• Kotak International
  • UCITS
  • Kotak Mahindra (UK) Limited
  • Kotak Mahindra Asset Management (Singapore) Pte Ltd.
  • Kotak Mahindra (International) Ltd.
  • Kotak Mahindra Inc.
Our Commitmentarrow down darkarrow down whiteprocess & philosophyarrow down darkarrow down whiteour approacharrow down darkarrow down whiteoversightarrow down darkarrow down whiteteam & policiesarrow down darkarrow down white
OUR COMMITMENT
Commitment

Kotak Mahindra Asset Management takes into account the principles of Environmental, Social and Governance (ESG) factors under Responsible Investing (RI). Principles of ESG are an integral part of the investment process at KMAMS and are embedded in the investment philosophy we follow. We take into account the principles of ESG as it is one of the key influencer for long term sustainable shareholder returns. As active managers with focus on long term investing, other than just financial outlook, we combine multiple factors to take a view on an investee company. Kotak Mahindra Asset Management is a signatory to United Nations supported Principles for Responsible Investment (PRI) and is the first Indian asset management company to do so for its entire asset management business. Kotak Mahindra Asset Management is also a signatory to Climate Action 100+. As a signatory to Climate Action 100+ demonstrates our focus towards securing commitments from the corporate sector. The underlying sustainability agenda is that the Indian corporate sector, individually and collectively, take action to reduce greenhouse gas emissions consistent with the Paris Agreement’s goals.

Kotak Mahindra Asset Management (Singapore) Pte Ltd is also a signatory of the Singapore Stewardship Principles for Responsible Investors.

"Fundamental analysis is the bedrock of our investment decisions."
INVESTMENT PROCESS AND PHILOSOPHY

Fundamental analysis is the bedrock of our investment decisions. Our investment philosophy of Business, Management and Valuation (BMV) focuses on sustainability of business and corporate governance. We also believe that ESG issues can influence investment risk and return. Therefore, we incorporate ESG considerations within our fundamental analysis and seek to gain an understanding of the relevant ESG issues applicable to our investments.

Articulation of the firm wide strategy and vision

Articulation of the firm wide strategy and vision

Instituting governance and oversight framework

Instituting governance and oversight framework

Integration of ESG factors into portfolio management and scenario analysis

Integration of ESG factors into portfolio management and scenario analysis

Investment stewardship and engagement with investee companies

Investment stewardship and engagement with investee companies

Reporting and disclosures

Reporting and disclosures

Putting in place the talent and infrastructure needed for ESG integration

Putting in place the talent and infrastructure needed for ESG integration

OUR APPROACH TO ESG: THE 3 E STRATEGY

Our approach to ESG is that of positive / best-in-class screening with a primary focus on engagement and evaluation. We also have ESG-related exclusions which are mandate/fund specific. ESG research and integration is an outcome of collaboration between portfolio managers and research analysts. We use the BMV model in our approach to investment process. Within this model, we seek to incorporate various ESG parameters, including the ESG scores provided by the third-party service providers (where required), in order to finally arrive at our investment decisions.

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BUSINESS

  • Size
  • Competition
  • Scalability
  • Sustainability

MANAGEMENT

  • Vision/Growth Orientation
  • Execution Track Record
  • Corporate Governance
  • Capital Allocation

VALUATION

  • GARP (Growth at Reasonable Price)
  • RoE / ROCE / Free Cash Flow

THE 3E STRATEGY: ESG INTEGRATION INTO THE INVESTMENT PROCESS

evaluation

  • Business, Management & Valuation
  • Governance, Environmental Impact & Social Factors
  • Using 3rd party Research to evaluate companies on ESG

engagement

  • Focused Questionnaire to potential and existing investee companies on various E, S & G parameters
  • Meeting investee company management periodically and discuss ESG issues
  • Proxy Voting as a tool to engage with investee company

exclusion

  • Sectoral Exclusions like Tobacco, Gambling, controversial weapons as per fund and mandate specifics
Some of the key ESG factors which we consider in our investment decision are as follows:

Environment

We are aware that climate change and transition to a low carbon economy would present risks and opportunities for investments. The impact of such transition would vary across sectors and industries and would occur over a period of time. Some of the key things we monitor include:

  • Carbon emission and its environmental impact
  • Energy consumption and focus on resource efficiency - Usage of alternate energy sources
  • Extreme weather events and its impact
  • Environmental pollution and its impact

Social Factors

  • Safety of employees
  • Employee retention policies / attrition levels
  • Participation of women in the work force / diversity
  • Presence of unionized staff
  • CSR (Corporate Social Responsibility) spends

Governance

  • Capital allocation policies
  • Shareholder structure
  • Board composition: Size and structure / tenure etc.
  • Executive remuneration
  • Integrity and ethical behaviour
  • Regulatory compliance
MONITORING & OVERSIGHT
monitormonitor 1

We evaluate companies on ESG parameters not only on a current basis but also monitor the changes that these companies incorporate over time. Changing regulatory requirements will also guide our investment process, engagement and monitoring of our investee companies

  • As active managers, we continuously monitor the companies in which we invest and their ESG related information & scores.
  • The ESG Committee approves ESG related policies and these are periodically reviewed.
ESG RESEARCH TEAM
research team

The Equity Research team consists of analysts who are a combination of sector specialists and mid-market/ small-cap focussed analysts supported by dedicated ESG analysts. ESG is an integral part of the overall research methodology of the research analysts.

research team

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