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Janus Capital Management LLC

PRI reporting framework 2017

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

ESG incorporation in actively managed listed equities

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
95 %
Percentage of active listed equity to which the strategy is applied
5 %
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.

Approach to ESG incorporation:

Janus Capital Management is a fundamental investment manager with an intensive, bottom-up investment process, focused on maximizing long-term returns while minimizing risk. We understand Environmental, Social and Governance (ESG) factors as critical externalities which impact the long-term viability and value of a business. Many of these factors elevate the importance of proper corporate governance and mark the difference between management teams who are willing to think long-term and those more interested in short-term profit optimization at the expense of the future viability of the business.

At Janus, we practice a bottom-up approach to research which seeks to deeply understand both the company and the ecosystem within which they operate. In addition to rigorous modeling and competitive analysis, we consider externalities such as ESG as a significant part of our research process. Often times, environmental, social or governance concerns uncovered by our research serves to remove a company from investment consideration.

Reason for choosing integration alone as our ESG strategy:

Janus has always viewed understanding ESG issues as an important part of our fundamental research process (although we didn't call it ESG); which is why it remains embedded in the fundamental research of our analyst teams.  Our implementation of ESG requires that we consider these factors; however, we choose not to restrict our investable universe by excluding investments that do not meet certain criteria.  Even companies with poor ESG profiles can offer compelling investment opportunities, in certain circumstances.

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

We implement ESG integration on behalf of all equity funds; although some clients ask us to restrict certain investments.  These are the only instances where we use a combination of ESG incorporation strategies.


LEI 04. Type of ESG information used in investment decision (Private)


LEI 05. Information from engagement and/or voting used in investment decision-making (Not Completed)


(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

Negative/exclusionary screening is only done in response to client requests.

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.

Negative/exclusionary screening is only done in response to client requests.


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.

          Negative/exclusionary screening is only done in response to client requests.
        

07.2. Additional information. [Optional]


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


(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.

12.3. Describe how you integrate ESG information into portfolio construction

We do not have a consistent way this is handled in portfolio construction; although these factors are considered by all PMs.

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

Varies widely, depending on the issue/magnitude/company/sector/geography...etc

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

Varies widely, depending on the issue/magnitude/company/sector/geography...etc

12.5. Additional information.


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