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Marathon Asset Management LLP

PRI reporting framework 2020

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 which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
100 %
Total actively managed listed equities 200%

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

Marathon's investment framework is focused on an assessment of the capital cycle, management and valuation. As a long-term investor, Marathon must critically assess issues of sustainability alongside a variety of other factors, in determining the quality of an investment. Indeed, it is arguable that Environmental, Social and Governance issues have a greater bearing on the long-term outcome than they do over the next 6-12 months, the average investor time-frame.

Marathon’s portfolio managers aim to consider all material issues and weigh them against what is reflected in the current market price of a stock. It is important to note that portfolio managers make the decision, integrating assessment of ESG within their overall analysis of a stock, rather than treating it as a stand-alone issue, or outsourcing to a separate team. A company with ESG concerns could still be an attractive investment, if the issues are outweighed by other considerations. After all, our fiduciary duty is to add value within clients’ agreed risk parameters. Consideration of ESG is one of a number of factors in this process.

With that said, Marathon's investment philosophy places particular importance on corporate governance issues, specifically through the detailed analysis of the behavioural aspects of management. Marathon's close and continuous engagement directly with investee companies helps to foster long-term relationships. Oversight of company management includes objective assessments and analysis of strategy, financial performance and capital planning alongside consideration of a range of applicable corporate governance issues. Similarly, when Marathon seeks to understand a company’s future strategy, consideration of material environmental and social issues will also be included. As part of this assessment, Marathon aims to observe how a company engages with environmental factors like climate change in order to assess the potential future risks to the business and management’s responsiveness to these issues. Companies that are not sustainable over the longer term are unlikely to pass muster.

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

Marathon has been utilising MSCI ESG Research services since June 2019, to provide in-depth research on individual stocks. 


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)


(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

All portfolio managers utilise MSCI ESG Research as part of their investment analysis. 


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 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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