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Aeon Investment Management (Pty) Ltd

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

Description

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.

Screened by

Description

Each and every investment has its "hurdle rate" or required rate of return adjusted either positively or negatively for ESG factors. Our general knowledge of these principles and conventions alert us to ESG factors that may impact a specific company. Bloomberg data is also used to determine disclosure ratings.

Screened by

Description

Each and every investment has its "hurdle rate" or required rate of return adjusted either positively or negatively for ESG factors. Our general knowledge of these principles and conventions alert us to ESG factors that may impact a specific company. The criteria for each company is reviewed at least once a year or on an ad hoc basis.

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

Notifications to clients are communicated (e.g. via email and regular client report-backs) as and when the changes to the screening methodology are made.

 


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.

05.5. Additional information. [Optional]


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.

          An internal review is undertaken by the investment team to ensure that ESG is correctly integrated and the fund criteria is subsequently not breached.
        

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

In theory, in terms of our process, we should not find a company in our portfolio that has breached ESG norms. In the unlikely event that an ESG norm has been breached, we would investigate the breach, assesses the impact of the breach and its materiality. We would then apply the necessary remedial and risk-response plan and continually monitor the fund screening.

06.3. Additional information. [Optional]


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