The position of ESG in the investment strategy of Andreas Capital S.A. (EU Regulation 2019/2088 "SFDR"):
At Andreas Capital we offer discretionary asset management mandates to our clients. In these mandates we select individual equities of companies listed and traded on stock exchanges in Europe and the United States. In our selection process we use ESG-risk factors among other variables to determine the quality and attractiveness of a listed company. Andreas Capital however does not promote to actively influence or impact improving environmental, social and governance (article 8 SFDR) when it selects listed companies for the client portfolios. Nor is the investment strategy of Andreas Capital specifically aimed at ‘green’ or ‘socially responsible investments’ (article 9 SFDR).
Incorporating ESG-risks in our selection process:
During our selection process for individual equities we use ESG-risk factors to assess and weigh the three domains Environmental (E), Social (S) and Governance (G). All three domains are scored by Bloomberg (independent financial data publisher) between 0 and 100 per company per industry sector. A score close to zero means high relative risk, a score close to 100 means low relative risk. The scores are updated annually. A score above the 50th percentile indicates that the company scores above average on that particular domain within its industry. As we wish to select only companies that are above average within their industry the aggregate score on all three domains needs to be higher than 150. Because we wish to eliminate those companies that score high on two domains but very poor on one domain, the minimum score for a single domain is 25.
We monitor the ESG-scores on a semi-annual basis. At the time of selection the ESG-criteria are met, but during the holding period in the client portfolios the score might deteriorate. If a company’s score falls below the above-mentioned minimums (<150 for aggregate score and/or <25 on one domain’s score) we will monitor the development of the score(s) to enable the company to improve its score. This monitoring period shall not exclude twelve months. Within these twelve months the position needs to be removed from the selection unless the scores improve back above the minimum.