Pendal Sustainable Australian Fixed Interest Fund

Product Name

Pendal Sustainable Australian Fixed Interest Fund

Issuer

Pendal Group

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale, Institutional

Certified Since

2017

Asset Classes

Fixed income

Markets

Australia

Investment Approaches

Best in class screening, Negative Screening

It Includes:

  • Riaa icons 32 Green property
  • Riaa icons 11 Impact investments
  • Riaa icons 10 Renewable energy and climate change solutions
  • Riaa icons 15 Social and sustainable infrastructure

It fully excludes:

  • Riaa icons 41 Alcohol
  • Riaa icons 36 Armaments
  • Riaa icons 33 Fossil fuels
  • Riaa icons 42 Gambling
  • Riaa icons 52 Human rights abuses
  • Riaa icons 99 Pornography
  • Riaa icons 35 Tobacco

Overview

3. Labour, environmental, social and ethical considerations The following text contains further information on the labour, environmental, social and ethical considerations that we take into account when selecting, retaining or realising investments in the Fund and should be read in conjunction with the PDS. The Fund invests in securities issued in Australia by Australian and offshore issuers that are considered to meet the Fund’s sustainable and ethical criteria. Our sustainable assessment process considers the extent to which an issuer exhibits appropriate strategic recognition, board oversight, policies and systems to manage the issuer’s material environmental, social, and corporate governance (ESG) issues. Specifically, the assessment may consider issues such as: Environmental management • Management of environmental impacts through the implementation of best practice environmental techniques, technologies and product design • Environmental performance against a range of environmental indicators including, for example, greenhouse gas emissions, energy and water use and environmental incidents • The capacity to consult key stakeholders in relation to activities that may have significant environmental impacts • Adoption of best practice with regards to management and disclosure of material risks and opportunities associated with climate change Social practices • Equal opportunity, anti-discrimination and industrial relations policies and practices • Staff incentives, development and training • Employee benefits and entitlements • Human capital management performance against a range of indicators, such as voluntary turnover and gender diversity in senior management • Products or services that provide positive social impacts such as improved health & community well-being, disease prevention, and education • Management of contractors and suppliers • Workplace health and safety performance against indicators such as fatalities and lost time injury frequency rate Corporate governance and business conduct • Codes of conduct and the extent of their integration into the issuer’s operations • Provision of regular and appropriate training • Whistleblower policies and procedures • Ethical conduct and performance of employees and officers – the extent to which issuers are adopting principles in areas such as complying with the law, fair and open dealings and accepting responsibility for their actions • Product safety and consumer protection • Engagement practices with employees, shareholders, and key community stakeholders Ethical practices The Fund will not invest in issuers with material business involvement in the following activities: • the production of tobacco or alcohol, • manufacture or provision of gaming facilities, • manufacture of weapons or armaments, • manufacture or distribution of pornography, • the direct mining of uranium for the purpose of weapons manufacturing, • extraction of thermal coal and oil sands production. We consider that an issuer has a material business involvement in an activity if 10% or more of its total revenue is derived from that activity. How these factors are taken into account when selecting investments The investable universe consists of issuers satisfying our sustainable and ethical assessment process. Issuers with higher sustainable, ethical and financial ratings will typically be favoured to those issuers with lower scores. Lower ranked issuers will generally be excluded from the Fund’s investable universe. The criteria applied to the Fund’s investments may exclude some issuers from the investable universe of the Fund’s portfolio. For this reason the Fund’s performance may vary when compared to other funds that are able to invest in these issuers. This risk should be considered when deciding whether to invest in the Fund. The Fund’s compliance with the investment guidelines is reviewed regularly (usually monthly, but this timeframe is not fixed). If our review process identifies that an investment ceases to comply with the investment guidelines for the Fund, the investment will usually be sold as soon as is reasonably practicable, having regard to the interests of investors (but this may vary on a case by case basis).


Description


Investing in this fund provides exposure to companies assessed as demonstrating and or/offering leading environmental and social practices, products and services, whilst avoiding companies that do not meet the Fund’s ethical guidelines.

Ethical practices
The Fund will not invest in issuers with material business involvement in the following activities: 
  • the production of tobacco or alcohol, 
  • manufacture or provision of gaming facilities, 
  • manufacture of weapons or armaments, 
  • manufacture or distribution of pornography, 
  • the direct mining of uranium for the purpose of weapons manufacturing, 
  • extraction of thermal coal and oil sands production. 
We consider that an issuer has a material business involvement in an activity if 10% or more of its total revenue is derived from that activity.

The Fund actively seeks investments in securities that in addition to meeting our financial risk and return requirements also generate positive societal and/or environmental impact (and where possible contribute towards the advancement of the UN Sustainable Development Goals agenda) by actively investing in green bonds, social bonds or sustainable bonds. 

Pendal actively engages with the management of the issuers we invest in where we believe it is material in terms of managing risk, effecting change and realising potential value over the long term.


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