry participation

To identify key long-term risks and discuss megatrends, Evenlode contributes to various industry groups through webinars, training sessions and viewpoints.

Poppy field near Alvescott

As a long standing member of the Investor Forum, Evenlode contributes to collective engagements as well as discussions on board governance, climate and biodiversity-related risks, and effective voting and engagement. These discussions inform our bespoke analysis of emerging ESG and business risks from a market perspective. The industry groups include:

  • UN Principles for Responsible Investment (UNPRI)
  • Investor Forum
  • ClimateAction 100+
  • NatureAction 100+
  • FAIIR Initiative
  • FRC Reporting Lab.

Qualitative research

The purpose of conducting qualitative research and assigning risk scores is to evaluate a company's capacity to sustain high returns on invested capital in the future. To be considered for inclusion in our investable universe, a company must surpass a specific threshold. Among the risks considered are, but not limited to:

  • Moat strength: Competitive advantage against peers and barriers to entry.
  • Long-term industry outlook: Magnitude and growth of the total addressable market, changes in market structure and further potential for disruption and/or regulation.
  • ESG: Risk and impact of potential disruption from environmental, social, and governance-related factors, not an ethical judgment on the company’s activities.

Ongoing risk management

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    AGM voting

    The ability to vote at a company meeting is a fundamental right available to investors holding companies to account and protecting their long-term interests. This is why we actively vote on all our holdings.

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    Engagement

    Engagement is a core component of our stewardship approach. We engage with all investee companies to gather information on the firm’s approach to a range of ESG matters, which inform our view on the risks and opportunities that the company faces.

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    Ongoing management

    We assess companies on a range of financial and non-financial factors: business (including ESG), financial and investment. Companies that score badly on certain issues are less likely to be included in our investment universe. Where a company does not meet minimum ESG standards, active direct or indirect engagement follows.