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Perennial Value Management 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

A healthcare holding (“the company”) received a takeover offer from a smaller competitor. This bid was ultimately rejected by the company. Both Perennial and the Board of the company viewed the offer as too opportunistic and detrimental to shareholders, employees and patients. We had low conviction that a merged entity would deliver any material synergies. We were also concerned that senior management may have become distracted if the takeover went ahead, potentially affecting the quality of service delivered to patients. We engaged heavily with the board and we were impressed by their level of engagement and ensuring the takeover did not occur.  

ESG incorporation strategy applied Thematic

Impact on investment decision or performance

The experience was indicative of the company having a strong board and good governance. We increased our stake in the company on the back of this.

ESG factor and explanation

We engaged with a company with significant hydrocarbons operations to obtain insight into their emissions. The Managing Director did not have a figure for greenhouse gas emissions and appeared to not have any process in place to determine it.

ESG incorporation strategy applied Thematic

Impact on investment decision or performance

Chose not to invest in company.

ESG factor and explanation

We had discussions with a listed retailer over CY2018 in relation to their supply chain. The company has been active in ensuring a supply chain that is sustainable. From our discussions with management, we have learned about the retailer having Oeko-Tex certification and employing processes to review factories. This engagement has continued in CY2019, with the company flagging the plans and processes they have in place in relation to the Modern Slavery Act.

ESG incorporation strategy applied Thematic

Impact on investment decision or performance

Stock held in portfolio 

13.2. Additional information.[Optional]

These examples allowed us to make better informed investment decisions.


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