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Impax Asset Management

PRI reporting framework 2017

Export Public Responses

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(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

Our listed equity funds seek out mis-priced companies that are set to benefit from the long-term trends of climate change, inadequate infrastructure, environmental constraints, changing demographics, urbanisation and the resultant increases in resource scarcity. Investment is focused on a small number of deeply researched global equity strategies across alternative energy, energy efficiency, water, waste and sustainable food. We positively screen for companies active in these areas, with a min. 20% of revenues.

Our investable universe is screened quarterly on a normative-basis by a third party ESG-research provider, in order to ensure that none of our companies breach any of the ten UN Global Compact Principles. We will not invest in companies that breach fundamental normative issues such as Human Rights, Labour Rights or involvement with corrupt practices. However, we do not perform negative screens, across all our listed equity investments.

We also screen all the companies in our investable universe for material ESG-aspects. An ESG-analysis is an integral part of our investment analysis and process, it provides us with a more complete picture of the companies we invest in. We analyse our companies' governance structures from a country-perspective and their environmental/social risks from a materiality-based sector perspective.

Screened by

          Companies involved in the production / manufacturing of cluster munitions or anti-personnel mines would be screened out, as this constitutes as a human rights breach.
        

Description

Our investable universe is screened on a normative-basis by a third party ESG-research provider on a quarterly basis, in order to ensure that none of our investee companies are in breach of any of the ten UN Global Compact Principles. We will not invest in companies that breach fundamental issues such as Human Rights, Labour Rights or are involved with corrupt practices.

Companies involved in the production / manufacturing of cluster munitions or anti-personnel mines would also be screened out, as this constitutes as a human rights breach.

 

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.

A third party ESG-research provider screens our investable universe every quarter to identify any potential UN Global Compact issues. Companies which are found to have minor issues are flagged and we monitor these particularly thoroughly and engage with these companies where relevant. Companies that are not compliant with the UN Global Compact principles are excluded from investment.


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.

          Third party independent committee verifies bi-annually the continued validity of the environmental inclusion criteria and definitions, underpinning our positively screened investment universe.
        

07.2. Additional information. [Optional]

Positive screening for environmental activity

Companies must have at least 20% of revenues from environmental or resource efficiency activities to be part of the Impax investment universe. Impax has dedicated staff developing and maintaining the investment universe. The entire universe is screened once a year to ensure that all companies still adhere to the minimum revenue target. Companies that no longer attain this minimum level of revenue are removed from the investable universe database. There is a third party independent committee that verifies bi-annually the continued validity of the environmental inclusion criteria and definitions, underpinning our positively screened investment universe.

Normative screening for UN Global Compact breaches

A third party ESG-research provider screens our investable universe every quarter to identify any potential UN Global Compact issues. Companies which are found to have minor issues are flagged and we monitor these particularly thoroughly and engage with these companies where relevant. Companies that are not compliant with the UN Global Compact principles are excluded from investment and excluded from our "A-list" or investable universe database. Companies involved in the production / manufacturing of cluster munitions or anti-personnel mines would also be screened out, as this constitutes as a human rights breach. We use external data providers to flag controversial business activities.

Screening of ESG criteria (ESG analysis)

ESG-analysis is an integral part of the Impax investment process. Our multi-step Listed Equities investment process incorporates ESG parameters into the investment analysis of companies through a thorough examination of company management/board structures, governance, ownership, corporate behaviour and Environmental and Social policies, processes and disclosures, following a materiality approach. We assign a proprietary ESG-rating for each company (Excellent, Good, Average, Fair and Excluded). If a company scores below a threshold-level, it will be automatically excluded from our investable universe. In addition, for Hong Kong and China-based companies, we have a further "governance tool" in place and we have identified five governance metrics that each company entering our investable universe must have in place. Finally, all companies must be approved by the Investment Committee on ESG-criteria before being admitted to the Impax universe of investable stocks.


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

          Third party independent committee verifies bi-annually the continued validity of the environmental inclusion criteria and definitions, underpinning our positively screened investment universe.
        

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

Positive screening for environmental activity

Companies must have at least 20% of revenues from environmental or resource efficiency activities to be part of the Impax investment universe. The entire universe is screened once a year to ensure that all companies still adhere to the minimum revenue target. Companies that no longer attain this minimum level of revenue are removed from the investable universe database.   

Normative screening for UN Global Compact breaches

A third party ESG-research provider screens our investable universe every quarter to identify any potential UN Global Compact issues. Companies which are found to have minor issues are flagged and we monitor these particularly thoroughly and engage with these companies where relevant. Companies that are not compliant with the UN Global Compact principles are excluded from investment and excluded from our "A-list" or investable universe database. Companies involved in the production / manufacturing of cluster munitions or anti-personnel mines would also be screened out, as this constitutes as a human rights breach. We use external data providers to flag controversial business activities.

Screening of ESG criteria (ESG analysis)

ESG-analysis is an integral part of the Impax investment process. Our multi-step Listed Equities investment process incorporates ESG parameters into the investment analysis of companies through a thorough examination of company management/board structures, governance, ownership, corporate behaviour and Environmental and Social policies, processes and disclosures, following a materiality approach. We assign a proprietary ESG-rating for each company (Excellent, Good, Average, Fair and Excluded). If a company scores below a threshold-level, it will be automatically excluded from our investable universe, A-list and can not be traded in our trading systems. In addition, for Hong Kong and China-based companies, we have a further "governance tool" in place. We have identified five governance metrics that each company entering our investable universe must have in place. Finally, all companies must be approved by the Investment Committee on ESG-criteria before being admitted to the Impax universe of investable stocks.

We have a proprietary data analytics and risk tool (VIPER-analytics) that identifies and immediately flags any breaches to our screening rules and principles.

08.3. Additional information.[Optional]


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