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TRINETRA INVESTMENT MANAGEMENT LLP

PRI reporting framework 2020

You are in Strategy and Governance » ESG issues in asset allocation

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe All companies that we research are modelled to consider ESG factors. The models comprise a central (most likely) scenario, as well as a bull and bear case. ESG factors are integral to the models and are incorporated in the thorough risk assessment methodology that we employ.
Describe Climate-related risks are an essential component of the ESG factors as discussed in the previous answer.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

          As equity managers, our top-down geographic and sector allocation is based on bottom-up allocation to individual stocks according to risk-adjusted expected returns.
        

13.3. Additional information. [OPTIONAL]

Our risk assessment uses a premortem process, whereby analysts imaginatively project themselves 5 years into the future and assume that the investment has been a failure, and earnings have not grown over that period.

The investment team looks at all possible risks including environmental, social and governance risks that could have brought about this outcome and work backwards to today to assess their likelihood and materiality. 

The assessment of those risks will drive a forward-looking risk assessment which the team uses to estimate the threshold cost of equity for each potential investment.  As such all risks, including ESG risks, are factored in when looking at the required level of return above the cost of equity.


SG 13 CC.


SG 14. Long term investment risks and opportunity (Private)


SG 14 CC.


SG 15. Allocation of assets to environmental and social themed areas (Private)


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