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 Case Study

Grenergy Renovables

Grenergy Renovables, the Spanish company that produces energy from renewable sources, invested in 2020 more than €869,000 in social and environmental impact measures in the communities where it operates, according to its sustainability report. In addition, in a year particularly marked by the coronavirus pandemic, it used its international logistics infrastructure to import and distribute covid protection equipment in Spain and in the Latin American countries where it operates, such as Chile, Argentina and Colombia; donated health material in excess of €250,000, including over 400,000 masks and other equipment.

Large companies tend now to have whole departments devoted to ESG, or at least promoting the right image, but when smaller companies with less deep pockets, demonstrate such a commitment to it, it is really impressive. At Aubrey we seek out these types of companies and have shared Grenergy (market cap €800m) as an example with other smaller companies wishing to improve their ESG, to show them what can be achieved.

Grenergy seeks opportunities to create social impact in the local communities near its projects. For example, in Peru it will allocate 1% of its annual income to the development of the local community, while in Argentina it has launched a university scholarship to support young people from the local community to study renewable energy. Located in Quillagua, in the Atacama Desert, one of the driest inhabited areas of the world, the company has built one of its largest solar parks and has undertaken to install a 350 KW photovoltaic plant to supply electricity to 100% of the local population, which currently has limited supply from a diesel generator, as well as creating jobs and supporting other initiatives around local tourism, and protecting the cultural heritage.

Although Aubrey has its own scoring methodology on which Grenergy scores highly, Sustainalytics ranks the company in the top five utilities globally for ESG. Specifically, it analyses different critical areas such as business ethics, human capital, relations with the communities, health and safety at work, land use and biodiversity. It placed Grenergy as one of the top three companies out of 68 in the renewable sector and among the top five of 595 companies in the overall utilities sector. Grenergy’s sustainability report is extensive, and demonstrates a clear commitment to transparency in its communication with stakeholders, including investors. The company analyses milestones achieved and internal goals, including a reduction in own emissions by 55% by 2030 and net zero emissions by 2050, and estimates that the projects built and retained in 2020 alone will avoid 250,000 tonnes of CO2 a year. The calculations of emissions meet the criteria of the GHG Protocol standard and have obtained independent verification from a UK firm. The company offers granularity on Scope 1, 2, and 3 emissions, as well as levels of water consumption and waste generation.

Social Case Study

S4 Capital

Image source: (Firewood Marketing)

S4 Capital is a UK company that helps optimise the digital marketing strategies of brands. Digital is by far the fastest-growing segment of the advertising market, and management estimates that in 2020 digital accounted for over 50% ($290bn) of the total global advertising spend of $525bn. In addition, management expects that by 2022 this share will grow to approximately 60% and by 2024 to approximately 66%, accelerated by the impact of covid-19.
As a result of the heightened momentum, management remains confident of delivering sector leading, double digit like-for-like revenue and gross profit growth for 2021. Management also believes it can achieve the pre covid-19 three-year plan for 2021-2023, which calls for a doubling of the company organically, at both top line and EBITDA level.

While these financial targets are attractive to the Aubrey European team, we also commend the company’s contribution to ethnic diversity. For example, the company released a report which answers the ‘Six Hundred & Rising’s Call for Change’ to make diversity data public.

In addition, in FY21 Q1 the group hired their first ‘fellows’ from the S4 Fellowship programme, who are starting the four-year internship currently. The group are recruiting from historically black universities and high schools in the United States. The Fellowship programme aims to grow the group’s employees of colour, reflecting the communities in which they work. The company’s colour population is around 40%, with the black population around 5%. While the gender balance is even across the firm as a whole, the proportion of women leaders drops at senior levels. In order to address this issue, S4 have initiated the S4 Women Leadership Programme at UC Berkeley. The first intake of approximately 50 women have already started their six-month virtual course. There will be more intakes in future from across the firm.

Social Case Study

Titan Industries

Image source: (Titan Company)

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 member and 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.