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Our ESG Policy

ESG at Daintree Capital

Our Purpose

This policy aims to enhance the Daintree portfolio construction process by outlining a framework by which current and potential investments can be assessed from an ESG standpoint.

Our ESG Rationale

We believe that business is a pivotal stakeholder in society, and that the pursuit of profitable growth, a strong awareness of social and environmental issues, and best-practice governance standards are not mutually exclusive.

Our Core Principles

Sustained Returns
Sustain Returns

Integrating ESG principles supports portfolio outcomes

Managing Risk
Manage Risks

ESG integration will identify and manage key risks

Invest for Good

Identify opportunities to positively impact the future

Investing for Impact

We are committed to be an active member of the UN PRI initiative, working toward the ideals embodied in the six principles at the core of the UN PRI. We have adopted the UN Global Compact as high-level guideposts for assessment, particularly regarding the environmental and social issues relevant to most businesses.

Positions on Key Issues

ENVIRONMENTAL ISSUES

Climate Change

Human action is contributing to climate change, and therefore we have a collective responsibility to address the challenges it creates. Furthermore, we see climate change as a material investment risk. We believe that businesses should seek to understand, and be transparent, about how their activities may be contributing to climate change. Governments have a role to play by devising and implementing appropriate policy to incentivise action and provide certainty to all stakeholders. We are committed to engaging with companies to advocate for better reporting and practical action on this issue.

Fossil Fuel

We acknowledge that fossil fuels, by their very nature, are highly carbon intensive. However, the International Renewable Energy Agency estimates that less than 40% of electricity will be created from renewable sources by 2050. We support a globally agreed and implemented transition toward a lower emissions future, which includes the reduction of fossil fuel use for electricity generation and transportation. We will exclude companies exploring for or extracting fossil fuels, or those that burn coal for power generation, with a 5% revenue threshold.

Water Management and Security

Water is arguably the most important resource on our planet. Water scarcity is a growing challenge globally, and therefore we recognise water management and security as a relevant issue for most companies. We highlight the pollution of water resources by mining companies and water stress in the agricultural supply chain as key thematic issues, but note that all companies can take steps to contribute to the protection and preservation of this most vital resource.

Uranium

While we acknowledge the potential of nuclear power generation to support a lower carbon future, and the beneficial applications of nuclear medicine, we also note the many safety concerns related to nuclear power, which include the specialised disposal and storage of spent fuel, and the environmental impacts that may arise from a damaged or failed reactor. For this reason, we will exclude companies that earn more than 5% of revenue from the extraction of uranium or nuclear power generation.

VICE ACTIVITIES

Gambling

Consenting adults in most countries are freely entitled to participate in gambling activities. However, when consumed in an unhealthy manner, gambling can cause significant hardship to individuals, families and communities. We will exclude companies that earn more than 5% of their revenue from gambling.

Alcohol

The consumption of alcohol, while legal for adults in almost all countries, has been linked with significant health and social issues. We will exclude companies that earn more than 5% of their revenue from alcohol production.

Adult Industry

While legal for consenting adults, production and distribution of this material has been linked with multiple health, safety and social issues. We will exclude companies that earn more than 5% of their revenue from the production of adult material.

Tobacco

We exclude any company involved in the production of tobacco products as we can find no rational reason to support this industry.

SOCIAL ISSUES

Social Media

There are no clear-cut, industry-recognised standards to define inappropriate content. Regulators and shareholders are beginning to question what this might look like and the impacts it can have on communities. Given that billions of people are now engaged in the social media universe, and that several social media companies are publicly listed and/or issue bonds, we see a role for investors to help define the relevant issues and engage in the debate.

Modern Slavery

We support fair and safe working conditions throughout global supply chains. We will assess a company’s performance, policies and standards in relation to workplace safety, freedom of association, forced labour, child labour, discrimination, harassment and other similar practices – and engage where appropriate to advocate for reform.

More Information

If you would like further information, please email invest@daintreecapital.com.au