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Neumeier Poma Investment Counsel, LLC

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]

Environmental: screen to exclude investing in services and products with a heavy fossil fuel / co2 footprint. Bloomberg law documents for outstanding ESG lawsuits and complaints.

Social: 10K and corporate filings: analyze relationship with suppliers, customers and community. Review if any outstanding lawsuits and the nature of the dispute.

Governance: 10k and corporate filings to analyze executive salaries and stock holdings, gender data for executive positions, etc.


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]

We are small-cap value investors.  Stocks are selected for investment after meeting our rigorous criteria:  Compelling high quality companies; Stock trades at a discount; Identifiable growth catalysts; Screens positive environmental, social governance factors; Avoid investments including but not limited to fossil fuels, firearms, private prisons, animal testing, and unethical labor or lending practices.   Our valuation and financial criteria eliminates about 75% of the names in our small-cap universe.  Our research team's experience and knowledge eliminate additional names along with the ESG screening and analysis. 

Generally ESG review is a smaller part of our overall company analysis but it can vary depending on the company being analyzed and the industry it is involved in.  Climate change related risks and opportunities are analyzed.  We review company reports on corporate social responsibility and reports addressing energy efficiency and waste within the organization and supply and manufacturing chain. 

 


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

Proportion of actively managed listed equity exposed to investment analysis

10.3. Describe how you integrate ESG information into portfolio weighting.

ESG information is included in our small-cap value fundamental investment analysis.  Our portfolio is constructed of investments we find with the best overall value.

Our objective is to maximize upside and control downside.  While we exclude, through screening, certain industries in our stock selection process, we also may underweight or overweight certain sectors based on ESG risk. For example we may underweight fossil fuels because we find investing our money elsewhere gives us better returns. 

We look to see how organizations report on how they are addressing climate change risks within their business and the indicators we can follow to see their progress.

Research meetings are held weekly to discuss ideas and areas of investment.  In general we buy and hold stocks for long term. Economic factors like climate change or changes in government policies are taken into account when picking stocks. 

10.6. Additional information. [OPTIONAL]


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