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Loomis, Sayles & Company, L.P.

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(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


Screening is conducted in accordance with client-specific guidelines and/or the mandate of a given product.  We use vendors, such as MSCI, within our trading and compliance system to monitor activity related to a client's particular screening requirements.  We also have a number of clients that have asked us to manage to a 'restricted list'.

Screened by


Depending on the fund or client, different types of screening may be employed. For example, one client has requested that we follow its sustainability policy which requires first excluding worst-in-class issuers based on their rubric, along with collaboration with the Loomis Sayles portfolio manager on the team, and then selecting among the pool of resulting best-in-class issuers.

Screened by

          We are able and willing to manage to norms-based screening based on client requests.


We are increasingly in discussions with prospects about their interest in hiring us to manage a portfolio using norms-based screening, and with clients who wish to overlay one of our products with their choice of 'norms-based' screening.  The UN Global Compact Principles is a good example of norms-based screening that is under consideration for application with certain clients.

We also have several clients for whom we manage to a specific norms-based list, and we have clients for whom we manage to their norms-based ESG policy.

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

When changes are made that impact investment guidelines, such as modifications to screening criteria, we communicate that information directly to the client.

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.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

In 5.1: We selected "Companies are given the opportunity by you or your research provider to review ESG research on them and correct inaccuracies" because we understand that our ESG vendors attempt to vet analysis and ratings, and provide the issuers an opportunity to respond to analysis on a regular basis. 

In 5.2:  Our fundamental investment professionals incorporate the key, material factors that they believe will have impact on the performance of the securities that they own. We also supplement their work with external data vendors such as MSCI and Sustainalytics. We have found that there is a range of coverage by the external vendors.  For example, most of the large cap equities have ratings, while the smaller cap and emerging market stocks are not as well covered.  Because we are a large investor with holdings across a wide range of issuers, not all of our holdings are covered by the external vendors.

LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached.

          Portfolio specialists: spot check, CRD: pre-trade & batch compliance review, EY acts as internal auditors, parent company and regulators perform external audits.

06.2. If breaches of fund screening criteria are identified, describe the process followed to correct those breaches.

Consistent with its fiduciary duty, Loomis Sayles’ policy is to take the utmost care in making and implementing investment decisions for client accounts. To the extent that trade errors or investment guideline breaches occur, Loomis Sayles seeks to ensure that its clients’ best interests are served when correcting such errors and that the client will be reimbursed for any loss caused by our error. Loomis Sayles’ Trade Error and Investment Guideline Breach Policies and Procedures ("Procedures") guide the resolution of, and help to prevent the recurrence of, such errors.

If it appears that a trade error or investment guideline breach has occurred, Loomis Sayles will review all relevant facts and circumstances to determine an appropriate course of action. When it is determined that Loomis Sayles has caused or contributed to a trade error or investment guideline breach, the client will be reimbursed by Loomis Sayles for any net loss attributable to our error or will retain any net gain realized in connection with the error correction, except as described below. Clients are informed in writing of all errors unless the error is an operational error (e.g., overdraft charge for failed trades) involving a small reimbursement amount or the error is corrected pre-settlement.

If an error is discovered after the settlement of the transaction (thus having occurred in the client’s account), the “correcting” transactions will be executed in the client’s account and the client will either be reimbursed for the loss or will retain any gain realized in connection with the error correction as described above. However, if an error is discovered prior to the settlement of the transaction, the trade will be moved to the error account of the executing broker or Loomis Sayles’ error account and will not be reflected on the client’s account statement. In this latter circumstance, Loomis Sayles and the broker-dealer, custodian or other parties involved in the transaction (other than the client) will determine who among them is obligated to bear any loss or entitled to retain any gain realized in connection with the error correction. Additionally, securities purchased in error for one client’s account may be reallocated to another client’s account if Loomis Sayles determines that it would be appropriate to do so under the facts and circumstances. Such reallocations require the approval of the Chief Investment Officer and Chief Compliance Officer.

All trade errors or investment guideline breaches will be resolved with the approval of the Chief Compliance Officer and other legal/compliance, portfolio management, trading, or other personnel, as appropriate, in accordance with the Procedures. The party responsible for the trade error will complete the Trade Error Correction Form in an automated system implemented for this purpose, and submit the form to the Chief Compliance Officer for final approval as required by the Procedures. Such errors and their resolutions are reported to Loomis Sayles’ Risk Management Committee, Trading Oversight Committee and Audit Committee on a quarterly basis.

As a policy matter we do not provide outside parties with information regarding violations of client mandates unless the violation has been in their account.  

06.3. Additional information. [Optional]