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Perpetual Investments

PRI reporting framework 2019

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


We negatively screen by:

  • Our Quality Filters (which apply to all the funds/products managed by our equities team) include ESG issues. The first of our Quality Filters, Sound Management, includes an assessment of the governance (G) practices of a company and management, including the Board.  The third of our quality filters, Quality of Business, includes an assessment of issues such as environmental (E) and social (S) factors that may impact the future performance of a company. Companies that fail our Quality Filters are not considered for investment.
  • In addition, a number of portfolios (see LEI 01.3) have additional screens to exclude a further set of companies that rate poorly on ethical/ESG issues.

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

Quality Filters

Our Quality Filters are the bedrock of our equities process and rarely if ever change.

Ethical SRI Fund and client 'Ethical' mandates

The Manager, Responsible Investment has formulated filtering processes for these portfolios to identify and exclude companies that rate poorly on ethical/ESG issues, drawing on external ESG research. The portfolio managers of these strategies are subsequently prohibited from buying these companies, and must divest any such companies that fail these screens that are already held.

The Manager, Responsible Investment is responsible for ensuring these filters are up-to-date (by design) and are regularly re-run (monthly) to capture new companies and new company or external research information.

Any criteria changes are processed through a defined internal approval process and communicated to clients as needed.

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.

05.5. Additional information. [Optional]

Please note, some of our responses above apply to the screening processes that apply to our specialist ESG screened strategies (Ethical SRI Fund and client 'Ethical' mandates) only.

The Quality Filters (including ESG) screening that applies across all equities strategies managed by the team is conducted based primarily on internal research. Our more intensive ESG research occurs through the ESG integration process described in this module, which applies to all stocks passing the Quality Filters.

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