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Jackson Square Partners

PRI reporting framework 2020

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

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.

Integration into the Investment Process

We are active owners, carefully analyzing ESG issues for all pipeline and portfolio ideas, playing both offense and defense. 

On offense, we identify ideas where an ESG issue contributes to a company’s sustainable growth or competitive moat.  Positive management, Board, compensation, or other Governance changes have played a role in many of our portfolio ideas – often changes informed by Jackson Square’s proactive engagement.  On defense, we ensure that a company’s cost of capital reflects all material ESG issues – both positive and negative – in our Intrinsic Business Value (“IBV”) framework. 

Analysis of ESG factors can heavily influence our IBV estimate for a company, both in our assessment of a company’s sustainable free cash flow growth rate, and in the cost of capital we apply.  We believe that this integration of ESG analysis into our quantitative IBV-setting exercise is a simple and effective way to incorporate these issues into our investment process.

Jackson Square ensures a consistent approach to evaluating ESG factors through bottoms-up and top-down mechanisms.  For each new investment idea, our analysts complete a rigorous, consistent, bottoms-up set of analyses on material ESG issues, explaining how ESG factors play a role in our assessment of a company’s IBV and laying out key ESG engagement priorities (if any) to push with the company.  From a top-down perspective, Jackson Square’s ESG Working Group – composed of several members of the investment and broader team – meets monthly to review all new investment ideas, update best practices, and discuss macro or other ESG issues which could affect existing holdings (e.g., new regulations, UNPRI Sustainable Development Goals, etc).  We believe that this combined approach leads to a consistent integration of our ESG principles into the investment process.

Company Engagement

Since its founding, Jackson Square has consistently engaged with management and stakeholders of many portfolio companies to enhance shareholder value.  We are not activists, but we are active owners engaging where we believe we can have impact and drive positive change.  These engagements have different aims tailored to each situation, but key examples of where we have had influence include:

  • advocating for improved capital allocation,
  • supporting changes in management or in a management team’s compensation structure,
  • shifting a company’s core strategic focus, and
  • optimizing investor communication, disclosures, and target setting.

ESG factors are core to our view of a company’s IBV, so we believe that helping a company enhance its performance against these factors can create significant value.  To that end, we proactively identify ESG-linked engagement priorities – when relevant and material – for all new investment ideas as part of our investment process.  We draw on these sets of priorities during all management touchpoints.  And we use the full range of tools at our disposal to influence Boards and management teams over time.  Jackson Square will continue to practice active ownership on ESG issues, engaging with a subset of our portfolio companies on an annual basis to improve practices.

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


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


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


(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]


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.

          Material ESG issues, both positive and negative are factored into our Intrinsic Business Value (IBV) framework.
        

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

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

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]


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


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