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Fulcrum Asset Management LLP

PRI reporting framework 2019

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

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
100 %
Total actively managed listed equities 200%

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

Across all our equity exposures we screen for companies with exposure to controversial weapons, tobacco and predatory lending in accordance with the Responsible Investment Policy. Exact limits can be provided on request.

For all our equity exposures we receive ESG risk data from Sustainalytics. This data is used to flag companies that do not manage their ESG risk well, controversies as well as other ESG metrics. This risk data is used in addition to traditional risk-metrics to inform our decision making.

In some cases, we use listed equities to implement sustainability themes e.g. clean energy. 

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

The screens are applied pre-trade and flagged up in our compliance system. ESG integration forms part of the investment process. 


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

Across all internal listed equity Fulcrum screen for investments in companies related to tobacco, controversial weapons and predatory lending in accordance with agreed screening limits. 

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

The latest version of the screening criteria can be found in the Responsible Investment Policy. 


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]

We receive external data from Sustainalytics as well as MSCI which, together, produces the screening lists. The companies on these lists are updated and reviewed quarterly by the Responsible Investment Officer as well as Compliance. In addition, the companies on the lists are reviewed by the investment team, when relevant, to validate or challenge the screening analysis.


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


(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

We are constantly reviewing investment opportunities for our portfolios and the opportunity set includes socially themed ideas. Thus far, however, our investment themes have been more environmentally focused. 


(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]

The research and analysis of E, S and G risks are all part of the investment process for our listed equity investments, and the extent to which it influences investment decisions varies by strategy. Governance does form a larger part of the due diligence. 


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]

For all our equity exposure we receive ESG risk data from Sustainalytics. We have reviewed their methodology and are confident their research is comprehensive. They allow companies to give feedback and the information is updated as it is made publicly available. We approach this data critically and use it in conjunction with our own research and analysis.


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


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