Environment, Social and Governance Policies
A pragmatic approach to ESG
Zadig’s rational and cautious approach to investment pays tribute to its namesake from the protagonist of the novel with the same name written by the French Enlightenment philosopher Voltaire.
Voltaire took great pride in judging people by the questions they ask rather than by their answers. As curious stock pickers, a major part of our job is asking questions, testing hypotheses and challenging the status quo. “What is the company’s fundamental reason for being?” is the first and most important question we ask and the starting point of our due diligence process when assessing a potential investment.
Through its day to day activities, a company must demonstrate that it creates value for all of its stakeholders and not just its shareholders for us to consider an investment.
Judge a man by his questions rather than his answers
Corporate governance is a key focus of our investing process.
Understanding voting rights, the poles of decision making power, structure of the board and the safeguards to protect minority shareholders have been points on our due diligence checklist years before becoming popular in the ESG framework.
On top of this Zadig has started to integrate Environmental and Social factors in its research process, which we would describe as including risks and opportunities linked to environmental and social matters in our valuations and our investment cases.
We are advocates of reasonable transparency, and when we feel companies could do more, we encourage them to improve their disclosure on ESG and Sustainability issues.
Our research and investment team frequently meets with management of companies in the portfolio or potential candidates for the portfolios. We exercise our voting right in the best interest of funds’ shareholders and clients.
Engagement & Voting
While we acknowledge that Zadig is not as large as other players in the industry, history shows us that the concentration of our portfolios is a strength for active engagement with the management of companies, in particular those in the portfolio.
Indeed, while management of companies appreciate large investors matter due to their size, they also value the trust we placed in them by investing a large part of our clients’ assets in their company, an act of support that generally triggers a positive and constructive discussion including regarding the most sensitive financial and extra-financial matters.
Before every AGM of companies in our portfolio, our research and investment team analyses resolutions one by one and exercises our voting rights in the best interest of the funds’ shareholders and clients.
Read our firm wide policies that describe our corporate governance approach and our tried and tested approach to ESG, Sustainability, Engagement and Voting.