About
Environmental, Social and Governance Policy
Our Firm
Driehaus Capital Management LLC is an independent boutique investment adviser with a 35+ year heritage of providing active management to professional investors.
Our mission is to deliver superior investment results and exceptional client service while maintaining the highest ethical standards.
Our culture is defined by an entrepreneurial spirit and passionate, intellectually curious, open-minded employees. We are committed to fostering and preserving a culture of diversity and inclusion with an emphasis on integrity, collaboration and community.
That commitment includes active consideration of environmental, social and governance factors into our investment processes.
35+
Year heritage of providing active management to professional investors.
Introduction
We believe material environmental, social and governance (ESG) factors will affect the sustainability of companies’ future earnings and profitability and therefore will have an impact on the risk and return potential of investments we make.
We believe the linkage between ESG factors and corporate fundamental operating metrics will likely persist, if not increase, in the future.
Many of our clients are interested in understanding the social and environmental impact of their portfolios in addition to their investment results.
For these reasons we integrate ESG factors into our analysis of listed equity investments.
Scope
This policy applies to the listed equity investments held by the equity-oriented strategies we manage for clients and market to prospective investors. These strategies represent a significant majority of our client-strategy assets under management.
Responsibilities & Oversight
Our equity Portfolio Managers, Analysts and Risk Management Team are responsible for implementing the ESG policy.
The ESG Committee is responsible for reviewing the policy annually and amending it as necessary in collaboration with the Portfolio Managers, Analysts and Risk Management Team.
Our Investment Policy Committee provides oversight of the policy.
The policy is reviewed and approved by our President.
Integration
We integrate ESG factor analysis into our investment process through quantitative and qualitative analysis.
Quantitatively, we layer ESG metrics from external sources into the quantitative aspects of our research process. By isolating potential investments that score poorly or have negative commentary, we seek to identify risks that may not always be obvious through traditional fundamental analysis.
Qualitative fundamental analysis is also conducted on companies, including an assessment of the companies’ ESG footprint.
Consistent with our risk management process, the purpose of this analysis is to ensure that ESG-related risks are identified, understood, and controlled, to the extent practical.
Portfolio Guidelines
Our general approach to ESG is inclusionary as opposed to exclusionary. ESG factors are one part of the overall investment analysis our investment teams conduct when determining the potential for companies to deliver differentiated earnings growth. Rigid constraints, guidelines and negative screening are not applied within our traditional equity investment strategies.
We may, however, manage custom segregated account mandates with stricter ESG or Socially Responsible Investment constraints that meet client-specific guidelines and policies.
Engagement & Active Ownership
As part of our due diligence, we generally expect to engage with company management teams on potential ESG concerns that we have identified. However, we typically avoid investor activism as a method to improve corporate performance to generate returns. If we are uncomfortable with the risks of an investment in a company - ESG or otherwise - our general approach is to divest the investment from our client portfolios or avoid the investment in the first place.
Additionally, when a client authorizes Driehaus to vote proxies on their behalf, we vote in accordance with Institutional Shareholder Services Inc.’s Sustainability proxy voting policy unless a client has directed us otherwise.
Commitments to International Standards
Driehaus is signatory of the Principles for Responsible Investment and we are supportive of trends related to the growing importance of ESG. We welcome dialogue with our clients and industry participants regarding ESG initiatives and organizations that are important to them.