Climate Change
We acknowledge climate change to be an issue with the potential to be financially material to the investments we make. As an investment manager seeking to generate returns for our clients, we must adequately consider financially material risks relating to the transition to a low carbon economy and the physical impacts of climate change within our investment processes. Where such changes present opportunities for some, we must also assess whether these companies are sufficiently capitalising on them.
Paradice has also established a firm-wide Climate Action Plan to shape our climate response as both a business and an investor over the coming years.
Integration
To support understanding of climate-related risks at both a company and portfolio level, Paradice has developed an in-house climate assessment tool. This tool supplements our core ESG integration approach, and highlights companies which require deeper climate-specific assessment, or where a portfolio’s overall climate profile may warrant additional consideration by portfolio managers.
Stewardship
We also utilise engagement as a climate risk management tool, leveraging wherever possible the influence afforded through share ownership to encourage better risk management practices and climate-informed business strategies where in the best interest of our investors. Where relevant and appropriate, we complement engagement activity with proxy voting actions. For example, voting on climate-related shareholder resolutions.
Investment restriction
While we primarily manage climate risks and opportunities through ESG integration and stewardship, as a firm we have made a decision to not become a substantial shareholder (defined as share ownership of more than 5%) in companies which generate over 25% of their revenue from the mining of thermal coal.
