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Martin Currie Investment Management

PRI reporting framework 2018

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

(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

Any negative screening is driven by specific client requirements.  These operate on the basis of specific sector exclusions (directed by the client) which vary by client and can change over time depending on the requirements of the clients. The most common exclusions are no involvement in tobacco products, alcohol, cluster munitions, armaments, nuclear or contraception. The wording of client mandates varies but generally the exclusion will be based upon either the core activity of the company or a specific percentage of revenues. For these restrictions we operate a negative screening process to exclude companies from the investable universe according to these particular criteria.  Over and above this we take the same approach as all other unrestricted mandates - ESG factors and their consideration form a key part of our sustainability analysis. We incorporate these factors into our financial modeling and they form part of our engagement process with management.

04.2. 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.

The screening criteria are set by specific clients based on their needs and requirements.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

Any negative screening is driven by specific client requirements.  These operate on the basis of specific sector exclusions (directed by the client) which vary by client and can change over time depending on the requirements of the clients. The most common exclusions are no involvement in tobacco products, alcohol, armaments, nuclear or contraception. The wording of client mandates varies but generally the exclusion will be based upon either the core activity of the company or a specific percentage of sales. For these restrictions we operate a negative screening process to exclude companies from the investable universe based on these particular criteria.  In most cases external service providers are used to identify companies to be excluded / included.  These external providers offer the ability to set the detailed criteria in a manner suitable to each different client requirement.  These providers are subject to regular due diligence overseen by David Sheasby, Head of Stewardship and ESG.  This includes looking at the methodology for screening and the frequency of updates and reviews.  The processes in place are comprehensive, provide the opportunity for companies to correct any inaccuracies, are subject to audit, are overseen by an independent committee and are periodically reviewed for quality assurance purposes.

Where a client portfolio is subject to restrictions these are then coded into the portfolio management and dealing systems to ensure ongoing compliance with client requirements.  There is a daily feed to ensure that the universe exclusions remain consistent with client requirements.


LEI 06. Processes to ensure fund criteria are not breached (Private)


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