Herald Investment Trust | ESG

Herald Investment Trust’s objective can be summarised as being to achieve capital appreciation through investments in smaller quoted companies in the areas of technology, media and telecommunications (TMT). This founding purpose – to invest in smaller companies – arose from Herald’s belief that they offer greater potential for growth than larger companies because they often provide greater entrepreneurialism when addressing new markets created by technological developments. This conviction led Herald to focus on investing in smaller quoted companies in the areas of TMT. These companies create added value employment and have the potential to become the next generation of large companies, thereby generating attractive returns for shareholders.

As an externally managed investment company, Herald Investment Trust’s activities are all outsourced and therefore it does not have any employees. The Company also has a very limited direct impact on the environment as it has no greenhouse gas emissions and has given shareholders the option to receive soft copy financial reports and other information rather than printed hard copy.

Notwithstanding that the Company has no direct social or community impact, the board encourages the investment manager, Herald Investment Management Ltd (HIML), to consider ESG factors when selecting and retaining investments. The Company has given discretionary voting powers to the investment manager. The investment manager votes against resolutions it considers may damage shareholders’ rights or economic interests.

The Company believes that it is in the shareholders’ interests to consider ESG factors when selecting and retaining investments and has asked the investment manager to take these issues into account as long as the investment objectives are not compromised. The manager does not exclude companies from its investment universe purely on the grounds of ESG issues but adopts a positive engagement approach whereby matters are discussed with management with the aim of improving the relevant policies and management systems and enabling the manager to consider how ESG factors could impact long term investment returns.

The investment manager’s statement of compliance with the UK Stewardship Code can be found under the Responsible Investing page of HIML’s web site. The investment manager’s policy has been reviewed and endorsed by the board of Herald Investment Trust plc.