Our screening includes UN Global Compact compliance, and assessment of material (ESG) controversies, and an assessment of ESG risks. We have limits on the controversy level and the absolute level of risk we find acceptable for individual securities, and we additionally have portfolio-level requirements on the level of ESG risk we find acceptable.
ESG integration includes an evaluation of the ESG-risk score from our external ESG research provider, as well as the core activities of the company. On the basis of this, we can adjust the risk profile and evaluation of the potential investment.
We believe that adequate screening will reduce the so-called "tail risk" in our equity selections. We further use ESG risks assessment to adjust our valuation of selected listed equities.