Worldwide Healthcare Trust PLC (the “Company”) invests in the global healthcare sector with the objective of achieving a high level of capital growth. The Company and the Company’s Portfolio Manager believe that there is a high congruence between companies that seek to act responsibly and those that succeed in building long-term shareholder value.
The Board recognises that Environmental, Social and Governance (“ESG”) issues can impact the performance of investments. The Board holds detailed ongoing ESG related discussions with the Company’s Portfolio Manager and also with its external advisers. Two Directors, one of which being the Chairman, lead and coordinate the Board’s approach to ESG matters. The Board has delegated authority to its Portfolio Manager to evaluate investee companies’ performance on material ESG issues and also to engage with the management of investee companies on ESG, and these matters are discussed with the Board at every meeting.
The Company’s Portfolio Manager has developed a Responsible Investing Policy which has been incorporated into its overall investment process for the Company in order to enhance investment returns. The Portfolio Manager’s Responsible Investing Policy is aligned to the United Nations Principles for Responsible Investment (UN PRI).
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Sector-specific ESG evaluation relies on a thorough understanding of potentially material factors as well as the availability of complete, accurate and timely quantitative and qualitative data. The internationally recognised Sustainability Accounting Standards Board (SASB) has identified subsets of environmental, social, and governance issues most relevant to financial performance in each of 77 industries, including Pharmaceuticals and Biotechnology. The Portfolio Manager’s Responsible Investing Policy integrates sector specific guidance from SASB as well as a full range of other financial and non-financial factors when making investment decisions.
In addition, the Portfolio Manager’s Responsible Investing Policy lists exclusions from potential investment, for example companies involved in production or trade in illegal products, companies providing products or services causing severe environmental damage, companies using child or forced labour and companies manufacturing or trading in tobacco and/or e-cigarettes. The Portfolio Manager has also prepared an ESG Due Diligence Questionnaire documenting its ESG approach and integration in their investment process, which is aligned to the reporting requirements of UNPRI.
The Portfolio Manager engages with investee companies through meetings with management and proxy voting. The Board has delegated authority to the Portfolio Manager to vote the shares owned by the Company that are held on its behalf by its Custodian. The Board has instructed that the Portfolio Manager submit votes for such shares wherever possible and practicable. The Portfolio Manager generally follows the guidelines and recommendations of Glass Lewis & Co LLC, a leading proxy voting services provider, and is also encouraged to refer to the Board on any matters of a contentious nature. The Portfolio Manager has used Glass Lewis, one of the two most prominent proxy advisory services provider, for over 10 years and has generally agreed with their approach to proxy voting recommendations.
ESG is a rapidly evolving field and the Board is keeping abreast of developments, which includes seeking independent advice as and when appropriate and discussing this topic at every board meeting.
The Company complies with the AIC Code of Corporate Governance and has policies in place regarding Board diversity, integrity and business ethics.