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Gresham House plc

PRI reporting framework 2020

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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]

As our LE funds invest across sectors, we have developed a thematic Sustainable Investment framework which helps identify broad themes across which material ESG factors could be clustered. We have made this publicly available on our website, and covers the following

  • Environment: carbon (including climate change), emissions & pollution; natural resource management; and waste management;
  • Social: employment, health, safety & wellbeing; supply chain sustainability; community care & engagement; and marketplace responsibility; and
  • Governance: governance & ethics; risk & compliance; and commitment to sustainability. 

The f provides a thorough and replicable structure with which our team can rapidly filter material issues on which to undertake focused research.  

We have worked with external ESG experts to develop:

  • A set of themed mind maps which build on each of the individual topics within our SI framework giving depth 
  • A set of structured questions in our ESG tool carefully designed to prompt thinking from our investment managers around  ESG factors.
  • A mechanism to centrally track mitigating actions which will help reduce material ESG risks and, in the longer-term, progress ESG opportunities for value creation.

Our team has been trained in these processes to ensure that they have the capability to implement them.


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.

09.4. 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]

In the last 12 months, we have updated and improved processes which are backed by supporting tools, and expert training programmes. This includes our bespoke asset class management tool which is designed to run across the life cycle of each investment.

Moving forward, all information will be held in this tool and saved in a central location on our system so that it is accessible to all relevant individuals. This information is now being embedded and summarised in our wider processes including:

  • Initial Investment Appraisal form;
  • Gresham House's deal flow tracking system;
  • Investment Committee meetings;
  • Ongoing conviction scores.

Our updated processes are consistent with the four key stages of ESG integration which have been set out by the PRI, specifically:

  • Qualitative Analysis – via our bespoke tool, augmented with additional information from our wider Initial Investment Appraisal form;
  • Quantitative Analysis – via our financial forecasting and valuation models, including our conviction scoring which is periodically reviewed;
  • Investment Decision – taken and documented in our IC meetings/papers and specifically including a summary of material ESG considerations; and 
  • Active ownership – regular management meetings, with tracking of relevant ESG materials which are implicit in company valuation, updaing conviction scores and voting decisions

LEI 10. Aspects of analysis ESG information is integrated into (Private)


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