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Pathfinder Asset Management

PRI reporting framework 2020

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

ESG incorporation in actively managed listed equities

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%
48 %
Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
52 %
Total actively managed listed equities 154%

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

We believe investing in a socially responsible manner will lead to better investment outcomes for our investors and better outcomes for society generally.

Considering all operational risks over a long-term horizon includes reviewing Environmental, Social and Governance (ESG) factors in their investment process.

We have chosen to avoid investing in some industries or companies that have significant ESG risks which we do not feel comfortable investing ie for example Tobacco. Our thematic strategies are based on broader ESG issues that we feel will have a significant impact if not addressed for example the water fund. 

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

For all listed equity, Pathfinder excludes companies with (a) revenue from armaments, gambling, tobacco, thermal coal or pornography and (b) high levels of current operational “controversy”, and then prioritize companies with high environmental, social and governance scores.

 

In addition to this, for the Water Fund Pathfinder selects listed water stocks from developed markets and screens for animal testing and animal products. Our Global Property Fund uses ESG screening; our 4 main sustainable investment themes are water, forestry, sustainable data centres and renewable energy.


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

We believe investing in a socially responsible manner will lead to better investment outcomes for our investors and better outcomes for society generally.

We have chosen to avoid investing in some industries or companies that have significant ESG risks, for example tobacco, thermal coal and controversial weapons. 

 

Screened by

Description

We invest in companies with high ESG scores we see as outperforming their industry peers. Sustainalytics provides data and performance relative to peers for each ESG criteria and we carry out independent research. Our thematic strategies are based on broader ESG issues that are likely to have a significant impact if not addressed as in the water fund, and we invest in companies with the best ESG performance. 

Screened by

          WHO Framework Convention on Tobacco Control (2003) Cluster Munitions Prohibition Act NZ (2009); Nuclear Disarmament & Arms Control Act NZ (1987); Convention on Cluster Munitions
        

Description

Pathfinder have chosen to support the WHO Framework Convention on Tobacco Control (2003) whose aim is to "protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke". We therefore have chosen to exclude tobacco related investments from our portfolio.

We also exclude controversial weapons according to national and international legislation:  Cluster Munitions Prohibition Act NZ (2009); Nuclear Disarmament & Arms Control Act NZ (1987); Convention on Cluster Munitions (2008); South Pacific Nuclear Free Treaty (1986); Nuclear Non-Proliferation Treaty (1970)

We exclude companies that do not respect basic human rights, in accordance with the UN Global Compact Principles and the UN Guiding Principles on Business and Human Rights.

 

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

The screening criteria are established to reflect Pathfinder's investing values.  

Pathfinder uses the NZ Super Fund exclusions list as a starting point for our exclusions list.This list is updated on an ad-hoc basis but is at least once per annum. We also describe our screening in our ethical investment policy on our website.

All changes are amended within our exclusions policy which is available on our website.

Investors are notified in our monthly reporting if screen criteria are changed. 


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.

05.5. Additional information. [Optional]


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


(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

Pathfinder have three responsible investment funds that focus on water, global property, and broader responsible investment. 

The Water Fund is both environmentally and socially responsible - we invest in companies that have a positive impact on the global water scarcity crisis - e.g. innovative technologies. The fund also has an animal welfare focus.

The Global Property fund focuses on sustainability and energy efficiency.

The Global Responsibility Fund invests in companies with strong ESG standards.

Our KiwiSaver (CareSaver) funds have only stocks selected to our highest ethical criteria - this is more strict than our other responsible funds; it excludes animal testing and factory farming.


(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]

ESG factors are researched by both an external ESG service provider and our in-house team.


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.

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]


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


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