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Kinetic

PRI reporting framework 2019

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (C) Implementation: Integration of ESG factors

(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the ESG factors you systematically research as part of your investment analysis and the proportion of actively managed listed equity portfolios that is impacted by this analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on a robust analysis.

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

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information.[Optional]


LEI 10. Aspects of analysis ESG information is integrated into

New selection options have been added to this indicator. Please review your prefilled responses carefully.

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

10.3. Describe how you integrate ESG information into portfolio weighting.

ESG issues are considered in the course of the fundamental research we undertake on all companies - whether owned or not owned in the portfolio.  ESG issues can impact our portfolio weighting decision, for example we may reduce the target weight of a particular stock should it still be considered attractive if there is particular ESG factor that is of concern and quantifiable. 

Where an ESG issue is not quantifiable then the company will be excluded from the portfolio.  

 

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

Within our models we assess the earnings and cost drivers and make adjustments accordingly. 

Example: A company producing a carbon emitting commodity

We assess the long term revenue drivers of the company.  This would include taking into account the long term demand as a function of the world changing to less carbon emitting commodities and the impact this will have on revenue.  We would also include our forecasted price for coal for example, and where relevant this would also impact revenue.  Where appropriate we would also include the cost of site remediation.  These factors are included within our model and thus directly impact our valuation of the company.

 

10.6. Additional information. [OPTIONAL]


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