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Afena Capital (Pty) Limited

PRI reporting framework 2019

You are in Direct - Listed Equity Incorporation » Outputs and outcomes

Outputs and outcomes

LEI 12. How ESG incorporation has influenced portfolio composition

12.1. Indicate how your ESG incorporation strategies have influenced the composition of your portfolio(s) or investment universe.

Select which of these effects followed your ESG integration:

12.2. Additional information.[Optional]


LEI 13. Examples of ESG issues that affected your investment view / performance

13.1. Provide examples of ESG issues that affected your investment view and/or performance during the reporting year.

ESG factor and explanation

On 31 May 2018 we engaged with BHP Billiton executives Ms. Fiona Wild (Vice President, Climate Change and Sustainability), Mr. James Upton (Head of ESG Policy and Engagement -Group Governance) and Ms. Elisa Morniroli (Investor Relations).
 Climate change and the group’s emissions targets. BHP is targeting flat emissions, in absolute terms, off the group’s 2006 levels. Thermal coal which produces the bulk of the emissions remains a key Tier 1 asset to BHP. While management has no intention to divest from these assets, they remain resolute on finding ways to reduce its carbon footprint.
 

ESG incorporation strategy applied

Impact on investment decision or performance

ESG factor and explanation

Environmental impacts of its water usage. The company has also started a water stewardship program and is expected to publish a report in September 2018 highlighting its understanding of the risks and impacts surrounding this valuable resource.  

ESG incorporation strategy applied

Impact on investment decision or performance

ESG factor and explanation

Governance concerns surrounding BHP’s handling of various sponsorships around the 2008 Beijing Olympics. The actions of the firm could have been perceived as attempts to bribe certain parties. Management acknowledged that record keeping could have been managed a lot better and has as a consequence, paid a $25m fine to the authorities related to this.

ESG incorporation strategy applied

Impact on investment decision or performance

ESG factor and explanation

Other matters addressed in the meeting included steps to prevent future disasters like Samarco; issues related to certain components of its remuneration policies; the impacts of proposed mine closures and the risks around investing in more challenging countries like Ecuador.

ESG incorporation strategy applied

Impact on investment decision or performance

Reduction in valuation

13.2. Additional information.[Optional]


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