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Solaris Investment Management Limited

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes


LEI 01. Percentage of each incorporation strategy

01.1. 以下を記載してください。(1)組織でのアクティブ運用上場株式にどのESG組み入れ戦略や組み合わせを使用しているか(2)アクティブ運用している上場株式の戦略または戦略の組み合わせ別内訳

ESG組み入れ戦略 (当てはまるものをすべてお選びください)
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 5%)
100 %
アクティブ運用している上場株式の合計 100.5%

01.2. 組織が実施しているESG組み入れアプローチ、および、特定のESG組み入れ戦略を選択している場合はその理由を説明してください。

Our primary reason for choosing screening and integration strategies in relation to ESG factors is that it complements our process and is not seen as an add on, but simply part of our every day process.

Solaris utilises material ESG factors in the same way that our analysts will utilise any material information relevant to a company's operations and therefore valuation.

In the same way that certain factors may render a stock non-investment grade, so too may ESG factors.  In some instances we may screen stocks from our investable universe at our initial risk screening stage due to ESG impacts.

As we treat ESG factors as additional pieces of a company's profile, it follows that our analysts also consider ESG factors within our Qualitative assessment stage. 

The evaluation of ESG issues is undertaken by the analyst responsible for the company. Analyst empowerment is an important feature of the Solaris investment process. Every company in the S&P/ASX200 is covered by a dedicated analyst and the decision to include or exclude that company in Solaris’ investment portfolios is predominantly the decision of that analyst. ESG evaluation forms part of the analysts’ overall assessment of that company. It is important to emphasize that this is not a new aspect of the analyst role. All current analysts have, in their past, had to make ESG evaluations. Solaris also employ an ESG Analyst who provides the analysts with additional information and research capacity where required.

ESG factors are considered at two stages within the Solaris Investment process:

  • The initial risk screening stage where Liquidity, Financial, Geo-political, ESG and Litigation risks are assessed. Stocks that fail to pass any of these risk screens are considered non-investment grade and are not included in the Solaris universe.
  • Qualitative assessment stage – The criteria examined by our analysts include:
    1. Management
    2. Business Model
    3. ESG factors
    4. Balance Sheet
    5. Cash Flow profile
    6. Trend in Return on Equity

The conclusions drawn by analysts from their qualitative assessment feeds into the appropriate rating applied to each company’s valuation. For the most commonly used valuation technique: DCF, this involves adjusting the beta to incorporate positive or negative factors discovered in the qualitative assessment. Accordingly, conclusions drawn from the assessment of a company’s ESG activities may affect that company’s rating and its valuation.

The main portfolio construction technique that Solaris use is based on expected return. Simply put, if a company has a high expected return that company will, prima facie, be included in the portfolio and equally a low expected return (or negative excess return) will see a company not held in the Solaris portfolios. It follows, therefore, that a poor ESG evaluation may result in the company’s valuation being marked down and reducing the company’s chances of being included in a Solaris portfolio.  Conversely a positive ESG evaluation may result in the company’s valuation being upgraded and increase its chances of being included in the portfolio.

In addition Solaris manages three negatively screened portfolios under Individual Mandate agreements (IMAs) where the clients require certain stocks that derive a percentage of their revenues from certain activities to be excluded from consideration for investment.  In practicality, these exclusions are considered in the Initial Risk Screening stage and the stocks are excluded from the client's investable universe.

01.3. ESG組み入れ戦略の組み合わせを使用して資産を運用している場合、ESG戦略の組み合わせをどのように使用しているかを簡単に説明してください。 [任意]

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) 実施:スクリーニング

LEI 04. Types of screening applied

04.1. 組織内でアクティブ運用している上場株式に適用するスクリーニングの種類を記載し、説明してください。




Solaris commenced management of one negatively screened client portfolio during 2016, another negatively screened portfolio in 2017 and another in 2019.  Those mandates require that stocks are screened based on products, activities and sectors.

All portfolios participate in the Solaris process where active discussion is held around country / geopolitical risks.  Where Solaris feels that these risks are too great we may choose to avoid (or screen out) companies with material exposure to those countries.  Similarly companies may exhibit behaviours that are assessed as untenable in terms of investment risk.  For example (this list is not exhaustive):

  • legacy issues relating to pollution or remediation issues
  • inappropriate labour use within the supply chain.
  • insufficient governance controls or evidence of poor governance leading to other concerns within the company - eg safety failures, exposure to corrupt practices

Companies are assessed on a case by case basis and to date we have excluded a number of stocks on the basis of these concerns.




Companies that operate in countries or geographic regions that exhibit greater levels of transparency and good governance are typically exposed to less operational risk.

Companies that exhibit leading corporate governance procedures typically have exhibited better risk management strategies and have demonstrated a greater understanding of the challenges and opportunities facing the company. 

These companies are typically afforded a governance premium within our valuation assessments.

04.2. スクリーニング基準が変更された場合に顧客や受益者に通知する方法について説明してください。

The Solaris screening criteria was formulated as part of our Initial Risk Screening Stage which has been in place for over 16 years.  The Initial Risk Screening Stage (of which the ESG screen forms part) is under constant review as an integral part of our investment process.

It is important to Solaris that this remains a fluid process as we review and reflect on the relevance of screens in a rapidly changing world.  This process is an internal one and as such has not been communicated to the public to date.

The screening criteria for the negatively screened portfolios is determined by the clients' Individual Mandate Agreements (IMAs).  The data for the negatively screened portfolio is reviewed and reflected in the database at least quarterly.  A dialogue is required to occur between Solaris management and the clients' representatives to make any alterations to the IMAs.

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

05.1. スクリーニングが徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを選択してください。

05.2. ESGスクリーニング戦略の一環で包括的なESG調査の対象となるアクティブ上場株式ポートフォリオの割合を示してください。

05.3. 第三者のESG評価がスクリーニング目的で更新される頻度を示してください。

05.4. 組織のESGスクリーニングを構築するための組織内リサーチを精査する頻度を示してください。

05.5. 補足情報 [任意]

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

C) 実施: 統合

LEI 08. Review ESG issues while researching companies/sectors

08.1. E・S・Gの各要因が投資分析の一環として体系的に調査されている、アクティブ運用の上場株式ポートフォリオの割合を記載してください。








08.2. 補足情報 [任意]

LEI 09. Processes to ensure integration is based on robust analysis

09.1. ESG統合が徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを記載してください。

09.2. 組織の統合戦略の一環で包括的ESG調査の対象になるアクティブ運用上場株式の割合を記載してください。

09.3. ESG統合戦略に使われる第三者のESG評価が更新される頻度を示してください。

09.5. ポートフォリオ・マネージャーがどのようにしてESG情報を保有し、使っているのか説明してください。

09.6. 補足情報 [任意]

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