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Coronation Fund Managers

PRI reporting framework 2020

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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%
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.

As long-term stewards of our clients’ capital, it is central to our investment philosophy and process to analyse each investment to create, sustain and protect value. Our approach to ESG-related activities focuses on three key functions: integration, engagement and collaboration. The aim being to generate positive changes that will create more value in the portfolios we manage on behalf of our clients while ensuring a sustainable future for all generations. ESG is fully integrated into our investment process . In valuing businesses, allowance for ESG-related factors are taken into account, either explicitly or by adjusting the discount rate applied to their normalised earnings. We thus build in the risks and opportunities relating to material environmental, social and governance considerations in the ratings of the businesses we analyse. Where we can, we explicitly allow for ESG costs in the modelling of the company earnings. We believe it is imperative that ESG remains the remit of the investment team and the dedicated analyst, as they are far better able to understand the nuances and implications of ESG factors and how it impacts on the company than an external party would. The senior portfolio managers, CIO and head of research are always involved in major ESG decisions.  

 

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

Not applicable.


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]

The long-term nature of the investment philosophy requires us to incorporate ESG and sustainability issues into our investment process and in every investment decision that we make as we need to account for these factors in trying to understand a business’ long-term worth.

 


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.

          We engage with investee companies about disclosure and mitigation efforts and review MSCI ESG research to ensure all concerns raised have been considered
        

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

09.4. 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]

Coronation performs its own proprietary modelling and valuation of stocks, including internal ESG assessments. We source information from publicly available sources including, but not limited to, the annual reports of companies or other public documents, news articles, third party databases like CDP, direct communications with companies etc. We also research outside the conventional channels. We spend a lot of time talking to customers, suppliers, regulators, competitors (local and global), ex management etc. The team reads widely, engages with relevant industry executives, research organisations and analyst to understand the risks of companies we analyse.

We also subscribe to MSCI ESG rating module for access to their independent ESG reports on companies for consideration by the analyst covering each respective stock. We do not place value on the rating provided, we ensure any risks raised have been considered. 

 

 

 


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


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