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Mirae Asset Global Investments (HK)

PRI reporting framework 2020

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

ESG incorporation in actively managed listed equities

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%
100 %
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.

Our research analysts create ESG Scorecards for each company that they research.  These Scorecards are used in tandem with our Sustainable Competitiveness Scorecards, which help us rate a company’s investment potential.  Our analysts rate a company across 20 factors, on a scale of 1 to 5, that address a company’s governance and the social and environmental impacts of its business.  A 1 rating is the highest level of controversy/ poor track record and a 5 rating indicates no controversy/ excellent record. Ratings are then tabulated on our proprietary ESG Scorecards, which are an intricate part of a company's overall research rating.  The lower its ESG rating, the more likely it will be on either the Negative List or the Watch List.  ESG ratings from an external provider are included in the research process to complement our own analysts’ ratings.  In addition, our Investment Committee holds an annual session to update and review the ESG Negative and Watch Lists.

ESG Scorecards are created in tandem with our Sustainable Competitiveness Scorecards, and cover numerous factors that address a company’s corporate governance and the social and environmental impacts of its business.

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


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

Our proprietary ESG Scorecard allows us to rate a company’s ESG strength based on 20 wide-ranging factors and on a scale of 1 to 5.  The factors address a company’s governance and the social and environmental impacts of its business, with a ‘1’ rating indicating the highest level of controversy/ poor track record and a ‘5’ rating indicating no controversy/ excellent record.  Thus, a poorly-scoring company can be easily screened out from our investment universe.

Screened by

Description

Our proprietary ESG Scorecard allows us to rate a company’s ESG strength based on 20 wide-ranging factors and on a scale of 1 to 5.  The factors address a company’s governance and the social and environmental impacts of its business, with a ‘1’ rating indicating the highest level of controversy/ poor track record and a ‘5’ rating indicating no controversy/ excellent record.  Thus, a high-scoring company can be easily included in our investment universe.

Screened by

          A combination of norms., including the Convention on Cluster Munitions.
        

Description

While we do not utilize any specific norms-based screening process, our current process takes many of the principles inherent within the aforementioned norms into account.

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

The 20 factors that comprise our ESG Scorecard were established by the Investment Committee after carefully reviewing several norms and global market best practice.  These criteria are relatively static, but are nevertheless reviewed annually to ensure consistency with global conditions and prevalent standards.  Clients are notified automatically of any changes.


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]


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


(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]


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.

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

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

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

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.

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

The purpose of incorporating ESG principles into our research process is ultimately to reflect these principles in client portfolios.  Portfolio managers utilize our ESG Scorecards in tandem with our Sustainability Scorecards to ensure that we invest in companies with long-term, sustainable business models, good governance structures and sound social and environmental policies.

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

Our research efforts focus on finding companies with long-term, sustainable business models.  Thus, any company with low to medium ESG scores might be perceived as having short-term goals, which might ultimately impact long-term growth forecasts.  This would change estimates for earnings growth and ROE.

10.6. Additional information. [OPTIONAL]


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