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Aeon Investment Management (Pty) Ltd

PRI reporting framework 2020

You are in Strategy and Governance » Objectives and strategies

Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

Our objectives and strategies are reviewed regularly; if changes are warranted, we would make them as and when required.


SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          On the job training in analysis and practical experience in the identification of ESG drivers.Integration of ESG factors in decision-making.
        

Progress achieved

Aeon Investment Management is constantly trying to improve its techniques in incorporating ESG through on-the-job training. Analysts and Portfolio Managers regularly attend ESG training physically and via webcast.

Key performance indicator

          ESG Engagement with investee entities - quality, outcome and impact of engagement.
        

Progress achieved

In the past year, Aeon Investment Management participated in a number of engagements. In the current reporting period in question, we focused more on quality than quantity - we participated and initiated engagements that we believe addressed or at the very least created awareness of ESG factors.

Key performance indicator

          Completeness, timely reporting and assessment of ESG activities.
        

Progress achieved

Aeon Investment Management continues to record and report on ESG activities in a timely method.

 

Key performance indicator

          ESG Engagement with investee entities - quality, outcome and impact of engagement.
        

Progress achieved

In the past year, Aeon Investment Management participated in a number of engagements. We focused more on quality than quantity - we participated and initiated engagements that we believer addressed or at the very at least created awareness of ESG factors.

Key performance indicator

          Financial performance of investments (change in the price of shares in investee entities); Monitoring of ESG activities
        

Progress achieved

In the past year, Aeon Investment Management has updated its ESG incorporation into investment decision by incorporating more qualntitative ESG tools into the investment philosophy.

Financial performance of investments

Key performance indicator

          A financial and judgemental assessment of investment decisions is undertaken  to determine impact of ESG incorporation
        

Progress achieved

Aeon Investment Management's integration of ESG factors into their investment philosophy has had a significant contribution in helping Aeon steer clear of high ESG-risk investments such as EOH Ltd and Tongaat Hulett Ltd.

ESG characteristics of investments

Key performance indicator

          Overall Financial Performance; Share price movements
        

Progress achieved

Adjusting hurdle rates either for positive or negative ESG factors has a significant impact on the earnings growth expectations implied by the current share price.  Significant progress has been achieved. Portfolio ESG analytics indicates a better ESG disclosure and trend position.

Key performance indicator

          Bloomberg's disclosure score on ESG is used to assess the year-on-year impact.
        

Progress achieved

Significant progress has been achieved. Portfolio ESG analytics indicates a better ESG disclosure and trend position. Aeon Investment Management is currently in the process of developing and subsequently refining an in-house ESG Scorecard model by incorporating publicly available quantitative tools.

Key performance indicator

          Investee entities' carbon emissions (if disclosed) and Portfolio exposure to carbon-emitting companies (depending on whether the database is updated).
        

Progress achieved

It is too early, in a developing economy, to assess the impact; however, Aeon Investment Management is in the process of developing and subsequently refining an in-house ESG Scorecard model. We have also recently incorporated climate-risk assessment tools (available to the public) to assess the impact environmental factors have on our investments and overall portfolio. It should be noted that these tools are still in the very early stages of their development, and companies still disclose very limited information on environmental and social factors. The assessment results from these tools thus have limitations.

Other activities

Key performance indicator

          The number of quality engagements and positive outcomes.
        

Progress achieved

Significant progress has been achieved. Aeon Investment Management has consistently contributed to the participation of RI initiatives. We constantly engage with company management on matters that involve ESG. Engagement activities include meetings with company management, voting during annual general meetings, and attending ESG-related events. However, it should be noted that it takes a number of years for positive ESG trends to emerge.

Key performance indicator

          Engagements (collaborative and those we did not collaborate in)
        

Progress achieved

Significant progress has been achieved. During engagements with company management teams, we constantly encourage other asset managers to collaborate on RI initiatives and become signatories of the PRI. We also believe collaborative engagements tend to yield better outcomes than single-investor engagements

Key performance indicator

          Completeness - Reporting/ recording of case studies
        

Progress achieved

A complete record of all the engagements we participated in is published in our bi-annual and annual ESG Report. The Report is available upon request (https://www.aeonim.co.za/engagement-activities/#).

Key performance indicator

          The number of quality engagements and positive (or negative) outcomes.
        

Progress achieved

Significant progress has been achieved over the last year in ESG. We have actively engaged with companies such as Woolworths Holdings Ltd and Naspers Ltd.

06.2. Additional information.

In addition to company engagement, Aeon Investment Management engages with policymakers to influence public policy to drive responsible investing. 


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