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PM Capital

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement » Overview

Overview

LEA 01. Description of approach to engagement

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

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.4. Provide a brief overview of your organization’s approach to engagement

We believe that ESG is simply part of good business practice and we look very closely at the regard a company's management team has for it. We incorporate ESG principles early on, with manufacturers of tobacco and weapons being screened from our investable universe.


The main areas that we cover within our research process include:

Environment - sustainability management practices and carbon emission policies
Social - this depends on the company but will include occupational health and safety standards, and labour practices
Governance - board structure, operational risk management, and directors and executive remuneration.

In the same way that there will be negative economic consequences for those businesses that cut corners around ESG issues, we also believe that there are positive economic benefits for those businesses that are proactive and progressive when it comes to ESG.

This is why we incorporate ESG issues into the discount rate that we use to value businesses. These must be considered when looking at a company's risk management framework, given the impact they may have to the value of the company over time.


Not having a strong focus on ESG is, in our view, simply bad business, which leads to poor outcomes for investors.

01.5. Additional information [optional]

As investors in businesses, it is a natural part of our research process to consider environmental, social and governance (ESG) factors.

We incorporate ESG principles early on, with manufacturers of tobacco and weapons being screened from our investable universe. We also believe that ESG is simply part of good business practice and, due to our active and concentrated investment approach, we look very closely at the regard a company's management team has for it.

Where we see management not addressing ESG issues appropriately, we will apply a discount to the value of a company. Not having a strong focus on ESG is, in our view, simply bad business, which leads to poor outcomes for investors. PM CAPITAL is proud to be a member of ESG Research Australia, which aims to encourage better investment decision-making through active consideration of ESG issues.


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual/Internal staff engagements

          To support investment decision-making
        

Collaborative engagements

          To support investment decision-making
        

Service provider engagements

          To support investment decision-making
        

02.2. Additional information. [Optional]


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