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Local Pensions Partnership

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (C) Implementation: Integration of ESG factors

(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]

A systematic review of Environmental, Social and Governance issues is routinely undertaken as part of the due diligence which precedes a final decision being made on whether to add a new stock to the internally managed portfolio. For externally managed funds, monitoring of ESG characteristics takes place quarterly.


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.

          Material risks identified as part ESG research are evaluated and presented within the papers which support and inform investment decision-making.
        

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

New selection options have been added to this indicator. Please review your prefilled responses carefully.

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis.

10.4. Describe the methods you have used to adjust the income forecast/valuation tool.

ESG information is routinely incorporated into LPPI's fundamental analysis and in this way it influences our view of the fair value of all stocks within the internally managed portfolio.

When we undertake analysis our research of all factors (including ESG) is focussed on helping us to form a view on current and future key value drivers, including:

  • the quantum of future cash flows;
  • the timing of these cash flows;
  • the appropriate discount rate.

LPPI evaluates material matters for individual companies case by case .  Any concerns we identify (for example around governance) will influence the discount rate we consider appropriate and directly impact our view of fair value.

 

10.6. Additional information. [OPTIONAL]


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