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Pengana Capital Group

PRI reporting framework 2017

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

Specifically, Hunter Hall's ‘negative screen’ seeks to avoid investment in companies that derive operating revenues from direct and material business involvement in –

  • the manufacture or sale of weapons and weapons components
  • tobacco manufacture
  • gambling outlets or systems
  • intensive animal farming
  • animal testing for cosmetics
  • activities that give rise to human rights violations
  • unremediated destruction of the environment
  • uranium mining and nuclear reactors
  • fossil fuel exploration, production, refining, storage and transporation

 

Screened by

Description

Hunter Hall's positively screened fund, the Global Deep Green Trust (GDG) invests in companies that are deemed to contribute positively to environmental, humanitarian, social and sustainability issues. The GDG invests globally in activities such as:

  • renewable energy from solar, wind, waves, geothermal, biomass, advances in battery, storage and transmission technologies and efficiency gains
  • technologies and products which reduce environmental damage such as hybrid automobile engines, water purification and desalination, waste management and advanced materials
  • medical services and devices, biotechnology, pharmaceuticals and veterinary care
  • education and communications
  • animal husbandry, aquaculture, fisheries, forestry and agriculture conducted in an environmentally sustainable and humane way
  • activities and instruments involved in microfinance, water management, biodiversity credits, carbon credits, intellectual property related to DNA

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.

Hnter Hall's flagship fund was established 23 years ago and the Manager's ethical investment policy has evolved and been refined over the last 16 years. The negative screen has remained relatively consistent with the last major changes being the introduction of a traffic light system in 2010 and the implemenation of a fossil fuel screen in 2014.

The positively screened fund was launched in 2007 which lead to the addition of the positive screen.

Any change requires board approval and clients are notified via an update to the website, email or direct mail.


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.

          Portfolio Managers/Analysts conduct their own comprehensive research as part of their fundamental analysis to determine companies' activities and products, including compliance with ethical policy.
        

07.2. Additional information. [Optional]

Portfolio Managers and Analysts conduct their own research as part of their fundamental analysis of potential and existing investments.

Further, Hunter Hall has appointed Australian SRI/ESG research provider CAER (Corporate Analysis, Enhanced Responsibility) to conduct an annual audit of all investments that have been added to the portfolio and not previously been reviewed externally. This is to ensure that no potential issues have been overlooked by the investment team members in their fundamental analysis of investee companies.

The basis for the evaluation is Hunter Hall's ethical screening policy, and the outcome of the review is a report highlighting investments which may not be compliant with the ethical investment policy. The report is considered by the investment team in consultation with the SRI Analyst and follow-up analysis of possible non-compliant investments may be undertaken. Hunter Hall has final discretion on whether or not to divest non-compliant investments. 

On occasion, Hunter Hall may choose to engage with an investee company, rather than divest, as a better way to effect change.

Through CAER 's network Hunter Hall has access to research from EIRIS on many of our international investments.


LEI 08. Processes to ensure fund criteria are not breached (Private)


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