We believe that a holistic view of a company, including the consideration of ESG factors, promotes a well-rounded approach to investing with better risk adjusted return outcomes for clients. In making investment decisions, we consider ESG through a range of perspectives including our proprietary ESG&E scoring system, external sustainability data and engagement with companies to assist with decision-making.
At Perennial, we have a dedicated ESG strategy which invests in companies that are making a positive contribution to a better future. The strategy is available through:
The research we undertake on ESG attributes, in conjunction with the analysis of the numbers and financials, can provide us with a more holistic view of the company. We have compiled our own ESG database and have developed a proprietary ESG&E scoring system (see ‘Our Integration of ESG’). We believe that this approach will ultimately lead to better risk-adjusted return outcomes for our clients.
ESG is integrated into our broader investment strategies. We maintain an ESG database which includes relevant data for each company under coverage. This data relates to a range of ESG issues including greenhouse gas emissions, safety performance, diversity metrics and governance structure. This data is used when determining our proprietary ESG&E score for each company. The ESG&E scoring criteria takes into account the company’s performance in relation to environmental, social and governance metrics. In addition, the criteria include an “Engagement” score where we assess the extent to which the company is engaged in improving ESG outcomes rather than just “ticking the boxes”. We take the ESG&E score for each company into account when making investment decisions. Further detail in relation to the steps we have taken to incorporate ESG into our investment process is included in our Responsible Investment Policy.
Perennial is a signatory to the United Nations backed Principles for Responsible Investment. We report our progress annually in the PRI signatory reporting tool. We are supporters of the Task Force on Climate Related Financial Disclosures (TCFD) and a signatory to the 30% Club, which campaigns for at least 30% of women on boards.
We have a Responsible Investments Working Group which includes representatives across investment teams as well as from our operations and corporate functions. It is engaged in not only improving our approach to responsible investing but also developing our corporate strategy in relation to ESG, sustainability and responsibility.
We are constantly seeking to improve our performance in this area, and current initiatives include:
For corporate governance to be effective, it is necessary for us, and other shareholders to be willing to act as owners of companies and to express our views to boards of directors, as well as exercising our voting rights.
Our policy is to vote on all company resolutions. We believe that voting rights are a valuable asset and should be used appropriately for the long-term interests of shareholders. We seek to vote ‘yes’ or ‘no’ in all circumstances. We prefer not to ‘abstain’ from any vote.
We engage with management on contentious issues and vote against board recommended resolutions when considered appropriate. You can find a summary of our engagement activities during 2020 here. Our approach to proxy voting is incorporated in our Responsible Investment Policy and ensures that we adhere to, and are compliant with, the Financial Services Council Standard No 13 (Voting Policy, Voting Record and Disclosure).
On a semi annual basis, we publish a summary of our proxy voting record. To see the record for 6 months to 31 December 2020, please click here.
Only institutional, sophisticated and wholesale investors, as defined in the Corporations Act 2001 (Cth), may make applications to invest in the Perennial Private to Public Opportunities Fund.
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