We are pleased to present our ESG & Active Ownership Report for Q3 2023.  A relatively quiet Summer period quickly gave way to a jam-packed September, with investment research and engagement trips to Hong Kong, Japan, and Sri Lanka.

Our lead article picks up where we left off last quarter – in China – this time focusing on the country’s sprawling solar industry. While solar power is undoubtedly an exciting energy transition technology, in China we find that state-sponsored polysilicon overcapacity and allegations of forced labour weigh on the investment case. We discuss how we think about such issues, as well as how our supply-focused approach highlights alternative ideas which play to the same overarching theme.

Elsewhere, Chris Beaven discusses the investment team’s recent engagement and research trip to Japan, where corporate governance reforms – bolstered by activists – are setting the stage for improving shareholder returns.

In July and August we were pleased to be joined by Girls Are INvestors (‘GAIN’) intern Sophia Ground, who joined the investment team, learnt about the capital cycle approach, and undertook a project studying the portfolio’s materials exposure. An extract from her report is published on pages 11-12. The team at Hosking Partners would like to thank Sophia and wish her all the best as she embarks on a Master’s degree at Imperial.