To us, sustainable investing is achieved when we constantly strive to elevate the quality of the 3 primary pillars of our operations.

The first pillar is our human capital. Gary Becker, who won the 1992 Nobel prize in Economics and who is one of the world's foremost experts on human capital, states that 75% of the value of a modern economy lies in its human capital. In our day to day activities, we cannot help but realize how true this precept is. Especially for an asset light and knowledge-based services company like Kendall Court, human capital is the most fundamental aspect of our platform.

The second pillar is our disciplined focus on bottoms-up fundamental analysis. We are not short term traders. As a long-term investor and a micro investor, our primary task is to understand our investees and their sector dynamics from the ground up. This is the only way for us to gain sufficient insight into the risks and opportunities offered by our long-term investments. Our success is directly proportional to the amount of effort we spent building on our knowledge and intuition. There are no shortcuts.

The third pillar is our holistic achievement of all our stakeholders' needs. Our business cannot truly be called sustainable until we truly understand what each of our stakeholder needs. Our stakeholders start internally with ourselves (yes, our own individual needs), our investors and our employees, and subsequently radiate outwards touching on everyone our business comes into contact with. This obviously includes our investees, service providers, intermediaries and indirectly the stakeholders of our stakeholders.

When we begin to map our stakeholders' needs, it becomes virtually impossible to ignore the environmental, social and governance (ESG) aspect of investing. For the reality of living in the 21st century, with its myriad of environmental, social and governance problems, requires that business be conducted in a way that stops the propagation of those problems. Our society demands it. Our stakeholders demand it. But most importantly, our personal ethics demand it.

We have witnessed first-hand the effectiveness of adopting a strong ESG mindset in business. Adopting the mindset is like switching on a light bulb. Once switched on, it immediately illuminates all the problem areas in a company's operation. All companies have problems, big or small. Their causes vary. Having an ESG mindset is very effective in identifying problems which are created either out of lack of long-term care, convenience or a wasteful mentality due to false assumptions of abundance. When implemented genuinely, an ESG mindset is a very effective tool for:

  • reducing waste and hence costs;
  • spurring creativity, thinking in-the-round and out of the box,
    leading to potential new revenue sources;
  • creating a more meaningful re-engagement with suppliers and customers based on their needs, thereby materializing potential P&L benefits;
  • creating a more inspired workforce and a stronger human capital;
  • recalibrating risk based on a proper and honest assessment of
    business risk mitigation; and
  • increasing the value of the overall business from the implementation of all of the above.

Kendall Court has taken active steps to promote sustainable investing through active ESG promotion. We have streamlined all our operating protocols to include an ESG awareness; developed ESG toolkits to be used for screening and monitoring investments; signed up as a member of The United Nations Principles for Responsible Investment (UNPRI); trained the people in our organization, as well as our investees and service providers on acquiring an ESG mindset through workshops conducted by recognized regional ESG experts; trained our investment team in ESG risks and opportunities specific to the coal and gold mining, palm plantations and oil and gas sectors; trained our human capital in conscious business, that is conducting business by promoting the intelligent pursuit of happiness in all its stakeholders and expressing our essential values through our work; and lastly, undertook to report our own sustainability footprint according to the Global Reporting Initiative (GRI) standard - all in our efforts to reap the full benefits of sustainable investing.

In conclusion, we are firm believers that incorporating sound ESG principles across our investment platform is the only way to go. In more ways than one, we are a genuine capital partner to businesses who are willing to better its ESG framework. With just a little extra effort, it is in plain sight for all to see that ignoring ESG principles can be very detrimental to a business. Managers can be blindsided by unexpected business and brand failures such as tainted products, worker suicides or severe regulatory fines for environmentally damaging business practices. On the other hand, managers who have made genuine efforts to care and raise their ESG-conscious practices are much more equipped to mitigate risks and seize on new opportunities. Kendall Court works to assess, monitor and execute improvements to our own ESG footprint, as well as our investees'. A willingness to strive towards ESG improvements is a prerequisite for investees to receive our capital, and Kendall Court will come in as a value added partner to enhance this core aspect.


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