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Veritas Investment Management

PRI reporting framework 2019

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ESG incorporation in actively managed listed equities

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.

Our investment philosophy and style are founded on the principle of real return investing, thereby aligning with what our clients are seeking to achieve: to protect and grow the purchasing power of their capital over the long term.  We consider risk as the potential for permanent capital loss. 

Responsible investment is not a separate ‘nice to have’ investment approach at Veritas: it is fundamentally and instinctively what we do in our investment approach.  It is just common sense to us to incorporate all relevant factors into our investment decisions, to better manage long term risks and identify drivers of success to generate sustainable, long-term returns for our clients.

Our investment process focuses on identifying companies with sustainable business models and cash flow generation and therefore involved a combination of: 

  • identifying companies which stand to benefit from the opportunities created by global, structural changes, such as the scarcity of resources, transition to a digital economy and increasing global environmental regulation;
  • incorporating ESG factors, such as corporate governance, into our qualitative and quantitive analysis; and,
  • screening companies against international standards, and excluding companies which are not taking a sustainable approach to managing long-term ESG risks.

 

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


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

As responsible investment is central to our investment process, none of our screens are used in isolation. They form a key and integral part of our qualitative and quantitive stock analysis. The aim of all our screening is to identify ESG risks and drivers of success which would affect the long-term sustainability of a business. As examples, some of the factors we consider are board culture and independence, diversity and remuneration, exposure to fossil fuel-intensive business practices, supply chain practices and corporate disclosure.

Screened by

Description

Before an investment is made, companies are screened against the UN Global Compact Principles and the ILO Conventions to identify any areas of risk. Investment managers incorporate the results of these screens into the overall assessment of the company. Existing portfolio holdings are screened on a quarterly basis for ongoing compliance with these principles. 

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

Any changes to our investment process would be communicated to clients in person during meetings, or through our quarterly written communications. 


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]


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


(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]


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.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information.[Optional]


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


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