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Redpoint Investment Management

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(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

Redpoint uses two approaches to exclusionary screening, based on client requirements.

The first approach uses our proprietary rating, which draws on all three domains of ES and G information and integrates that with long-horizon quantitative financial signals.

  • We apply the screening globally, eliminating between 10% and 60% of a benchmark universe (benchmark dependent).
  • We hold all stocks to the same standard rather than apply a best of sector approach.
  • Any country and/or industry and sector biases, introduced by the screening, are managed in the portfolio construction process.

The outcome is a portoflio, with above average ESG scores.

The second approach screens on product, activity and/or sector-membership, driven by each client's own policies.

Either approach can be used standalone, or as a base for an enhanced strategy that uses alpha metrics that integrate ESG considerations.

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

Redpoint's proprietary rating has been developed using a combination of:

  • individual experience - our Chairman (and former CIO) has been involved in incorporating ESG issues in investment strategies since 2001
  • organisational experience - Redpoint has been incorporating ESG issues in investment strategies since its inception in 2011 and our current CIO has been with the firm since inception
  • establishing a priori expectations for the influence of individual indicators
  • applying rigorous quantitative analysis to the historical investment performance response to candidate indicators.

Attribution analysis is an ongoing process that provides feedback on the efficacy of the rating.  However, as with all quantitative processes, there is a balance between needing time (multiple years of data) to raise confidence levels and evolution of the underlying investment drivers.   Accordingly, we review the composition of the rating annually, but with a less than 50% probability of changing the rating's specification.

If a change in the specification leads to a significant change in the ratings behaviour, or the nature of the information it comprises, we would inform client's prior to implementing any changes to their strategies.


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.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

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

05.5. Additional information. [Optional]


LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached.

06.2. If breaches of fund screening criteria are identified, describe the process followed to correct those breaches.

Any position outside guidelines is corrected as soon as practicable.  Any breach of a mandate constraint is dealt with in accordance with the mandate requirements and internal policies on breach reproting.

06.3. Additional information. [Optional]


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