We use third-party research for our initial screening for the cluster munitions and land mines, climate and governance and conduct exclusions. We review our ESG research providers at least annually, and receive regular updated data feeds. All exclusion lists are reviewed and updated annually.
For cluster munitions and land mines, all companies identified in the third-party screen were reviewed by a member of the Sustainable Ownership team, and checked by the Head of Sustainable Ownership. In cases where the involvement was not clear, we contacted the data provider to verify, and also cross-check the list against other publicly available exclusion lists. Additional research may also be carried out internally.
For the climate exclusion list, all companies identified in the screening process were notified in writing that they had been identified as deriving more than 30% of their revenues from thermal coal and/or tar sands, and were given time to respond and verify the revenue assessment. Where companies provided information in the public domain that disputed the research provider’s data, we updated the exclusion list.
For governance and conduct, all companies identified in the screen underwent a qualitative review by a member of the Sustainable Ownership team. All qualitative analyses were reviewed within the team and the most significant received a letter asking for dialogue on governance and sustainability practices. Following the engagement, the team identified which companies to place on an exclusion list.
All exclusion lists were reviewed and signed off by the Railpen Investments Board. Following this, the exclusion lists were added to our internal trading platform.