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Pareto Asset Management AS

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

Product/activity/sector

  • Companies that produce weapons that through normal use violate fundamental humanitarian principles.
  • Companies that produce tobacco.
  • Companies that sell weapons or military material to states as specifed by the scheme for government bond exceptions mentioned in the mandate for the Norwegian Government Pension Fund.
  • Mining companies and power producers that themselves or through consolidated entities they control will have 30 per cent or more of their revenues from thermal coal, or basing 30 per cent or more of their business on thermal coal.
  • Companies engaged in producing pornography.

Environmental and social practices

  • Serious or systematic violations of human rights such as murder, torture, deprivation of liberty, forced labour, the worst forms of child labour.
  • Serious violations of individual rights in war or conflict situations.
  • Severe environmental damage.
  • Acts or omissions on an aggregated company level, to an unacceptable degree, leadsing to emission of greenhouse gases.
  • Gross corruption.
  • Other especially severe breaches of common norms and rules.

Countries/geographic regions

In the (exceptional) event we consider investing in companies listed outside the OECD, a more thorough analysis needs to be made.

Corporate Governance

Companies with sub-standard corporate governance.

Other

We also have a product-based precautionary principle towards certain sectors.

Screened by

Description

Negative transition risk (opportunities arising from the transition to a less carbon-dependent world) is factored into stock selection, e.g. when investing in a solar parks company.

Screened by

Description

Our internal guidelines are based on these principles and guidelines and more. 

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

The screening criteria are based on the Norwegian Government Pension Fund and recognised international standards and principles, as well as emerging environmental and soscial trends etc. The criteria are reviewed biannually, and communicated to clients in our biannual SRI report. 


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.

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

05.5. Additional information. [Optional]

Our equity funds have low turnover, meaning that we tend to know these companies very well - and spend more time analyzing new candidates for investment. As for new candidates, thus, the share is very high. For the portfolio in total, maintaining ESG knowledge and insights takes less time - though we do examine their products and practises on an ongoing basis (cf. also next page).


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


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