• ESG The Pender Way

    A Fundamental Integrated Approach

Our goals, in incorporating ESG criteria into our investment process, are to provide better risk-adjusted returns by analyzing potential ESG risks impacting investments and to add more value to our research, portfolio-management and risk management analysis. We also hope to contribute to the industry’s advancement in this area.

Pender’s ESG Policy

ESG in Equity

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.

ESG in Fixed Income

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 in Pender Ventures

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.

FAQ

Why is ESG an important factor in Pender’s investment process?
  • RISK – The reality is that good ESG practices do reduce business risks*. We incorporate ESG factors into our investment process with the goal of mitigating the impairment of permanent capital – one of the cornerstones of our investment process.
  • ALPHA – Research* now confirms that companies that score strongly in ESG factors actually outperform, and we have the potential to enhance returns by investing in such companies.
  • ASPIRATION – We want to live in a society that holds companies accountable, advocates for diversity and inclusion and takes responsibility for the environment.

*Khan, Mozaffar N., George Serafeim, and Aaron Yoon. “Corporate Sustainability: First Evidence on Materiality.” Harvard Business School Working Paper, No. 15-073, March 2015.

How does Pender define ESG?

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.