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Pendal

PRI reporting framework 2019

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ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation undertakes scenario analysis and/or modelling and provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe We continued to enhance our Asset Allocation process to advance how we incorporate ESG factors as one of the secular themes providing qualitative insights that inform the capital markets assumptions within the overall Diversified Strategies investment decision framework in order to further enhance the product.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

We also conduct scenario analysis based on "financial" risk factors (including market & liquidity risk). Currently we are reviewing how we can extend the scope to climate-related scenarios. 

 


SG 13 CC.


SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

Strategies:

  • Exclusion screening: we have been managing 'low-carbon' investment strategies since 2014. Our dedicated sustainable funds have a thermal coal and oil sands exclusion framework.
  • Best of Sector / Sustainability ratings: we actively tilt holdings towards leading sectors such as renewable energy and green tech. 

Asset classes:

  • Through our Sustainable Australian Fixed Income strategy Pendal targets an active overweight exposure to Green and Climate Bond holdings. A number of our "mainstream" portfolios also now invest in these Green and Climate Bond securities.

Other:

  • Our multi-asset team has incorporated climate related factors in their secular themes taxonomy that feeds into the strategic AA framework.
  • We measure client portfolio carbon intensity and make this information available to clients, including for use in their own reporting. This also enables us to undertake internal benchmarking, for instance the carbon intensity of our low carbon (fossil fuel free) Australian share strategy, launched during 2018, is 30 per cent below benchmark for the index as a whole.
  • In addition, in collaboration with Regnan (previously part owner, board member, wholly owned since Feb 2019), in 2018 we enhanced our internal climate-related portfolio risk management framework.

 

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

We use MSCI's Carbon Metrics and Research platform.

14.5. Additional information [Optional]


SG 14 CC.


SG 15. Allocation of assets to environmental and social themed areas (Private)


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