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Catella Fondförvaltning AB

PRI reporting framework 2019

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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

Description

We draw a clear line at companies that produce goods and services associated with harmful impacts on human health and the environment or that are addictive. This is consistent with our view that sustainable business creates value and competitive advantage over time.

1)      Controversial products; Tobacco, alcohol, gambeling, Pornography, weapons and coal

We exclude companies that produce tobacco, alcohol, gambling, pornography, weapons and coal, as these products are associated with harmful impacts on human health, are strongly addictive, or are associated with serious environmental impacts. The exclusion does not apply to service and distribution companies, as we believe these activities can be pursued in a responsible manner. Our focus is on the production of the controversial product or service. We have chosen not to consider third-party ownership because a financial investment is not categorised as production or distribution of the controversial product or service.

2)      Controversial secotors; Fossile fuels

3)      Norm Screening: The funds exclude companies that breach the 10 principles and 42 conventions of the UN Global Compact

We apply a zero tolerance threshold for the screenings above

Screened by

Description

Generally speaking, we look for companies that are both driven by sustainability and can demonstrate attractive financial qualities and a clear profit and return trend that is underestimated by the market. We use the UN 2030 Agenda for Sustainable Development as a basis for identifying business models that can benefit structurally by offering a solution to one or more of the 17 Agenda 2030 Goals. We have identified four themes that we believe are potential sources of structural growth and profitability for companies exposed to these themes. Last but not least, we study the extent to which company financial statements are affected by sustainability. We enhance our understanding of the long-term potential of the business model by integrating sustainability with financial analysis.

Screened by

Description

The funds exclude companies that breach the 10 principles and 42 conventions of the UN Global Compact (see appendix). Sustainalytics performs the assessment of whether the company is violating norms.

In our engagement strategy we prioritise dialogue concerning sustainability topics based on a couple of parameters.
• The company's performance in Catella Fonder’s E, S and G focus areas, where we focus on environmental policy, sustainable supply chains and efforts to prevent bribery and corruption.
• We use Sustainalytic’s research and examine the following parameters:
o Total ESG score - which provides an assessment of the company’s internal ESG work overall. We assess the company’s work, which we want to be on par with - or preferably above - its peer group. In this context, we pay particular attention to companies whose ESG scores are below 60.
o Level of controversy - which provides a degree of the company’s documented involvement in controversial ESG issues. We pay particular attention to companies at level 3 or above.

 

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

The screening criterias are set up initally to comply with our aims in the area and in dialoge with external supplyer to cover what we want. All our policys are reviewed yearly. We have not made any changes in the screening criterias and we have today no client with strict criterias where we have to inform about any possible changes.


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]

We are updated on changes on a continuing bases from our third party provider.


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


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