This report shows public data only. Is this your organisation? If so, login here to view your full report.

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 » (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]

In 2019, we undertook extensive research on tools that we could utilise to incorporate quantitative environmental analysis on South African listed equities. We utilised several quantitative tools such as The Paris Agreement Capital Transition Assessment (“PACTA”) tool, The Transition Pathway Initiative (“TPI”), 2 Degrees Scenario Analysis etc. It should be noted that these PRI-recommended tools do however have limitations. Aeon Investment Management is mainly invested in South African stocks. The recommended tools do not cover a significant number of companies operating in developing markets e.g. South African-based companies and thus we are only able to obtain a limited amount of information on the analysis of these companies. Companies also only disclose a limited amount of environmental metrics to the public thus further increasing the limitations to the analysis. Aeon Investment Management has raised these issues with the research providers.

South Africa's case study for ESG is fairly unique due to its Apartheid history which has resulted in significant socio-economic inequality. We recognise and factor in environmental factors into our fundamental analysis however it should be noted that social and inequality factors from a race and gender perspective have far higher priorities and/or weighting than environmental issues. in our portfolios.

 


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

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.

Each and every investment case has its "hurdle rate" or required rate of return adjusted either positively or negatively for the company-specific ESG factors. Our general knowledge of these principles and conventions alert us to ESG factors that may impact a specific company. 

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

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.

10.5. Describe how you apply sensitivity and /or scenario analysis to security valuations.

Aeon Investment Management has just recently incorporated scenario analysis and/or modelling into its investment philosophy to analyse current and potential ESG risk factors, evaluate the fund's exposure in comparison to the market, and to test the fund's performance and position under transition scenarios.


We have recently started utilising several quantitative tools such as The Paris Agreement Capital Transition Assessment (“PACTA”) tool, The Transition Pathway Initiative (“TPI”), 2 Degrees Scenario Analysis etc. It should be noted that these PRI-recommended tools do however have limitations. Aeon Investment Management is mainly invested in South African stocks. The recommended tools do not cover a significant number of companies in developing markets e.g. South African-based companies and thus we are only able to obtain a limited amount of information on the analysis of these companies. Companies also only disclose a limited amount of environmental metrics to the public thus further increasing the limitations to the analysis. Aeon Investment Management has raised these issues with the research providers.

10.6. Additional information. [OPTIONAL]


Top