CoreCommodity’s Environmental, Social and Governance (“ESG”) Considerations

CoreCommodity believes ESG serves an important role within its strategies. The Firm maintains a strong commitment to the inclusion of ESG considerations in its investment process in order to best serve the long-term interests of its investors.

 

UN Principles for Responsible Investment (“UN PRI” or “PRI”)

CoreCommodity is a signatory to the UN PRI. The Firm believes that ESG considerations can be important as part of the investment process. Incorporating ESG principles into the investment process may also better align investors with the broader objectives of society.

 

Investment Process

 

Proxy Voting Policy

CoreCommodity’s active management seeks to incorporate changing market dynamics into the investment portfolio. ESG considerations are incorporated into the investment process including, but are not limited to:

  • No Physical Delivery of Commodities
  • Focus on Liquidity
  • Analysis of Market Participants
  • Market Fundamentals
  • Preservation of Price Discovery and Risk Hedging
  • Diversification
  • Natural Resource Equities 
 

The Firm employs Institutional Shareholder Services Inc. (ISS) as a proxy voting provider. Specifically, CoreCommodity utilizes ISS’s Sustainability Voting Policy which integrates ESG considerations into proxy votes and is consistent with the objectives of sustainability-minded investors and fiduciaries.

The Firm’s most recent quarter end proxy voting report is available here: Q4.xls.

 

Research

 

Reporting/Transparency

Ongoing research is conducted to understand the impact of ESG considerations on the markets prospectively. ESG considerations impact the investment process by influencing larger secular trends within supply and demand of the underlying commodities. The potential impact of changing consumption and production profiles is an input into the fundamental analyses which inform investment decisions.

 

In keeping with ESG best practices, the Firm provides transparency to investors with respect to research, process and portfolio positioning. Additionally, as a signatory to the UN PRI, the Firm provides public reporting through the Reporting Framework.

 

Corporate and Policy Engagement

 

Climate Aware Inflation Protection

CoreCommodity personnel have authored articles discussing ESG issues and advocating for ESG policy changes. Additionally, CoreCommodity have addressed ESG issues at industry conferences and public speaking engagements. The ESG Policy Committee actively examines corporate engagement opportunities.

 

The Climate Aware Inflation Protection strategy builds upon our firm’s inclusion of ESG best practices and is intended to provide inflation protection to institutional investors while excluding investments in fossil fuels. In addition to providing broad based exposure to global commodity markets, which have provided an effective portfolio hedge during periods of rising inflation historically, the strategy invests in markets closely aligned with more sustainable economic growth, cleaner technologies, and concern for societal outcomes.

 

 

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