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Saturna Capital

PRI reporting framework 2019

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ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. 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
97 %
Percentage of active listed equity to which no strategy is applied
3 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

Saturna Capital has been investing responsibly through a faith-based lens for 30 years, placing a primary emphasis on social and governance considerations. As responsible/sustainable investing has evolved, so has our approach: we view the consideration of environmental, social, and governance (ESG) factors as essential in forming portfolios of high-quality companies that are better positioned to reduce risk and identify opportunities. By examining material ESG factors in conjunction with overall financial performance metrics, we believe the added due diligence better serves the interest of clients by driving long-term performance.

Saturna Capital’s screening process excludes firms engaged in tobacco, alcohol, pornography, pork, and gambling. We positively screen for issuers with low environmental, social, and governance risk profiles – which, in addition to material and non-financial ESG considerations, includes firms that show management stability, low debt, strong balance sheets, high quality operations, and long-term focus.

Saturna’s Amana equity funds, Sustainable Bond and Sustainable Equity Funds support the divestment campaign by avoiding ownership of the largest hydrocarbon asset holding firms as identified by well recognized low carbon indexes

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


LEI 02. Type of ESG information used in investment decision (Private)


LEI 03. Information from engagement and/or voting used in investment decision-making (Private)


(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

Since the 1980s, we have used faith-based negative screens to eliminate prohibited securities engaged in alcohol, tobacco, gambling, pork processing and pornography.

Screened by

Description

Saturna applies an internally developed grading system based on ESG data from each company at the same time that it applies negative screens. This grading system was integrated into our process in 2015 and updated in 2018. 

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

Any changes made to the funds' screening or investment objectives is sent to clients via ADV and Prospectus updates. 


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]


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


(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]

Since inception in 1989, Saturna Capital has used negative screens to ensure that its Amana Funds' holdings are sharia compliant, and since 2015, we have looked to ESG data, as well.  We supplement our own work with data provided by Fact Set, Eikon, Bloomberg, and CSR Hub.


LEI 10. Aspects of analysis ESG information is integrated into (Private)


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