Stewardship
Commitment to Responsible Investing
SCGX Capital is dedicated to responsible investment practices, integrating ESG risks and opportunities within our financial analysis framework, engaging constructively with companies, and advancing thought leadership through research and collaborative initiatives. Our sustainable strategies are certified by leading ESG rating bodies and maintain strong sustainability credentials, reflecting our long-term commitment to responsible investing.
ESG Integration
We systematically incorporate environmental, social, and governance factors into investment decisions, recognizing that these considerations are financially material and can influence long-term risk and return profiles. ESG evaluation is integrated throughout the investment lifecycle rather than treated as a standalone overlay. Environmental factors include climate risk, emissions trajectories, resource efficiency, and biodiversity impacts. Social considerations address workforce practices, human capital development, data privacy, and community relations, while governance focuses on board effectiveness, executive compensation, capital allocation, and business ethics. ESG insights directly inform security selection, position sizing, and portfolio construction to enhance long-term outcomes.
Materiality-Based Approach
SCGX Capital concentrates on ESG factors that are financially material to each company and sector. We evaluate how ESG risks and opportunities impact cash flow durability, cost of capital, regulatory exposure, competitive positioning, growth trajectories, and enterprise value. By focusing on material factors, our approach enhances investment outcomes while aligning with our fiduciary duty to optimize long-term, risk-adjusted returns. ESG analysis is integrated into the assessment of business quality, operational resilience, and valuation.
Active Engagement
As active managers, we utilize our influence to promote superior ESG outcomes and mitigate risk. Engagement extends beyond investment selection to constructive dialogues with portfolio companies, supporting climate strategy development, board effectiveness, executive compensation alignment, capital allocation discipline, diversity initiatives, supply chain responsibility, cybersecurity governance, and stakeholder transparency. Engagement outcomes are continuously monitored, documented, and integrated into investment assessments. Proxy voting is exercised independently, reflecting our commitment to long-term shareholder value, strong governance, board accountability, and protection of minority shareholder rights.
Sustainable Strategies and Thematic Analysis
SCGX Capital maintains dedicated sustainability strategies targeting companies positioned to benefit from structural ESG-related shifts, including clean energy transitions, sustainable infrastructure, healthcare innovation, technology for inclusion, sustainable agriculture, and water resource management. Thematic analysis identifies emerging ESG trends, such as climate transition pathways, biodiversity loss, social inequality, technological disruption, regulatory evolution, and demographic shifts. This research informs investment opportunities, portfolio positioning, and risk management, aligning financial objectives with sustainability outcomes.
Risk Management and Downside Protection
Responsible investing is central to our risk management framework. ESG-related risks, including regulatory changes, labor disruptions, governance failures, or climate exposure, can result in permanent capital loss if inadequately addressed. By proactively identifying ESG vulnerabilities, we aim to avoid unmanaged risks, enhance portfolio resilience, and improve risk-adjusted returns. Exclusions or heightened scrutiny are applied where necessary to address severe governance violations, environmental controversies, social issues, or products with negative externalities, ensuring alignment with client objectives and evolving standards.
Transparency
SCGX Capital maintains transparency in all responsible investing practices, including disclosure of engagement activities, portfolio ESG characteristics, proxy voting records, and sustainable strategy impact metrics. Our approach aligns with international frameworks and standards, ensuring accountability and independent verification. Beyond our portfolios, we actively participate in industry initiatives, contribute to ESG standards development, collaborate with other investors on systemic issues, and publish research to advance responsible investing practices.