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Westfield Capital Management

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%
99.98 %
Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
0.02 %
Total actively managed listed equities 100%

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

Westfield’s integration of ESG factors into the investment approach in our traditional Investment Committee managed growth equity strategies is focused on the materiality and relevancy of various ESG factors to each sector and specific company, and how they may affect valuation, risk and the confidence of the investment thesis. This integration only approach relies upon the deep industry expertise of our sector-focused analysts, coupled with the ESG focus of the Director of ESG Research, to identify and incorporate material ESG factors into our fundamental analysis. Relevant and material ESG issues are identified through management dialogue, the collection and analysis of third party ESG data, and frameworks such as SASB’s (Sustainability Accounting Standards Board) Materiality Maps. A focus on quality management has always been core to Westfield’s investment process and we believe that analyzing material ESG factors, whether they are associated with the end markets served or a company’s operating activities, can provide additional insight into management quality.

 

ESG incorporation goes one step further in Westfield's Sustainable Growth Equity strategy managed by our Director of ESG Research.  Within this strategy, best-in-class positive screening and thematic ESG integration are also utilized in the construction of client portfolios.

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

Within the Sustainable Growth Equity strategy, the Director of ESG Research takes a multi-faceted approach to ESG integration in the management of client portfolios by overlaying ESG analysis on fundamental analysis to create a concentrated portfolio of companies that embed sustainability into their business strategy.  ESG incorporation within the strategy falls into three investment categories:

  • Companies that provide products or services that directly target sustainability driven end markets
  • Companies that provide products or services that have derivative sustainability benefits
  • Companies that are best-in-class in ESG operating performance

 

 


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

The Director of ESG Research utilizes the following external resources to support his ESG research efforts:

  • Bloomberg ESG data – rankings and ratings for various ESG factors
  • Responsible Investor – online ESG and sustainable finance resource

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

Screening is used as an additional data point in the investment decision making process.  Westfield does not mandate general rankings or scores on any financial factors for our current or prospective portfolio holdings as we rely on our seasoned investment professionals to conduct fundamental research within their respective areas of expertise. Similarly, the Director of ESG Research does not seek to invest in companies that simply reach a certain ESG score as defined by a third party service provider; rather, he often meets with a company’s Chief Sustainability Officer (CSO), or other members of the company management, to determine how they are embedding ESG efforts into their business strategy.  Westfield’s ESG research does not stop at figuring out why a company is incorporating ESG factors into their business model; rather, we take the next step by asking questions about and focusing on the economic impacts of sustainability initiatives and how these issues will impact the company’s growth prospects and bottom line.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG 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)


(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

Westfield's sustainability themed fund is the Sustainable Growth Equity strategy.  This strategy is managed by the Director of ESG Research who leverages the in-depth, fundamental research of Westfield's sector analysts in the management of client portfolios.  The strategy takes a multi-faceted approach to ESG integration by overlaying ESG analysis on fundamental analysis to create a concentrated portfolio of companies that embed sustainability into their business strategy.  ESG incorporation within the strategy falls into three investment categories:

  • Companies that provide products or services that directly target sustainability driven end markets
  • Companies that provide products or services that have derivative sustainability benefits
  • Companies that are best-in-class in ESG operating performance

(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]

Westfield’s review of ESG issues in the investment research process is focused on the materiality and relevancy of these ESG issues to each sector and specific company, and how they may affect valuation, risk and the confidence of the investment thesis. We rely upon the deep industry expertise of our sector-focused analysts, coupled with the ESG focus of the Director of ESG Research, to identify and evaluate material ESG issues during our fundamental analysis. Relevant and material ESG issues are identified through management dialogue, the collection and analysis of third party ESG data, and frameworks such as SASB’s (Sustainability Accounting Standards Board) Materiality Maps. A focus on quality management has always been core to Westfield’s investment process and we put particular emphasis on the systematic review and understanding of all material corporate governance concerns.


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.

09.5. 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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