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Ardevora Asset Management LLP

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 300%

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

Ardevora’s investment process lies at the heard of everything it does. Ardevora’s objective is to generate significant outperformance over the long-term whilst maintaining a relentless focus on risk.

Ardevora is dedicated to achieving the best possible risk-adjusted returns for its investors and believe responsible investment ("RI") is an important factor in achieving these returns for its clients. As part of this Ardevora strive to gain an understanding of the relevant environmental, social, governance ("ESG") issues applicable to its investments and seek to identify these issues before they escalate into events that may threaten the value of its investments.

To enhance Ardevora’s ESG understanding, Ardevora collects ESG information from third party providers of ESG research – this strengthens its Fund Managers understanding of a company’s ESG practices and the risks that they may present to Ardevora’s current and potential portfolio holdings. While these service providers do not cover every company in Ardevora’s investment universe, they provide a comprehensive tool to enhance and supplement fundamental research and analysis. The external service provider reports are used to derive scores for corporate governance, socially responsible and environmental factors which feed into the decision to invest. 

Identifying and incorporating ESG factors does not substitute Ardevora’s existing investment process. It presents additional factors to be taken into the investment decision. Ardevora retains complete control over any investment decisions.

In addition, Ardevora has a Global Long-only Equity SRI Fund. This Fund has exposure to a broad spread of stocks in most of the major equity markets around the world. The Fund will typically hold between 140 and 190 stocks and these will be equally weighted by region in order to reduce individual stock risk. The construction of the Fund includes an overlay screen, which includes some of the principles of Socially Responsible Investment ("SRI").

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

To enhance Ardevora’s ESG understanding, Ardevora collects ESG information from third party providers of ESG research – this strengthens its Fund Managers understanding of a company’s ESG practices and the risks that they may present to Ardevora’s current and potential portfolio holdings. While these service providers do not cover every company in Ardevora’s investment universe, they provide a comprehensive tool to enhance and supplement fundamental research and analysis. The external service provider reports are used to derive scores for corporate governance, socially responsible and environmental factors which feed into the decision to invest.

Ardevora has a Global Long-only Equity SRI Fund. This Fund has exposure to a broad spread of stocks in most of the major equity markets around the world. The Fund will typically hold between 140 and 190 stocks and these will be equally weighted by region in order to reduce individual stock risk. The construction of the Fund includes an overlay screen, which includes some of the principles of Socially Responsible Investment ("SRI").


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)


(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

Ardevora’s investment process lies at the heard of everything it does. Ardevora’s objective is to generate significant outperformance over the long-term whilst maintaining a relentless focus on risk.

Ardevora are dedicated to achieving the best possible risk-adjusted returns for its investors and believe responsible investment ("RI") is an important factor in achieving this. As part of this Ardevora strive to gain an understanding of the relevant environmental, social, governance ("ESG") issues applicable to Ardevora's investments.

To enhance Ardevora’s ESG understanding and supplement existing fundamental research, Ardevora collects ESG information from third-party providers of ESG research, which strengthens its Fund Managers understanding of a company’s ESG practices and risks. The external service provider reports are used to derive scores for ESG respectively. Identifying and incorporating ESG factors does not substitute Ardevora’s existing investment process. It presents additional factors to be considered in the investment decision.

Ardevora’s Global Long-only Equity SRI Fund has exposure to a broad spread of stocks in most of the major equity markets. The construction of the Fund includes an overlay screen, which include some of the principles of Sustainable Responsible Investment ("SRI").

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

Part of the responsibilities of Ardevora include reviewing and defining Ardevora’s consideration of ESG factors and any necessary screen. Once a decision is made by Ardevora to amend or offer different screenings, clients and/or beneficiaries will be duly consulted before any changes are implemented.

Additionally to the Ardevora SRI Fund mentioned, client segregated accounts may impose their own specific screens which they would have Ardevora apply. For example, one of Ardevora's clients has it impose a controversial weapons screen over and above the Ardevora firm level screen.


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.

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

05.5. Additional information. [Optional]


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

          Review and evaluation of external research providers.
        

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.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information. [Optional]

Ardevora’s independent RI implementing partner, Kukua, reviews the quality of data provided by Ardevora’s third-party ESG data provider periodically. In addition to this, Kukua also updates Ardevora of any new ESG data products that come to the market that could enhance its ESG consideration.


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


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