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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


As at 31 December 2018, 11.2% of Schroders assets under management had ethical screening criteria. We apply a range of different negative or exclusionary screens across a number of segregated funds for institutional clients at Schroders Investment Management, as well as a number of private wealth clients and charity funds managed by our subsidiary, Cazenove Capital. Whether this is in the form of ethical screens based on a client-specific moral investment objectives (for example, the exclusion of tobacco or alcohol producers), or in response to national or regional legislation (such as the state responses to the US government's State Sponsors of Terrorism list).

We annually update our firm-wide Cluster Munitions exclusion list and statement to incorporate anti-personnel landmine manufacturers. This is publically available on our website

Screened by


Increasingly we have funds that are systematically identifying positive / best-in-class approach when looking at different ESG pillars and relative ESG performance. Their objective is to deliver funds with a strong sustainability profile as well as capable of generating investment returns.  The majority of screens are proprietorial, in particular those that look at ESG performance and countries.

This approach is applied across some segregated mandates as well as specific Schroder funds, including Global Climate Change Equity, Global Sustainable Growth, Sustainable Multi Factor Equity, QEP ESG, QEP ESG Fossil Fuel Free and Sustainable Convertible Bonds.  However all of the tools that are used are accessible to other investors across the equity team to enhance their own processes. 

Screened by

          US Global Sanctions List


We screen some client portfolios for exposure to historical controversies. We assess the company's response to date to ensure that it is adequate, and set clear objectives and future milestones to track progress. Those companies who have not addressed the underlying issues are excluded. We use a variety of data sources, including MSCI, Bloomberg and ERIS.

Some segregated funds exclude companies that have breached international norms such as the International Labour Organisation (ILO) conventions.

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

For a segregated mandate, we first speak to the client to understand their views and what they are trying to achieve. While negative screening is superficially simple, there are many ways to translate exclusion principles into the objective rules required for rigorous implementation. Differences in the specific exclusion criteria used for apparently similar exclusion policies can result in very different exclusion lists. We have written thought leadership on this topic (see, to ensure that all the impacts are well understood. 

Following our discussion with the client, our Sustainable Investment team will create the required screen using the input of various research providers. These exclusions are managed through Aladdin, our trading system, which codes and implements all exclusions across different client portfolios. These will be reviewed, on average, twice a year or in line with client agreements.  We have been consistent with the data sources used over time, which has led to relative stability of the lists.  Any breaches or errors and omissions are handled in line with our usual procedures and all of our processes are subject to periodic review by internal audit. 

In our experience, clients typically ask for the number of sectors to be excluded to increase.  As a result we may have an ongoing dialogue with them as their requirements change over time to help them implement these.  With regards to our cluster munitions and anti-personnel landmines exclusion list, the Sustainable Investment team undertakes an annual review, sourcing input from published lists, specialist research providers as well as our own internal research and feedback from engagement with companies. This list is reviewed and approved by asset class heads and published in our Annual Sustainable Investment report and on our website (see

Where our approach to implementing screens changes – for example because existing data sources become unavailable or new, better sources become available – we will engage the client (via the Client Directors responsible for that relationship) to ensures any changes are discussed and agreed, where appropriate.

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.

          Multiple data sources are used and compared

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]

Schroders primarily uses MSCI ESG Research, Eiris and Bloomberg for screening purposes. Schroders regularly reviews its research providers with the help of our quantitative equity team who have deep experience in such matters.

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