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Mirabaud

PRI reporting framework 2017

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 03. Percentage of each incorporation strategy

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
10 %
Percentage of active listed equity to which the strategy is applied
10 %
Percentage of active listed equity to which no strategy is applied
80 %
Total actively managed listed equities 100%

03.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

Screening alone

Mirabaud manages client mandates that apply specific product-based and/or conduct-based exclusion

 

Screening + Integration

  1. Screening: A product-based screening is done to exclude any company involved in activities related to prohibited war material/controversial weapons. Depending on the funds/mandates, we also exclude companies deriving a significant percentage of their turnover from armament, pornography, gambling and/or tobacco.
  2. Integration: It was a strategic decision from the executive management based on the conviction that ESG analysis brings an added value to the investment process. The ESG integration strategy completes the financial approach and helps fund managers in the decision process and portfolio construction.

 

03.3. Where assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Please refer to answer LEI 03.2 above.


LEI 04. Type of ESG information used in investment decision

04.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

04.2. Provide a brief description of the ESG information used, highlighting any differences of sources of information across your ESG incorporation strategies.

The work carried out by the Portfolio Managers (PMs) and the SRI Officer is based on an in-house ESG analysis matrix fed with complementary data obtained from a variety of sources:

  • From internal research and analysis made by the PMs and/or the SRI Officer;
  • From the companies being analysed (CSR publications and corporate websites, meetings with company management)
  • Provided by external extra-financial rating agencies/data providers (such as Sustainalytics and Bloomberg);
  • From brokers producing ESG focused research (such as Natixis, etc.)
  • From proxy voting providers (ISS)
  • From other stakeholders (NGOs, outside experts/organisations, etc.).

04.3. Indicate if you incentivise brokers to provide ESG research.

04.5. Additional information.[Optional]


LEI 05. Information from engagement and/or voting used in investment decision-making

05.1. Indicate if your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

05.2. Additional information. [Optional]

Engagement is done by the portfolio managers in collaboration with the SRI Officer. The information gathers during the engagement is therefore always available for the investment decisions-making process.

Proxy voting information are available for portfolio managers through our proxy analysis provider platform, opened to all portfolio managers.


(A) Implementation: Screening

LEI 06. Types of screening applied

06.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

We identify and exclude the companies with the lowest 10% of scores in each sector.

We exclude companies involved in prohibited war material/controversial weapons.

In some strategies we also exclude companies deriving an estimated 5% or more of turnover from armament, gambling, pornography and/or tobacco.

Screened by

Description

Some strategies focuses on companies having the best ESG performances, i.e. companies focused on long term growth and active in new technologies/initiatives which are deemed to promote economic development at the regional or global level.

Screened by

Description

Some strategies apply a screening in potential investee companies to confirm they are not subject to major ESG controversies, eg violation of international standards such as UN Global Compact principles and/or international conventions.

06.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

The screening criteria were established by the management and the fund management teams. These criteria are a minimum requirement to be upheld at the early stage of the stock selection for the funds for which they are applied. They are reviewed on an annual basis. The management teams of the funds notify clients during meetings/presentations and by email.


LEI 07. Processes to ensure screening is based on robust analysis

07.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

07.2. Additional information. [Optional]


LEI 08. Processes to ensure fund criteria are not breached

08.1. Indicate which processes your organisation uses to ensure fund criteria are not breached

08.2. If breaches of fund screening criteria are identified - describe the process followed to correct those breaches.

Any breach will be reported and necessary measures will be taken (disinvestment) if necessary.

08.3. Additional information.[Optional]


(C) Implementation: Integration of ESG issues

LEI 10. Review ESG issues while researching companies/sectors

10.1. Indicate if E, S and G issues are reviewed while researching companies and/or sectors in active strategies.

ESG issues

Coverage/extent of review on these issues

Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

10.2. Additional information. [Optional]


LEI 11. Processes to ensure integration is based on robust analysis

11.1. Indicate which processes your organisation uses to ensure ESG integration is based on a robust analysis.

11.2. Describe how ESG information is held and used by your portfolio managers.

11.3. Additional information.[Optional]


LEI 12. Aspects of analysis ESG information is integrated into

New selection options have been added to this indicator. Please review your prefilled responses carefully.

12.1. Indicate which aspects of investment analysis you integrate ESG information into.

12.2a. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

          We incorporate ESG risks and opportunities at the early stage of the stock selection. Significant ESG criteria appreciation will influence the value/fundamental analysis.
        

12.3. Describe how you integrate ESG information into portfolio construction

ESG issues are integrated in the investment process at all three levels: screening, analysis and portfolio construction.

By applying our "Castle, Moat and Goldmine" investment philosophy to the companies we research, we implicitly look at ESG issues:

  • The Castle represents the strength and quality of business, and the integrity of the management team. We could not invest in a company unless we understood how well they comply with governance best practices.
  • The Moat represents the quality of the business franchise, and its long term sustainability. Any research to this must automatically take into account the sustainability of that franchise in the face of changing global conditions, among others climate change, resources scarcity.
  • The Goldmine (or cash generation) takes into account the risk of this cash flow being negatively impacted by ESG issues, such as fines, costly legislation, etc.

The Castle, Moat Goldmine philosophy is applied across all or our equity approaches.

12.4a. Describe the methods you have used to adjust the income forecast / valuation tool

ESG risks and opportunities are incorporated at the early stage of stock selection through a 'stress test' process. ESG scores also influence the size of positions in the portfolios. Higher rated stocks are allocated more value and more weight.

12.2b. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

12.4b. Describe the methods you have used to adjust the income forecast / valuation tool

See above answer.

12.5. Additional information.


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