Welcome to our ESG & Active Ownership Report for Q2 2023. This quarter trips to the US, Italy, South America, and Australia have punctuated a Spring calendar already busy with voting season, over 100 company meetings, and several ESG-related engagements. We have been fortunate to be joined by two interns – Sophia and David – who settled into life in the investment team and contributed to some important work on miners and banks respectively. In this context, we would like to highlight the brilliant charity GAIN (Girls Are INvestors) – who introduced us to Sophia – and the important work they do helping reduce the gender imbalance that still exists across our industry.

The lead article of this quarter’s report addresses our approach to China exposure and the geopolitical uncertainty that surrounds the US-China rivalry, in particular the issue of Taiwan. The Hosking Partners portfolio is underweight China in direct terms, but remains exposed to its economy in several important, indirect ways. The article discusses how we think about this issue, as well as shedding light on our approach to geopolitical uncertainty more broadly.

Elsewhere, analyst Steve Chambers recounts the key take-aways from his recent trip to Central and South America. This fascinating part of the world offers some compelling valuations, but it remains difficult to get comfortable with elements of political risk and uneven governance.