Our expectations of the companies we invest in are no different to the expectations we place on ourselves

We believe that ESG considerations when investing mean taking into account material financial and ESG factors in the investment analysis and decision making process. These material factors range from the activities the company is involved in, the background context in which it carries out those activities, through to how it treats its workers, customers and owners.

For Platinum, ESG is about understanding a company

At Platinum, we emphasise a balanced approach; we look at what detracts and what contributes to a company’s worth. Where material ESG issues are identified, our approach is generally one of thoughtful engagement, where we seek to nudge these companies to move towards better ESG outcomes.

There is an explicit and systematic inclusion of ESG factors in our investment analysis and decision making process.

Our operational ESG framework has two components, each are linked:

  • TheGRID (Global Responsible Investing Determination); and
  • our proprietary sustainability reports.

TheGRID is a proprietary tool which is used by us to analyse our investee companies from a multi-dimensional perspective to determine their ESG profile . The ESG profile of a company determines the level of bespoke ESG research we then conduct. In creating TheGRID we have analysed and scored what we believe to be the material ESG considerations of every GICS-code sub-sector as well as attributing our own risk-score (having regard to a combination of political, societal and rule-of-law factors) on a regional and, in some cases, country basis. Our “controversy” driver is the outworking of a (weighted) blend of these markers.

Sustainability reports come in two forms: a summary one-pager is completed for every stock in a portfolio; and a more in-depth analysis is performed for those (potential) investments which present material ESG considerations, which, conceivably, could impact our thesis. Every report has to balance any material ESG concerns against positive ESG contributions and planned improvements, outline “Platinum actions” (including our company engagement strategy) and have a specific section analysing any modern slavery risks.

We believe negative screens that rule out certain types of investments will, over the long term, actually set ESG-efforts back: investors have the lever to change the world, through investing and engaging, not through withdrawing capital

Simply put, as investors we need to think deeply about the long-term future environment and prospects of an organisation, and therefore we can ill afford to ignore material ESG issues. Because of our focus on the intrinsic value of companies, sustainability has long been an inherent – though not always explicit – part of Platinum's investment process.

Platinum invests with a long-term outlook (typically five years or more) and, as effective part-owners of the enterprises in which we invest, it is paramount to us that they maintain their social licence to operate. As such, we view social and environmental sustainability, as well as sound corporate governance, as vital to a company’s long-term viability, growth and profitability – unsustainable business models don’t make for great investments.

To assess a company’s true worth – the core of Platinum’s mission – a nuanced consideration of the company’s operations and operating environment is essential. The evaluation of material ESG issues and risks, just like traditional financial and operational factors, is an integral part of this exercise.

For us, ESG is about taking a balanced approach and engagement.

We think engagement is the key; we believe that an ongoing, patient and thoughtful dialogue with the companies we invest in about their societal responsibilities will, over time, achieve more than just removing investible dollars from their capital need/acquisition requirements. As investors, we are part-owners of the organisations in which we invest. As such, we potentially have the ability to influence the way a company operates, aid in setting strategy and help to ensure that organisations make good on the promises they make – we view an investment in an organisation as an opportunity to share in earnings generated as well as being able to have insight and impact on how those earnings are generated.

Exclusions refer to “red lining” specific industry sectors, countries or companies from our investible universe on the basis of ethical values or norms or to align with the United Nation’s approved political decisions. Platinum currently excludes:

a) entities engaged predominantly in manufacturing or distributing tobacco products.

b) entities engaged predominantly in manufacturing or supplying munitions or military weapons.

c) entities subject to restrictive measures under relevant sanction programmes.

Responsible Investing Policy

Proxy voting: Being counted matters

Platinum recognises that voting our shares is an integral part of our responsibility as an investment manager.

Voting matters and is a clear signal backing up our engagement with companies’ management.

Voting decisions are made on a case-by-case basis. Given that taking long positions in a company generally reflects our alignment with, and confidence in, its management, we will generally support management, but not always.

Platinum does not participate in protest voting, only voting with the intention of having the motion carried. As such, unless we intend for a particular motion to be defeated, we will generally vote in favour of the motion.

Exercising our votes is important for the interests of our investors and part of our ability to help engage, enable and impact a company’s future.

Proxy Voting Results

The following charts provide a summary of Platinum’s proxy voting activity for the period from 1 July 2020 to 30 June 2021.

The type of categories most voted on include Board related matters, Audit/Financials, Changes to Company Statutes, Compensation, M&A, Meeting Administration and Capital Management.

To reference the charts:

‘Take No Action’ refers to a deliberate decision by Platinum not to vote.

‘Unvoted’ refers to no vote (or Platinum has decided to abstain but didn’t record it as Take No Action).

‘N/A’ refers to some proposals being listed but Platinum are not allowed to vote on them.

This information is sourced from the Glass Lewis Viewpoint system which is the voting platform that Platinum uses to vote proxies.

Proxy advisers make different recommendations on how to vote but ultimately where Platinum has the power to vote, all votes are determined by Platinum and not by a proxy adviser.

Management Proposals – Votes versus Management

Shareholder Proposals – Votes versus Management

Management Proposals – Votes versus External Proxy Advisor

Shareholder Proposals – Votes versus External Proxy Advisor