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Perennial Value Management Limited

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
100 %
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.

All of Perennial's equity investments use an integration strategy to incorporate ESG as we believe this strategy is the most appropriate and meaningful way to integrate ESG considerations to our investment process. This strategy places the integration of ESG on the same level as other important key metrics that are considered when analysing sound companies to invest in.

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


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 

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

As shown above, Perennial collects ESG research from a range of sources including but not limited to internal fundamental research, extensive company meetings, public available sustainability and company reports, external ESG provides such as, CGI Glass Lewis. This research allows Perennial’s analysts to form their own view on each company and the ESG issues that may surround it and integrate this into the company’s valuation.

To promote quality research from the sell-side we discuss ESG issues with broking analysts so they are aware that we value their input. More formally, we include the quality of ESG research as part of our Broker panel analysis. Each broker is assessed during this analysis with these results used to allocate brokerage.

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

04.4. Describe how you incentivise brokers.

Brokers are incentivised to provide ESG research by two methods:

  1. An important factor in the Annual Broker review is the quality and amount of ESG research a broker provided over the previous year. This is a key factor in determining the percentage of brokerage that will be allocated to the broker over the upcoming year. Other factors that form the end rating include level of service, quality of company analysis etc.
  2. Brokers can also be incentivised and rewarded for quality ESG research by tagging them in trades. An example of when this may occur is if a broker was to provide a high quality report on ESG which may be company, sector or country specific.

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]


(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.

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

          Analyst conviction ratings.
        

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

ESG factors can be incorporated into the valuation tool through trend analysis, pricing fade and in analyst conviction ratings.

12.5. Additional information.


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