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Environmental, Social and Governance Policy

Kasikorn Asset Management Co., Ltd.
December 2018


1) KAsset and ESG
KAsset, as the leading domestic asset manager, our investment approach is to invest in companies which generate both financial and sustainable economic value for investors. We strive to integrate Environmental, Social and Governance (“ESG”) issues as well as ethical issues into our investment analysis, decision-making process and portfolio construction across all asset classes.

In addition, as being a wholly owned subsidiary of Kasikornbank Plc. (“KBank”) which is one of Thailand’s largest commercial banks, our investment practice is aligned with our Group’s policy which conducts business with adherence to the sustainable development philosophy, focusing on the economic, social and environmental factors in all business decision-making.

Being engaged in an asset management industry, KAsset duly recognizes the public's trust and faith in the Company as keys to success for our business. We truly believe that good corporate governance will help sustain and enhance the Company's operations, which are means to achieve our ultimate goal to maximize our customers’ satisfaction. With our top priority is given to investors' benefits, we seek to ensure effective measures to prevent conflict of interest and assure transparency.


2) Integration of ESG into Our Investment Process


KAsset incorporates ESG into our investment process through securities selection which is our core investment value. Our ESG analysis is conducted through management discussions, questionnaires, company visits, site (factory) visits and company’s relevant report filings e.g. 56-1, annual and interim financial reports, shareholders meetings agendas etc. Currently, we evaluate ESG through our internal checklist and evaluation form.

Environmental & Social issues:

Our evaluation on Environmental & Social factors are focused on issues such as:-

- Energy Efficiency
- Water Efficiency
- Waste Management
- Child Labor
- Discrimination in respect of employment and occupation
- Established “CSR” Policy

Corporate Governance issues:

Our philosophy and approach to corporate governance and proxy voting are based on corporate governance principles listed below:-

- Integrity
- Transparency
- Independence
- Responsibility
- Accountability
- Fairness

We have established an internal proxy voting policy as a guidance to our exercise of voting rights and appropriate actions to be taken, if necessary, as well as to support and encourage sound corporate governance practice.

Corporate governance issues are systematically integrated through proxy voting and engagement process through active communication with the invested companies. For example, for any shareholder meeting which “against” vote is potentially casted, KAsset will contact companies before exercising votes to discuss on the matter and explain the reasons for vote cast in opposition to management’s recommendations. This provides us opportunities to communicate and raise our concerns to the Companies. Post-shareholding meetings, the follow-up process will be carried out to ensure our investment decision/appropriate action towards the companies, if necessary.

3) A Summary of KAsset Firm-Wide ESG Implementation by Our Product Segment

A) Active Equity Strategy:
- ESG is assessed through ESG evaluation template and questionnaire at part of stock selection process. The evaluating factors depend on the nature of an individual company and its industry that could have a reputational, regulatory and/or financially impact on a company which potentially deteriorate shareholder’s value. However, for small capitalization companies, which have limited information, an evaluation is conducted on a best effort basis.

B) Indexing Equity Strategy:
- ESG is not considered in this particular strategy.

C) Fixed Income:
- ESG is considered as an integral part of our screening process in conjunction with both qualitative and quantitative analysis.
- Corporate debentures and non-governmental fixed income related instruments: ESG is conducted as
part of our credit analysis subject to available relevant information. Any questionable ESG issue will be scrutinized through due-diligence process until it is answered. ESG evaluation of any credit rating agency, if available, will also be taken into consideration. The exclusionary screening list is made to exclude any debenture issuer that falls out of KAsset’s ESG filters, such as illegal activities, accounting manipulation, executive misconduct, to be out from our investment universe.
- Government bonds / fixed income instruments: ESG policy is not currently applicable.

D) Fund of Funds:
- ESG is evaluated at asset manager level when selecting third-party asset managers.

E) Property/Infrastructure funds managed by KAsset:
- ESG is part of the overall assessment process. For example, check for related environmental regulation and law for property/infrastructure compliance.

​F) Trustee for Real Estate Investment Trust (REITs)
- ESG is evaluated during REIT manager selection process and asset due diligence, prior to an acceptance of Trustee role.
- REIT Manager is encouraged by Trustee to do ESG analysis throughout the ongoing management of REIT.