At the end of a strong year of performance for Hosking Partners amidst an ongoing global market regime shift, we focus this quarter’s active ownership report by contrast on the quiet and steady progress being made within the portfolio. We explore a long-held company that may be overlooked as an obvious ESG leader within its industry, consider the impact of our active engagement approach with one of our largest portfolio holdings and highlight the importance of voting against management in some cases, even when share performance has been strong, to help drive change.

 This quarter, we introduce the first of our “hidden ESG” company series, where we will explore companies that at first glance may not check the traditional ESG standards box, but in fact are making significant environmental progress, while also offering compelling investment upside. First up is Steel Dynamics, where we discuss management’s long-term goals and incentives and the sustainability of the business.

With rising geopolitical tensions, it is clear there is an ongoing shift in thinking about defence stocks and the place for these companies in global portfolios. Our engagement piece for this quarter explores our ongoing dialogue with leading UK defence company, Babcock, a position we have held since 2023. Babcock is a great example of a company with a transformative management team that takes capital allocation and governance seriously.

As we look ahead to 2026, we will continue to evolve our active ownership report to share deeper insights directly from the portfolio managers into some of the differentiated businesses we own and how we are using our position as a long-term, active shareholder to assess and support management and to advocate for change where appropriate.