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Stanhope Capital

PRI reporting framework 2020

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You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories

08.1. Describe how you ensure that best RI practice is applied to managing your assets

Measures

          Where we feel RI practices fall short, we alert and engage with managers.
        

Measures

          We require all of our managers to have good internal governance and expect that significant regulatory breaches will be unearthed during our due diligence process. We will remove managers with regulatory issues where engagement has failed or the breach is deemed insurmountable. In our approval process we show preference for managers with a strong compliance culture and framework, and have increased awareness about environmental and social issues through the initiation of an RI DDQ. Over time, we have seen the RI practices of managers improve on aggregate. In extreme instances, we have moved away from managers in favour of those with better practices.
        
          Operational Due Diligence team right of veto
        

Measures

          Our operational due diligence team has the right to veto any investment (held or vying for approval) if it does not meet their rigorous standards.
        

08.2. Additional information. [Optional]


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          ESG incorporation
        
Conducted by
Asset class
Scope and process

As part of our due diligence process for listed equity and FI funds, we seek to gain an understanding of the level of ESG integration in our managers' investment processes. Where a manager claims to be "incorporating ESG" we expect to see evidence of how their ESG analysis impacts the target price, decision to hold and/or position sizing. Funds which cannot evidence this are not considered to be integrating ESG, even if there is compelling evidence that ESG information is analysed at the firm level.

Outcomes

We are better able to make investment decisions and to advise our client teams about the level of ESG integration within our approved funds. 

Topic or issue
          Engagement
        
Conducted by
Asset class
Scope and process

As part of our due diligence process for listed equity and FI funds, we seek to gain an understanding of the level of engagement conducted by our managers' firms and the fund teams. Where a manager claims to be engaging with underlying companies, we require information about a specific case, and typically want to see engagement on E and S as well as G. 

Outcomes

This process enhances our understanding of how our managers think about responsible investment and ESG integration. There is also some evidence that ESG improvers perform better than positive ESG or negative ESG; engagement with companies could help to capture this. 

09.2. Additional information.

For every fund within the listed space we require managers to complete a comprehensive RI DDQ as part of our due diligence process and to enter into a dialogue with us on the responses. We, therefore, cover a multitude of ESG issues during the process of manager selection and appointment. In terms of monitoring, ESG continues to be a key part of our dialogue with managers through our holding period. 


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