Environmental, Social and Governance (ESG) Framework
A core component of the Firm’s Investment Philosophy is to determine the strength of a company’s corporate governance culture, including the alignment of its management team.
Gladstone makes multi-year long investments in winning companies with strong corporate governance and an emphasis on transparency and accountability, and takes short positions in fragile businesses with weak governance and misaligned management teams. The investment strategy aims at compounding returns and meaningfully outperforming equity markets over the cycle, while constraining volatility, through disciplined stock picking and our bespoke portfolio construction framework.
We identify shifts in profit pools and the companies best positioned to benefit from them, and those at risk of disruption. Environmental and social factors are implicitly integrated into the investment team’s due diligence, as we recognise that certain risk factors, such as carbon emissions or a lack of diversity of a company’s workforce and leadership team, can be long-term value destructive. As such, analysis of all potential risks to a company’s or industry’s long term profitability form part of our investment process, both in our stock picking analysis as well as through the lens of our risk management framework.
Firm Policies and Procedures
The Firm is strongly committed to risk management, compliance, and maintaining the highest ethical standards across all areas of our business. We maintain a culture of open dialogue and alignment of interest with our investors and are dedicated to having a diverse and collaborative working environment which facilitates our people’s personal and professional growth.
Gladstone is committed to providing equal opportunities and to avoid any form of discrimination across recruitment and all aspects of employment, including promotion and pay. The Firm is made up of people from a diverse range of cultures and backgrounds.
Our Equal Opportunities and Dignity at Work policy forms part of the Firm’s Employee Handbook.
Further, the Firm has family friendly policies in place, including maternity leave and paternity leave. These policies also form part of our Employee Handbook.
We are determined to ensure that nobody suffers from harassment, bullying or victimisation in the workplace. Disciplinary and Grievance procedures are in place to address any form of misconduct.
Gladstone’s Code of Conduct sets out the standards of behaviour that employees are required to adhere to and is intended to provide help in overcoming any ethical or legal challenges employees may face during their day-to-day working lives. The Code constitutes part of the Firm’s compliance manual.
Gladstone has implemented several initiatives and practices that allow the Firm to operate in a more socially and environmentally conscious manner. These include:
- Energy efficient illumination is installed throughout the company’s offices.
- Waste minimisation and recycling procedures have been put in place. This includes all employees being provided with reusable thermos bottles, to limit usage of single-use plastic drinking bottles.
- The Firm participates in Cyclescheme, a UK government-approved benefit scheme which encourages cycling-to-work by allowing employees to obtain tax relief on the cost of purchasing bicycles & accessories and spread out payments over 12 months.
- The Firm has implemented a hybrid ‘3+2’ working policy, providing the option for all staff to work from home for two days a week.
Team and Responsibilities
The President is responsible for overseeing and implementing ESG policies and procedures. These are reviewed quarterly, as part of the Firm’s Operational Risk committee meetings. The CIO is responsible for all investment-related activities.