ESG+C®
SUMMARY
MCP's investment philosophy utilises an active ownership approach with an emphasis on improving ESG-standards. We do not constrain ourselves to conventional definitions of 'ESG' but also place a heavy emphasis on rigorously assessing corporate culture (ESG+C®) as academic research suggests that companies with strong cultures outperform their peers over the long term (see MCP’s 2022 Culture Report).
Unlike many investors who seek companies already excelling in ESG, MCP targets those with the potential to become sustainability leaders within their sectors. This ESG+C® framework is built on two key pillars:
1.
Integration of Material ESG+C® Factors at Research Stage: As part of our comprehensive research process, we focus on understanding each company’s existing ESG+C® practices to provide targeted guidance for improvement. By assessing key areas—such as sales practices, energy efficiency, environmental impact, diversity, decision-making, and innovation—we create a materiality-based roadmap to help enhance their ESG performance.
2.
Active Ownership and Engagement: Following investment, MCP works closely with each portfolio company to elevate their ESG+C® standards, supporting them in their journey toward sustainability leadership and adaptation to evolving ESG expectations. Our engagement is highly tailored, involving consistent, meaningful interactions throughout the holding period, including face-to-face meetings, video calls, and ongoing correspondence.
The Mobius Emerging Markets Fund is classified as an Article 8 fund under the SFDR.
''We are not looking for today's ESG champions but are actively engaging with tomorrow's sustainability, governance and operational leaders.''
Carlos von Hardenberg
Founder & Portfolio Manager
ESG+C® Factsheet - Q3 2024
Engagement*
| Portfolio | ||
| Environmental | 10% | |
| Social | 23% | |
| Governance | 50% | |
| Culture | 13% | |
| Operations and Capital Allocation | 4% |
Portfolio Highlights
In Q3 2024, we continued to actively engage with our portfolio companies through the use of video conferencing and in-person meetings. The Portfolio Highlights section below displays some of the progress observed during the quarter.
Environmental*
| Environmental Reporting³ | 85% | |
| Quantitative Environmental Targets³ | 50% |
Carbon Disclosure Project Portfolio Company Scores⁴ *
| Portfolio | ||
| F | 28% | |
| Not Reporting | 44% | |
| B | 16% | |
| C | 6% | |
| A | 3% | |
| D | 0% | |
| C- | 3% |
Portfolio Highlights
-
Vinamilk announced that its Vietnam Beverage Factory has attained international certification for carbon neutrality from the British Standards Institute (BSI).
-
Sinbon reached 11% reduction in Scope 1 and 2 carbon emissions and 6% of total energy usage (2,044,800 kWh) came from self-generated renewable energy.
Social*
| Employee Training Initiatives³ | 100% | |
| Reporting on the SDG³ | 72% |
Top 3 most reported Sustainable Development Goals (SDG)⁶ *
 8.Decent Work & Economic Growth 17 out of 24 |
 3. Good Health And Well-Being 18 out of 24 |
 4. Quality Education 16 out of 24 |
Portfolio Highlights
-
Kangji achieved an AA score for the first time in MSCI ESG Rating – the highest rating among medical device peers listed in HK.
-
E Ink won Manufacturer of the Year at the 9th Annual Massachusetts Manufacturing Awards Ceremony.
Governance*
| Founder/Family Owned Companies⁷ | 58% | |
| Blockinvestor⁸ | 55% | |
| % of Females on the Board⁴ | 21% | |
| % of Board Independence⁴ | 47% | |
| Audited by Big Auditor³ | 81% | |
| Dedicated Investor Relations Professional⁹ | 84% | |
| Report on Sustainability³ | 77% | |
| Global Reporting Initiative Compliant Reporting³ | 48% |
Portfolio Highlights
-
Persistent Systems has been recognised for its robust governance practices and strong executive leadership by the highly regarded portfolio managers and analysts in the prestigious “2024 Asia (ex-Japan) Executive Team” survey.
Culture*
| Share Option Scheme³ | 77% | |
| Non-financial Employee Benefits³ | 84% | |
| % of Females C-Level Executives⁴ | 22% | |
| Dedicated Sustainability¹⁰ | 42% | |
| Ethics Code/Code of Conduct³ | 94% | |
| Anti-Corruption Policy³ | 77% | |
| Whistleblower Policy³ | 58% |
Portfolio Highlights
-
Sinbon was included in Bloomberg’s ''Gender Equality Index'' among only 16 companies from Taiwan.
-
FPT Software won the Job Creation Award—Vietnam at the ESG Business Awards 2024, highlighting its commitment to developing global IT talent and fostering inclusive workplaces.
*allocation may vary over time.
Source: MCP Emerging Markets and portfolio companies
DOCUMENTS
REPORTS
No document
INFORMATION ON FINANCIAL PRODUCTS
No document
CULTURE REPORTS
No document
FOOTNOTES
1.
The engagement breakdown is for Q2 2024 and is based on 186 engagements in the fields of environment, social, governance, culture and operations and capital allocation issues.
2.
As part of the ESG+C® assessment, four different dimensions area assessed: environmental: entails factors like climate change, natural resources, pollution & waste as well as environmental opportunities; social: refers to factors such as human capital, product liability and social opportunities; governance: refers to the reporting methods, the ownership structure as well as checks and balances; culture: contains factors like the degree of freedom, equality, recruitment, innovation and remuneration.
3.
Portfolio companies are assessed on a binary basis whether they do or do not comply with the assessed metric. The number of companies complying with the metric is expressed as a percentage of the portfolio.
4.
External CDP Score: The Carbon Disclosure Project increases environmental transparency and accountability of companies and enables progress tracking. The scoring ranges from A, A- to B, B-to C, C- to D, D-and F.
5.
Sustainable Development Goals: Out of the 12 portfolio companies reporting on the united nations sustainable development goals, the top 3 goals are selected.
6.
The determined company percentages are weighted according to their weight in the portfolio. The weighted average is reported as a percentage of the portfolio.
7.
Founder-/Family-owned Companies: Reports the percentage of portfolio companies with the family or founder holding 5% or more.
8.
Block investor: Refers to an individual or organization owning a substantial amount of the company's shares. The hurdle rate is set at 15%.
9.
Dedicated Investor Relations Professional: Reports companies as a percentage of the portfolio having appointed an employee responsible for investor relations.
10.
External Glassdoor Score: Glassdoor is one of the world's largest job and recruiting sites providing scores for companies ranging from 0 to 5. The Portfolio score is the average of 22 available scores among the portfolio.
11.
Dedicated Sustainability Professional: Reports companies as a percentage of the portfolio having a dedicated employee in charge of the company's sustainability activities.
We rely on the data provided by portfolio companies which is not necessarily reliable and gathered/verified on a best-efforts basis. Information from companies is only considered if it is publicly available and traceable to the source. Accordingly, we avoid private questionnaires or surveys as such a process is difficult to replicate on a quarterly basis. Based on this principle, annual reports are one of the central data sources. Quantifying qualitative data helps to evaluate the overall portfolio and provides comparable data.
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