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Element Investment Managers

PRI reporting framework 2019

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Innovation

SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

Our approach to Responsible Investment is reviewed continually and has been enhanced and developed over time based on our own experience and learning from the experience (both SA and internationally) of others. We do not have, nor have ever had, a 'one size fits all' approach as we believe RI and Engagement with companies/principals evolves and is refined with experience. We take into account relevance and materiality for ESG integration - possibly the most critical lesson from experience. An analyst that covers a sector initially takes the decisions and completes the Financial and ESG analysis and the Investment Committee report . In our opinion, Element's competitive advantage, is that we have one investment team that is responsible for the analysis of multi-asset classes and ESG analysis - so cross-pollination of company knowledge is immediate and not confined to separate team "silos". We do not have a separate sustainability team that attempts to persuade analysts and portfolio managers that an ESG factor is material. Materiality of ESG issues is discussed and reviewed within our Investment Committee - a critical factor as it is our experience that a combined team approach allows us to focus on the relevant and material factors only.  In our opinion, these are the factors that will induce management/principals to effect change. By way of contrast, engaging on non-material factors, in our experience, merely seves to irritate management/principals.and lead to no changes in behaviour - something that is often overlooked by an ESG-only team that is not integrated into the investment team.


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