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Social
Responsibility Policies
E.I.M. Capital Managers believes that natural resources
companies which fail to comply with, practise or take account of
labour standards, environmental, ethical
or social considerations face additional risks which may
detrimentally affect business sustainability and investment returns
to shareholders. E.I.M. therefore takes account of labour standards,
environmental, ethical and social considerations in the selection,
retention and realisation of investments in natural resources
companies.
In taking account of labour standards, environmental,
social and ethical considerations, the E.I.M. Investment Committee
draws upon the experience of its members and the experience of the
members of the E.I.M. Advisory Committee as well as broader industry
knowledge to determine the standards it will apply to the selection,
retention and realisation of investments.
E.I.M. believes that environmental issues are always important, and
sometimes of critical importance, to the sustainability of the
business of a natural resources company. Failure to comply with
applicable environmental standards will override any other
consideration in the Investment Manager’s assessment of an
investment.
Methodology and standards
Except for the negative screens outlined below, E.I.M. does not adopt
or apply one specific methodology for taking labour standards,
environmental, social or ethical considerations into account and
does not use a specific weighting system to assess these
considerations.
(i) Environmental considerations
E.I.M. expects all companies in which it is investing to comply with
relevant federal, state and local government laws relating to the
environment. They should provide regular disclosure of their
environmental impacts including the impact of solid and hazardous
waste disposal and airborne emissions on air and water quality as
well as rehabilitation of land during and after use. Any adverse
environmental events should be reported promptly to the market.
Where companies operate in jurisdictions outside
Australia, E.I.M. expects them to comply with environmental standards
similar to those applying in Australia even where these standards
exceed those applying in the country in which the companies'
operations are located. Failure to meet these standards will result
in exclusion from E.I.M.'s focus list of stocks.
Where companies have received the required
authorisations to lawfully conduct their businesses, E.I.M. may decide,
nonetheless, that associated environmental risks are too great from
an investment perspective if technology or environmental management
techniques to be used are unproven or managers are relatively
inexperienced in their use and may conclude that investment in such
companies is inappropriate resulting in exclusion of those companies
from E.I.M.'s focus list.
(ii) Labour standards, social and ethical
considerations
E.I.M. expects the treatment of local communities by natural resources
companies to comply with all relevant Australian laws and
undertakings made as part of development approvals when companies
are operating within Australia. Although standards of acceptable
practice vary considerably from country to country, E.I.M. does not
explicitly take account of the range of labour, social and ethical
standards applying in countries outside Australia. However, the
Investment Manager does require that companies have entered into
agreements with all stakeholders having a reasonable claim on land
affected by mining developments and that these stakeholders have
entered these agreements without coercion or duress.
If E.I.M. is not satisfied with the level of disclosure
by a company about its treatment of local communities, if any
breaches of relevant Australian laws are brought to its attention or
it considers that there are risks attaching to development
over and above normal operating risks as a result of uncertainty
over these matters, it will exclude the relevant company from its
focus list.
Retention and realisation policies
In the normal course of its investment management activities, E.I.M.
monitors all events relevant to companies in portfolios it manages
using up-to-date information retrieval technology, direct contact
with companies and advice from intermediaries. These events are
recorded by the Investment Manager for review by members of the E.I.M.
Investment Committee. Such events will include matters relating to
labour standards and environmental, ethical
and social considerations.
Any event with a potential material impact on
operating performance or business value will be highlighted for
consideration at the next meeting of the E.I.M. Investment Committee
(or earlier if deemed to be of sufficient importance). If necessary,
a member of the E.I.M. Advisory Committee will be asked to assist in
judging the materiality of an event. E.I.M. intends to monitor relevant
events with a view to taking prompt action to sell securities if
circumstances warrant a change in overall view. A decision to sell
will be implemented within 30 days or such other period of time
required to ensure orderly disposal of the relevant/affected
securities.
Other than the processes set out here, E.I.M. has no set
approach to monitoring or reviewing its methodology for taking into
account labour standards, environmental, social or ethical
considerations, and has no set timeframe for monitoring or reviewing
investments. |
