IGI Logo

Axis AMC & ESG

At Axis AMC, we view ourselves as the ‘owners’ of the business we invest in. This is reflected not only in the way we evaluate a business and work with management, but as well as our time frame for investment. As a house, we are long term in focus. The approach is not just as an investor but as an ‘owner’ which is a key differentiating feature and reason for our success. We focus on generating long term capital appreciation by investing in a diversified portfolio of companies demonstrating sustainable practices across Environmental, Social and Governance (ESG) parameters.

In our analysis, quality companies are those that have a strong competitive positioning, sound balance sheets and cash flows, credible management team and sustainable growth potential. Companies that meet these criteria are included in the investment universe and on which detailed fundamental research is carried out. Our portfolio construction approach is bottomup, benchmark-agnostic and focused on investing in our best ideas that can provide sustainable growth while controlling portfolio risks. Much of the prevalent ESG thought process is therefore embedded in our investment philosophy and is largely incorporated in our investment process. The Axis ESG Equity Fund will invest in a portfolio of companies that meet the internal ESG criterion on an ongoing basis. The ESG score will be a points based evaluation of companies on environment, social and governance parameters.

Our Approach

At Axis we see ourselves as long-term stewards of our investors’ capital and this philosophy naturally leads us to focus on the long-term prospects for the companies in which we invest. Axis manages its portfolio with the objective of generating returns consistent with funds’ objectives. It is therefore central to our investment process to consider each company's ability to create, sustain and protect value. We believe that analyzing a company’s exposure to, and management of, Environmental, Social and Governance (ESG) factors, in addition to traditional financial analysis, will enhance our understanding of a company’s fair value and its ability to deliver long-term sustainable returns.

Integration

We employ an integration approach to ESG rather than a simple screening. While we do not focus on real world outcome in terms of specific targets pertaining to emissions, pollution we look into various ESG factors as per the integration approach in order to get a holistic view of the company. We believe that relying on ratings or quantitative screens, risks oversimplifying ESG considerations. A more careful analysis can enable investors to understand the business models and motivations of management, within the context of a company’s operating environment. This is particularly relevant in Indian markets where disclosure levels are uneven. Furthermore, engagement with investee companies can improve our understanding of the issues they face and their approaches to managing them, helping us to protect or enhance the value of our investments.

To Read Complete Report & Disclaimer Click Here

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer