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.