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Terra Alpha Investments, LLC

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities

ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
100 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.

Terra Alpha's proprietary Environmental Productivity analytical process provides a unique framework that we use to evaluate public companies around the world. Our Enduring Business Model scoring process is used in tandem to identify the long-term opportunities and risks for companies in a changing world and is core to our consideration for inclusion in our portfolios. We believe that a diversified portfolio of companies with an optimized combination of enduring business models and superior environmental operating efficiencies purchased at reasonable valuations will provide investors with attractive long-term returns.

 

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Terra Alpha’s investment strategy incorporates all material environmental, social, and governance information to identify businesses that are positioned for success based on their Environmental Productivity. Environmental Productivity measures the efficiency with which companies use and impact natural resources. Through this approach, Terra Alpha is able to identify ESG risk and opportunity. We begin our process with disclosed environmental data; we do not even consider companies that do not disclose at least GHG emissions. Our process continues as we look for the most environmentally productive, resource-use efficient companies in each sector, and then look to analyze more traditional factors to choose companies for our portfolio.

 


LEI 02. Type of ESG information used in investment decision (Private)


LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate whether your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]

Our corporate engagement has two primary methodologies. In both categories, our investment research analysts lead our interactions with companies. This is both more efficient for us and effective in driving impact with that company. In any interaction with a company, the analyst is utilizing Terra Alpha’s proxy voting policies, Ideal Disclosure guideline, and Environmental Productivity analytical framework to identify the highest priority issues to discuss.

 


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

Terra Alpha's proprietary Environmental Productivity analytical process provides a unique framework that we use to evaluate public companies around the world. Our enduring business model research about the long-term opportunities and risks for companies in a changing world is core to our consideration for inclusion in our portfolios. We believe that a diversified portfolio of companies with an optimized combination of enduring business models and superior environmental operating efficiencies purchased at reasonable valuations will provide investors with attractive long-term returns. 

 

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

We provide our investors and prospective accredited investors with quarterly letters updating them on fund performance and any changes in our investment process. 


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

We are able to evaluate financial/ESG risks and opportunities through our internal Environmental Productivity rating system, which utilizes company-specific quantitative and qualitative research to evaluate the growth and environmental outlook of our holdings. 


LEI 06. Processes to ensure fund criteria are not breached (Private)


(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

Terra Alpha’s Environmental Productivity analytical framework is infused throughout our rigorous and repeatable investment process. Environmental Productivity is the measure of a company’s ability to manage risk and seize opportunity through their use of natural resources in an increasingly resource constrained world. Through a combination of our Environmental Productivity rating and our Enduring Business Model scoring process, the resulting strategy is simply a more holistic understanding of where long-term financial opportunity exists. 


(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]

Terra Alpha Investments utilizes an environmental frame in our investment process.  While we do consider social and governance factors while evaluating a company’s enduring business model, our primary consideration is environmental factors.


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]

We utilize a fully integrated investment process to determine which companies are best positioned to thrive in a changing world. We conduct weekly investment calls to socialize the Environmental Productivity and Enduring Business Model assessments on all companies currently in, or being considered for, our portfolio. 


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


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