Aeon Investment Management takes a broad approach to the screening of internally managed active listed equities; we do not conduct any negative screening. A number of ESG factors, as relevant to these holdings, are analysed; current and potential ESG risks are also considered when conducting an initial and ongoing analysis.
Lack of trust in the board of directors is a fundamental driver of the exclusion of companies. This, however, is a judgemental assessment as opposed to a quantitative scoring assessment.
Negative screening applied as the sole method of ESG integration is not effective. Relevant and continuous engagement with company management teams on their ESG risks allows investors to have a better understanding of companies, raises awareness of risks that company management teams had not considered and allows for a more holistic approach to ESG integration in investment philosophies.