Responsible investing

We believe that environmental, social and governance (ESG) factors should be considered as part of investment analysis and decision making, as they are key components to building long-term sustainable value.

We make active investment decisions for single and multi-asset class multi-manager funds and portfolios, as well as recommendations of managed and listed securities through model portfolios. We have dedicated portfolios with an ethical focus designed to meet our clients’ needs including a direct equities portfolio.

Central to our investment decisions are: 

• ESG integration: We integrate ESG factors into our decision-making process where we believe those factors to be material to the current or future financial performance of the asset.
• Screening: We believe the most effective ESG approach includes a combination of divestment and active engagement. We have removed Tobacco – as defined by the Global Industry Classification Standards (GICS) – from our direct equity and externally managed investment mandates (where applicable in multi-manager implemented portfolios). Other screens can be catered for on a client-by-client basis.
• Active ownership and engagement: We delegate shareholder voting to the managers we invest with. Therefore, as part of our manager selection process we assess voting policies to ensure their approach considers the best financial interests of investors and aligns to our policies.
• Sustainable investment options: We can align investments with the elements of ESG that are most meaningful to our clients through a range of ESG model portfolios and approved managers that identify and target specific ESG themes more directly.

Our financial advisers take you through a four-step process.

1. Beliefs and values exploration: to understand what your organisation or family’s beliefs are when it comes to responsible investment and how they should be reflected within your portfolio.
2. Portfolio assessment: to evaluate the impact of your portfolio based on identified values and beliefs.
3. Portfolio review: to determine alignment with your beliefs and values and begin the conversation around closer alignment.
4. Ongoing annual reviews: to ensure continuous assessment and adjustments as needed.

The Perpetual Private manager selection process integrates ESG considerations as part of the due diligence of all investment managers. Part of our approach is to understand how these managers identify and manage ESG opportunities and risks. This may include:

Monitoring appointed investment managers’ ESG policies and how they incorporate ESG risk factors into their process.

• Where mandates have been implemented, this will involve a look through to the underlying holdings. If there are any holdings that do not appear to align with a manager’s ESG policy, we will seek explanation.
• For funds, we seek and review reporting from the managers.

Evaluating the ESG profile of our investments, where possible or applicable. For example;

• it is not possible to assess closed end structures that are yet to make an investment; and,
• it is not applicable to assess hedge funds that predominantly invest in futures and derivatives

Reporting annually on our approach and implementation of responsible investing

Reviewing ESG policies as markets, legislation, regulation and clients’ needs change.

We recognise the challenges faced by investors wanting to invest more responsibly – from a lack of transparency on the impact of their holdings, to the desire for impact beyond screens.

We've partnered with EthosESG to provide interactive ESG reporting that addresses these challenges head-on.

Our clients – from not-for-profit organisations and philanthropists looking to invest in line with their missions, to values-driven individuals and families – can request access to EthosESG’s portfolio reporting to help them understand the alignment with their values and causes.

Clients can use the transparent, personalised and nuanced insights to have meaningful conversations with their adviser around the impact of their investment portfolio to ensure their investments not only align with their financial goals but also their beliefs and values.