After a security has been purchased, the NEI ESG team monitors the company on ongoing basis for headline risk and to ensure that it continues to meet our ESG expectations. . All securities that are in the S&P/TSX Composite Index are reviewed at least annually using the NEI proprietary ESG evaluation process.
NEI Portfolio and Compliance teams ensure that all securities that have been deemed as ineligible for purchase by the NEI ESG team are not included in any portfolios. If an excluded security is purchased, NEI will work with the manager to remove/replace the security. In addition to restricting purchases of ineligible securities, we work with managers in:
- Replacing the exclusion: We expect that the manager will replace the exclusion with a company that qualifies for the portfolio based on ESG factors.
- Re-weighting the portfolio: In this case, the manager adds to the weight of remaining portfolio companies.
- Deleting the exclusion: In this case, the manager simply deletes the exclusion and no other change occurs.