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JANA Global Equities ESG Questionnaire
Thank you for agreeing to participate in this survey of Environmental, Social and Governance (ESG) practices and products in the Global equities market.
JANA Investment Advisers Pty Ltd (JANA) is one of the leading investment consultants in Australia, with our core business being the provision of traditional asset consulting advice and implemented consulting advice to institutional clients. Our firm is Australian owned with offices in Melbourne and Sydney. We have 66 investment professionals involved in research, consulting, product development and business development, with 11 support staff. As at 31 May 2012, we advise over 100 institutional clients with assets of $220bn. This includes $24bn on the JANA platform. Our clients include corporate, industry and public sector superannuation funds as well as charities, foundations and other endowment funds.
Environmental, Social, Governance (ESG)
ESG and sustainability are issues of increasing importance to our Australian institutional clients. The purpose of this survey is to gain a greater understanding of the degree to which global equity managers are considering ESG matters in their investment philosophies and processes.
The responses to this questionnaire will be used for the purposes of:
a) updating your firm’s ESG profile in our manager research database and providing a summary response for global equity portfolios held by our clients; and
b) preparing a general information paper on the survey findings for our clients. Individual manager names will not be published in any broad market research published by JANA, without prior authority sought in writing.
Please complete the appended questions for your flagship Global Equities product, to describe your organisation’s philosophy, rationale and approach to ESG within your investment process. The questionnaire should be answered separately for each Values Driven or Sustainable investment product (as applicable). Definitions for these terms are provided in the Definitions section below.
The questionnaire consists of three parts:
- Investment, focusing on how and why ESG factors are considered in the investment process. A series of questions are asked for Environmental, Social and Governance separately.
- Research, focusing on the way in which ESG information is collected and the main inputs to this research.
- Voting, Company Engagement and Policy, focusing on corporate engagement and internal policy relating to ESG factors.
Most of the answers are of a tick-box form, although we invite you to provide additional comments where relevant. You may select more than one answer, as appropriate to best reflect your firm’s situation.
We would be grateful if you could return your responses by 17 August 2012.
By providing us with a response to the questionnaire, you acknowledge agreement to the uses of the material as set out in (a) and (b) above. If you have any questions related to the completion of the survey or the intended application of the responses, please contact either Denise Healey (+612 8252 5920, [email protected]) or Kirsten Temple (+612 8252 5929, [email protected]).
We will be happy to provide you with a copy of our information paper upon completion. We look forward to receiving your response and again, thank you for your participation.
Kind regards,
Denise Healey Head of ESG Research
Michael Mulcahy Head of Global Equities
DEFINITIONS
For the purposes of this survey, please read and apply the following definitions when considering your responses to the questionnaire.
Environmental, Social and Governance (ESG): Criteria for ESG factors include, but are not limited to:
• Environment: climate change, energy efficiency, water and waste treatment practices;
• Social: human capital, workplace health and safety, industrial, community and stakeholder relations;
• Governance: business ethics, transparency of company management and reporting, executive remuneration, board structure.
Values Driven Investment:
This approach is principally motivated by the subjective values of investors, rather than the objective of maximising investment outcomes. This category includes Socially Responsible Investment (SRI) Funds and Shariah Funds. The values objectives in these, and other such portfolios, are typically achieved via restriction of the investment universe by eliminating companies and/or sectors considered to be un-investable on the basis of a moral or ethical view of their business activities.
Sustainable Investment:
This approach targets both positive shareholder (economic) outcomes, and stakeholder (fiduciary) objectives. Sustainable investment may include thematic funds such as climate change funds, clean energy funds as well as portfolios that seek to enhance overall standards of corporate social responsibility, however with an equal emphasis on producing investment results. A “Doing well by doing good” philosophy applies.
Mainstream Investment:
The principal objective is to maximise investment outcomes. Managers may incorporate the consideration of ESG factors into investment processes to varying degrees on the premise that consideration of the full range of risk exposures, including ESG factors, means that portfolio risks can be lowered and/or investment returns can be maximised with greater clarity and stability.
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| Section 1: General Information |
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| Inception Date of Strategy | | |
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| Benchmark for this Strategy | | |
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| Portfolio Manager for this Strategy | | |
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| Annual Portfolio Turnover
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| Strategy Funds under Management (USD, $M) | | |
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Product Category (please refer to definitions below):
Values Driven Investment:
This approach is principally motivated by the subjective values of investors, rather than the objective of maximising investment outcomes. This category includes Socially Responsible Investment (SRI) Funds and Shariah Funds. The values objectives in these, and other such portfolios, are typically achieved via restriction of the investment universe by eliminating companies and/or sectors considered to be un-investable on the basis of a moral or ethical view of their business activities.
Sustainable Investment:
This approach targets both positive shareholder (economic) outcomes, and stakeholder (fiduciary) objectives. Sustainable investment may include thematic funds such as climate change funds, clean energy funds as well as portfolios that seek to enhance overall standards of corporate social responsibility, however with an equal emphasis on producing investment results. A “Doing well by doing good” philosophy applies.
Mainstream Investment:
The principal objective is to maximise investment outcomes. Managers may incorporate the consideration of ESG factors into investment processes to varying degrees on the premise that consideration of the full range of risk exposures, including ESG factors, means that portfolio risks can be lowered and/or investment returns can be maximised with greater clarity and stability.
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| Please outline the specific objectives and corresponding performance measures that support your selection of product category. | | |
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| Section 2: Investment Process |
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| Is the potential impact of Environmental factors on companies (or at portfolio level) considered within the investment process? |
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| For what primary reasons are Environmental factors taken into account? |
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Please indicate how important each of the following are to your assessment of Environmental factors and to the investment decision.
Rate each option from 1-5, where 1=very important, 2 = important, 3=sometimes important, 4= occasionally important and 5= never important.
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| Is the consideration of Environmental factors an integrated part of the investment process (i.e. explicitly considered within the stock selection process) or are Environmental factors considered as deemed necessary. |
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| At what stage of the investment process are Environmental factors considered? |
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| Please outline the industries/sectors that are excluded in the strategy. | | |
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| Please describe the specific Environmental exclusion criteria applied. | | |
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| Please describe the key Environmental criteria applied and how firms are rewarded in your stock selection process. | | |
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| What situations prompt consideration of Environmental factors? |
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| How does the assessment of a company on Environmental factors affect the investment decision? |
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| What proportion of the strategy universe is currently considered non-investable as a result of Environmental factors? (%) | | |
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| What proportion of the strategy universe has, as a result of Environmental factors, had its investment attractiveness altered during the past 12 months? (%) | | |
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| Who is responsible for decisions relating to Environment factors in your investment process? |
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| How does your firm document investment decisions that have been influenced by environmental considerations? |
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| Is the potential impact of Social factors on companies (or at portfolio level) considered within the investment process? |
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| For what primary reasons are Social factors taken into account? |
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| From 1-5, please indicate how important each of the following are to your assessment of Social factors and to the investment decision
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| Is the consideration of Social factors an integrated part of the investment process (i.e. explicitly considered within the stock selection process) or are Social factors considered as deemed necessary? |
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| How are Social factors considered in your investment process? |
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| Please outline the industries/sectors that are excluded in the strategy | | |
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| Please describe the specific Social exclusion criteria applied | | |
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| Please describe the key Social criteria applied and how firms are rewarded in your stock selection process. | | |
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| What situation prompts consideration of Social issues for a company? |
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| How does the assessment of a company on Social factors affect the investment decision? |
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| What proportion of the strategy universe is currently considered non-investable as a result of Social factors? (%) | | |
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| What proportion of the strategy universe has, as a result of Social factors, had it's investment attractiveness altered during the past 12 months? (%) | | |
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| Who is responsible for decisions relating to Social factors in your investment process? |
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| How are investment decisions influenced by Social factors documented? |
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| Is the potential impact of Governance factors on companies (or at portfolio level) considered within the investment process? |
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| For what primary reasons are Governance factors taken into account? |
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| From 1-5, please indicate how important each of the following are to your assessment of Governance factors and to the Investment decision
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| Is consideration of Governance factors an integrated part of the investment process (i.e. explicitly considered in the stock selection process) or are Governance factors considered as deemed necessary |
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| How are Governance factors considered in your investment process? |
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| Please outline the industries/sectors that are excluded in the strategy. | | |
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| Please describe the specific Governance exclusion criteria applied. | | |
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| Please describe the key Governance criteria applied and how firms are rewarded in your stock selection process. | | |
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| What situation prompts consideration of Governance factors for a company? |
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| How does the assessment of Governance factors in relation to a company affect the investment decision? |
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| What proportion of the strategy universe is currently considered non-investable as a result of Governance factors? (%) | | |
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| What proportion of the strategy universe has, as a result of Governance factors, had its investment attractiveness altered during the past 12 months. (%) | | |
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| Who is responsible for decisions relating to Governance factors in your investment process? |
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| How are decisions made on the basis of Governance factors documented? |
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| Do you think that Environmental factors influence stock prices over time? |
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| Do you think that Social factors can influence stock prices over time? |
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| Do you think Governance factors influence stock prices over time? |
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| We invite you to provide a comment/document evidence to support your beliefs. | | |
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| Do you have a dedicated specialist ESG team? |
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| If Yes, Please indicate how many full time equivalent staff are involved in this activity (e.g. a part time person =0.5) | | |
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| Where do you source ESG research from to inform your analysis and decision making? |
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| Please indicate which provider (or providers) you receive external research from: |
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| Please select the answer or answers that best fits your firm’s situation. External data and information is used in the investment process for the following reasons: |
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| Of all the ESG research you obtain (both internal and external), what do you consider to be the most useful to inform your analysis and decision making? | | |
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| Do you regularly monitor the portfolio ESG score or carbon footprint of the strategy? |
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| Which company do you use for this purpose and how frequently do you monitor? | | |
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| Section 4: Voting, Company Engagement & Policy |
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| Do you seek to influence companies in relation to their treatment of ESG issues (e.g. through voting, writing letters etc)? |
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| From 1-4, Please indicate how important each of the following are to your approach to influencing companies on ESG issues
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| Please provide an overview of voting activity and the direction of votes cast for the 12 months ending 30 June 2012. |
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| For votes cast against management, please indicate how many were environmental, social and governance issues (%, please sum to 100%). |
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| Did you participate in filing or co-filing of shareholder resolutions over the past 12 months ending 30 June 2012? |
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| To what extent have you developed a comprehensive engagement capability beyond financial matters? (Engagement is considered to be actions that go beyond questioning a company, e.g. presenting a view, seeking change and monitoring and documenting results). Please indicate how many engagements with companies have taken place over the year to 30 June 2012 on specific ESG factors. |
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| Please provide an example of when you have engaged with a company in relation to ESG related issues | | |
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| Do you receive any external or independent advice on voting? |
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| Please indicate the source of voting research? |
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| Is your firm a member of a Responsible Investment organisation? |
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| Please advise if you have any of the following:
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| Please attach your ESG policies or any further information. |
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