Strong Environment, Social and Governance mindset

The Aubrey Environment, Social and Governance Policy (ESG) has been in place since the launch of the firm in 2006. We took the decision at the outset that we wanted to discuss each company policy toward ESG and SRI directly with them, rather than rely on external parties that provide a scoring methodology and who effectively carry out that research element of the process.

The companies we invest in are analysed through our own bespoke in-house ESG framework, where we use our internal know-how to create ESG scores for the companies in our portfolios. We assess Environment, Social and Governance categories and calculate an aggregate score.

Aubrey's ESG engagement involves three steps:


Aubrey uses a bespoke in-house built ESG framework where companies are assessed on their performance, specifically their vulnerability to material risks;


Aubrey engages with managements on how to mitigate these risks and encourages the companies to improve their ESG reporting;


Aubrey compares each company’s performance against other portfolio peers and highlight areas of ESG that are less than optimal.

UN Global Compact

Aubrey bases its measures for ESG analysis on the United Nations Global Compact. This framework provides us with a foundation for assessing corporate sustainability where we focus our analysis on four themes:

  1. Human Rights Companies should respect the internationally declared human rights laws
  2. Labour Elimination of discrimination in the workplace as well as all forms of forced labour
  3. Environment Encourage companies to develop and create initiatives that promote sustainability
  4. Anti-Corruption Businesses should eliminate corruption in all forms including bribery

The multi-year strategy of the UN Global Compact is to drive business awareness and action support of achieving the 17 Sustainable Development Goals by 2030.

Sustainable Development Goals

Sustainable Finance Disclosure Regulation (SFDR)

SFDR is a European regulation introduced to improve transparency in the market for sustainable investment products. It imposes comprehensive sustainability disclosure requirements covering a broad range of ESG issues. It requires asset managers to classify their funds as either an article 6, 8 or 9, depending on their level of sustainability.

Aubrey funds domiciled in the EU (Aubrey Global Emerging Markets Opportunities Fund and Aubrey European Conviction Fund) have been registered as Article 8. An Article 8 Fund under SFDR is defined as “a Fund which promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices.”

Governance & Social Engagements Case Study


Image source: (NetCompany )

NetCompany is a Danish based IT consulting firm focussed on digital transformation in the Public Sector for 61% of its business and in the Private sector for 39%.  It has been subjected to periods of short selling over the years and in 2021 a report came out suggesting the company might be employing aggressive accounting tactics.  We subsequently engaged with the company to understand better the issues outlined.  It was correct that there had been an increase in Work in Progress (WIP), with revenue recognised on long term contracts which had not yet been invoiced.  Management admitted that when you see this it can sometimes point to aggressive accounting.  However, management explained that the reason for the WIP increase was the fact that they are doing an increasing amount of long term contract work in the private sector sharing similar characteristics to public sector work e.g. complex multi-year big scale projects. Management pointed to the fact that that the Accounts Receivable are reducing as the WIP increases, showing that their debtors are paying. There was a spike in Accounts Receivable in Q2, but this was expected given it was the holiday season. As with previous short report attacks on Net Company, the method of accounting has not changed other than to reflect the increased workflow from the private sector.

In addition, we engaged with management in July 2021 requesting disclosure of employee turnover in the annual report. We are pleased to see this featured in the FY21 annual report, broken down by country and with a comparison to the previous year.

May 2022

Environmental & Social Case Study


Image source: (Sika)

Sika offers its largest ESG contribution by developing innovative technologies which promote sustainable activity in the construction and transportation sector. It is a world leader in additives for strengthening concrete, sealing, bonding and damping products and flat roofing. Their products contribute to safer and more energy efficient buildings and infrastructure such as bridges and tunnels, and lower emissions and light-weighting in vehicles. The group is directly aligned to 12 UN Sustainable Development goals (SDGs). Sustainability targets are closely monitored and integrated in senior management incentive programmes. Sika scores highly on Aubrey’s internal ESG rankings and under Europe’s Sustainable Finance Disclosure Regulation (SFDR) qualifies for Article 9 funds. The company has reduced its CO2 equivalent emissions (Scopes 1 and 2) per ton sold by 39% in 2022 compared to 2019 and targets a further 12% reduction in 2023. The company also demonstrates its social commitment to the communities it works in, with 2,595 working days dedicated to volunteering, an increase of 86.5% compared to the prior year. 406 projects were carried out in 2022, up 67.8%. 53,666 people were direct beneficiaries of the Community Engagement Program +590.1% compared to 2019.

Environmental & Social Case Study

Bank Rakyat

Image source: (BRI)

Bank Rakyat Indonesia is the country’s largest bank by assets and recognised as one of the world’s leading microfinance institutions. The bank operates over 10,000 branches and has over 30mn customers and over 130mn depositors. In the age of financial technology adoption, the bank employs over 500,000 agents assisting communities across the Indonesian archipelago.

The Indonesian Government has been an enthusiastic advocate of financial services adoption across the 270mn population. As the majority shareholder with a 53% stake, they have been a supporter of the banks’ lending ambition that extends into the poorer, rural areas of the country and addresses the needs of small business and consumers.

Bank Rakyat has aligned their ESG initiatives with the UN Sustainable Development Goals framework and highlight practices aimed at all 17 goals.  The 250 page Sustainability Report is an easier read than the 1090 page Annual Report!

The bank has provided an impressive assessment of the operational emission data across the network and detailed the initiatives aimed at further reduction in CO2 emissions.

Recycling initiatives have been extended from practices in the branch network to include the wider environment. The bank highlighted several programs dedicated to local environmental challenges. Examples included Jaga Sungai Jaga Kehidupan ‘protect the river, protect the life’ which was implemented in 19 rivers throughout the country. This program was intended not only to organize and improve rivers to be sustainable, but also to provide solutions to overcome waste problems from within local communities and stimulate the surrounding economy.

Social engagement programmes centres on the BRI Peduli programme. The initiatives have embraced projects that address education needs in the community; repsonse teams in rural communities to provide a response to natural disasters; and support for women’s small business groups with the provision of training and bussiness equipment.


Environmental & Social Case Study


Image source: (Yadea)

Yadea was founded in China in 2001 and is the largest electric powered two-wheeler (“ePTW”) company in the world. The company operates 7 domestic production sites and 1 in Vietnam targeting Southeast Asia. The company sold 14m two-wheeler vehicles in 2022.

Driven by product portfolio expansion, product upgrade and the increased distribution network, Yadea has been able to grow consistently and developed a range of premium to mid-lower end products adopting batteries such as graphene and lithium-ion, as they are moving from lead-acid.

Yadea has been actively improving its ESG reporting standard and communication with investors.

  • Energy efficiency, emission and waste management are a key focus for Yadea. The company has been able to reduce greenhouse gas emissions per unit vehicle by 33% in the last reporting cycle. The management also noted Yadea’s graphene batteries are produced predominately with recycled lead and have a lengthened battery life by 1-2 times compared to traditional lead-acid batteries.
  • Internal and external health and safety remain as top priorities for the company. Each employee received 17 hours of training and the company participated in the nationwide campaigns for “Yadea 717 Cycling Festival” and “One Helmet, One Seatbelt” to raise awareness of driving safety.



Social Case Study

Titan Industries

Image source: (Titan Industries - Four beneficiaries of the Titan Scholarship Scheme)

Founded in 1984, Titan Industries is a manufacturer and retailer of jewellery, watches and eyewear in India, and one of the TATA Group of companies. Benefiting from fast economic growth, increasing disposable personal income and high product quality, Titan has built its reputation and grown as an industry leader. The company manages 15 brands and over 1,700 stores across more than 275 cities and towns in India.

In addition to excellent business growth, Titan has also shown strong dedication to social sustainability. Specifically, the company’s Affirmative Action program has been supporting initiatives which empower underprivileged and neglected communities through providing education and employment resources such as scholarship funding, technical training and career counselling.

A few examples of Titan’s social initiatives:

  • The Titan Scholarship Scheme to date has funded over 1,500 students
  • The Tribal Centre for Learning, a residential school which is supported by Titan, was set up with the aim of providing quality education to tribal children, especially girls. In 2021, the school enrolled 412 children, 49% of which were girls
  • The Titan Kanya initiative aims to empower girls through remedial education and holistic engagement. More than 300,000 children have been supported through the program. 92% of the girls passed class 10 in 2020
  • The company has provided employment and employability training programs to over 5,000 youth
  • Our in-house ESG analysis scores Titan Industries highly on environmental, social and governance factors.

Principles of Responsible Investing

In March 2021 Aubrey became a signatory of the United Nations-supported Principles for Responsible Investment to supplement our existing ESG investing activities and to publicly demonstrate our commitment to responsible investment.

The six Principles for Responsible Investment are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice.

Principle 1

We will incorporate ESG issues into investment analysis and decision-making processes.

Principle 2

We will be active owners and incorporate ESG issues into our ownership policies and practices.

Principle 3

We will seek appropriate disclosure on ESG issues by the entities in which we invest.

Principle 4

We will promote acceptance and implementation of the Principles within the investment industry.

Principle 5

We will work together to enhance our effectiveness in implementing the Principles.

Principle 6

We will each report on our activities and progress towards implementing the Principles.

Future Asset

Aubrey is a supporter of Future Asset, a programme that informs girls in Scotland about careers in investment management, enthuses them about opportunities in the sector, and widens the talent pipeline whilst improving diversity in the industry. They advocate that being female should never be a barrier to pursuing any career whilst helping them to develop skills, confidence and purpose.

Aubrey Sustainability Policies and Documents