Quarterly Letter, EIP

Quarterly Letter from Chairs, ESG Investing Program, Q3 2023

Successful Completion of EIP’s 3rd Bootcamp Amidst Stabilizing Market Conditions

Dear Sponsors, Board of Advisors, and Members,

We share with great pleasure that the 3rd Batch of our EIP members have successfully completed their bootcamp and have been allocated to the recently reorganised portfolios (with the consolidation of Team Prism and Team Allas to form Team Aurora).

With their allocation, our three portfolios can be expected to benefit from a variety of viewpoints and perspectives as the new members have different backgrounds, interests and desired career paths. This enhances the respective portfolios’ ability to evaluate opportunities and challenges from multiple angles, resulting in robust and well-informed decision making.

Over the past two years, the Federal Reserve has raised its benchmark rate 11 times in an effort to tame inflation. With inflation slowing down, analysts expect Feds to hold rates steady and begin cuts in 2024. With this expectation of an economic softening and improved financial conditions, portfolios are displaying increased allocations in comparison to previous quarters. Additionally, portfolios can be seen utilising the initial memos drafted by individual members when making their investment decisions as well. The initiative has resulted in more innovative and diverse investment strategies.

To promote new stock pitches and active consideration of ESG factors, we have introduced a guideline/template for monthly meetings. It stipulates that each portfolio is required to initiate a new stock once every two months and conduct an ESG assessment based on the ESG factors that are material to the business. We chose to apply the materiality principle to identify and prioritize ESG issues that have a direct impact on the target company's long-term performance. By focusing on material ESG issues, we can address the most critical sustainability challenges that are pertinent to the target company’s industry and business model. This can also influence a company’s valuation as ESG performance can be incorporated into the model as well.

Portfolio Performances

EIP will continue to make responsible ESG investments, paving the way towards a sustainable future as portfolio companies undertake significant efforts to mitigate their ESG risks. Some of the key themes to look out for as we venture into Q4 include renewable energy and clean technology, waste and water management as well as cybersecurity and data privacy.

Best regards,

C M R Sooria (Chairperson) / Sim Jia Yang (Co-Chairperson)