ESG is an integral part of our due diligence. We have adopted the Sustainable Accounting Standards Board (SASB) framework into a proprietary ESG scoring template. Scores are used to inform portfolio weightings. Where needed and possible we engage with the company.
After considering external factors such as industry reports and research, the Fixed Income team applies a comprehensive due diligence checklist to a prospective security, which includes positive and negative screening factors. ESG considerations help them with their goal of maximising yield per unit of risk.
ESG criteria are central to the investment decisions made. We are looking for companies that align with our focus on better lives, better planet and better inclusiveness. Once we have invested we actively engage with our portfolio companies to affect positive outcomes.
CIO also urges investors to focus on secular trends rather than short-term market movements
“ESG investing has gained in prominence in recent years, propelled by heightened environmental concerns, social justice movements and, of course, a global pandemic that has exposed poor governance and vulnerable citizens.”
The pandemic has heightened investor interest in ESG considerations, as COVID-19 has had implications for society and corporate governance practices, as well as links to environmental factors. With the breadth of ESG labeled products out there, how can you determine substance from marketing speak?
Felix and Kenndal hosted Judy Cotte, former CEO of ESG Global Advisors and now Head of ESG at Onex, to review the impact of the pandemic on ESG investing and in particular how to spot a truly integrated ESG approach from “greenwashing”.
ESG stands for Environmental, Social and Governance. In order to explicitly state the underlying factors that we evaluate, monitor and engage with, Pender has subscribed to the definitions from the Sustainability Accounting Standards Board (SASB) below:
Environmental – Greenhouse emissions, air quality, energy management, water and wastewater management, waste and hazard materials management, ecological impacts.
Social Capital – Human rights and community relations, customer privacy, data security, access and affordability, product quality and safety, customer welfare, selling practices and product labeling.
Human Capital – Labour practices, employee health and safety, employee engagement, diversity and inclusion.
Business model and innovation – Product design and lifecycle management, business model resilience, supply chain management, material sourcing and efficiency, physical impacts of climate change.
Leadership and governance – Business ethics, competitive behavior, management of the legal and regulatory environment, critical incident of risk management, system risk management.