Asia Dragon Trust : Sustainable Investment Report

Sustainable Investment Report

Asia Dragon Trust plc

31 December 2022 Prepared by: abrdn

abrdn.com

Sustainable Investment Report

31 December 2022

Portfolio Overview	1
Key Data and Portfolio Ratings	2
abrdn ESG Analysis	3
Carbon Analysis	4
Benchmarking: MSCI ESG Ratings	6
Active Ownership	7
Active Ownership: Case Studies	8
Glossary	11
Disclosure	12

Sustainable Investment Report

31 December 2022

Portfolio Overview

Asia Dragon Trust plc

FUND SIZE

As at 31 December 2022, the fund size was £ 564.92m

Sustainable Investment Approach

How we embed ESG into the Investment Process

The benchmark for the fund is MSCI AC Asia ex Japan

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Sustainable Investment Report

31 December 2022

Key Data and Portfolio Ratings

Asia Dragon Trust plc

Below we set out some key information about the way ESG considerations have been embedded in the portfolio

abrdn

c.60 Dedicated ESG experts across our business

5-star	1042
Rating across 9	Company
categories in thelatest	engagements
Principles for Responsible	covering ESG topics
Investment (PRI) assessment

Equities Investment Team

A+/A	100%
PRI Rating	of researched
for Integration/Active	companies include
Ownership in	integration of ESG
Listed Equities	company analysis
Fund
49.4%
		Lower
		carbon intensity
		relative to the Benchmark
119	33.6%
		Number of meetings	of meetings with at
		where we voted	least one vote against
			management
4/5
	Globes - Morningstar
	Sustainability rating

Engagement: time period referenced is preceding 6 months

Voting: time period referenced is preceding 12 months

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Sustainable Investment Report

31 December 2022

abrdn ESG Analysis

Asia Dragon Trust plc

Fund ESG Quality Score Distribution

As part of their company research, our stock analysts evaluate the ownership structures, governance and management quality of the companies they cover. They also assess potential environmental and social risks that the companies may face. These insights are captured in our company research with every company that we invest in given a proprietary overall Quality rating and a component of this is the ESG Quality rating. Companies are ranked from Laggards (5) to Best in class (1).

Portfolio scores continue to improve, with 5% of the companies in the portfolio assessed to be Best in Class, and 43% of the companies in the portfolio assessed to be Leaders, consistent with the portfolio's focus on quality. A further 51% of the companies are assessed to be A verage. We continue to see generally positive momentum from companies in the portfolio in terms of ESG, in terms of both practices and disclosure, and we were encouraged that the second half of the year saw a number of upgrades to our scores, often following extensive engagement. Non e of the portfolio is assessed to be Below Average, and the portfolio does not hold any companies assessed to be Laggards.

100%

80%

60%

51%

43%

40%

20%
				5%
0%
Laggards	Below Average	Average	Leaders	Best in Class
Source: abrdn

Analyst
ESG		5		4
rating
		Laggards		Below average
Examples	•	Many financial	•	Evidence of some financially
of inputs		controversies		material controversies
	•	Severe governance	•	Poor governance or limited
		concerns		oversight of key ESG issues

3

Average

• ESG risks are starting to be considered in company stategy.
• Disclosure in line with regulatory requirements

2	1
Leaders	Best in class
• ESG risks are considered as	• ESG considerations are
part of principal business	material part of the
	company's strategy

• Disclosure is good but not

best in class

• Excellent disclosure

• Poor treatment of	• Some issues in treating	• Governance is very good	• Makes opportunities from
shareholders	minority shareholders poorly • Governance is generally		strong ESG risk
	good but some minor		management
	concerns

The above chart may not total 100% due to the share class owned by the fund not being the primary share class.

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