Pendal Sustainable Balanced Fund

Product Name

Pendal Sustainable Balanced Fund

Issuer

Pendal Group

Category

Investment

Type

Fund or Trust

Target

Wholesale, Institutional

Certified Since

2017

Asset Classes

Diversified / Multi-asset

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
  • Tree green background Sustainable land and agricultural management
  • Riaa icons 13 Sustainable transport
  • Riaa icons 31 Sustainable water

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

For Australian and international shares and Australian and international fixed interest, the Fund uses an active security selection process that combines sustainable and ethical criteria with Pendal's financial analysis. We actively seek exposure to securities and industries that demonstrate leading ESG and ethical practices and exclude companies or issuers not meeting the investable criteria. The sustainable and ethical criteria employed include factors such as: • environmental issues, • social practices, • corporate governance, and • ethical practices. The assets of the Fund are managed by Pendal together with a number of leading investment managers, such as AQR for international shares and AEW for international listed property securities. Pendal manages the asset allocation of the Fund. Pendal may implement asset allocation decisions away from the neutral position within the specified minimum and maximum ranges based on investment views. The Fund has assets that are denominated in foreign currencies. This means that changes to the Australian dollar relative to foreign currencies may affect the value of the assets of the Fund. The international fixed interest, international property securities and international alternative investment exposures are fully hedged to the Australian dollar to the extent considered reasonably practicable. Generally, the Fund’s international share exposure will not be hedged to the Australian dollar. The Fund may use derivatives to achieve its investment objective and to gain exposure to assets and markets. Derivatives may also be used to reduce risk and can act as a hedge against adverse movements in a particular market and/or in the underlying assets. Sustainable and ethical assessment process Sustainable and ethical investment practices are currently incorporated into the Australian and international shares and Australian and international fixed interest components of the Fund. All other investments by the Fund are not assessed for sustainable and ethical investment practices. The Fund invests in the securities that are considered to meet the Fund’s sustainable and ethical criteria. Specifically, the assessment process 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 company’s operations • Provision of regular and appropriate training • Whistleblower policies and procedures • Ethical conduct and performance of employees and officers - the extent to which companies 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 The Fund will not invest in companies 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, • directly mine uranium for the purpose of weapons manufacturing, • extraction of thermal coal and oil sands production. We consider that a company or issuer has a material business involvement in an activity if 10% or more of its total revenue is derived from that activity. Pendal actively engages with the management of the companies and issuers we invest in to manage risk, effect change and realise potential value over the long term. Fixed interest securities issued by Government related entities are generally considered to meet the Fund's sustainable and ethical investment guidelines. Investments are reviewed regularly to ensure they remain within guidelines relating to sustainable and ethical considerations. If the review process identifies that an investment ceases to comply with the investment guidelines of the Fund, the investment will usually be sold as soon as reasonably practicable having regard to the interest of the investors, but this may vary on a case by case basis. The criteria applied to the Fund’s investments may exclude some industry sectors, companies or issuers from the Fund’s ‘investable universe’. For this reason the Fund’s performance may vary when compared to other funds that do not apply sustainable screens in their investment process. This risk should be considered when deciding whether to invest in the Fund.


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.
 
 The Fund will not invest in companies 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,
  • directly mine uranium for the purpose of weapons manufacturing,
  • extraction of thermal coal and oil sands production.
We consider that a company has a material business involvement in an activity if 10% or more of its total revenue is derived from that activity.
 
 Positive screening means that we actively seek investments in industries and companies assessed as demonstrating and/or offering leading environmental and social practices, products or services. 

 Leading Industries
 Industries offering products and services that provide a direct benefit to social and/or environmental outcomes such as: 
  • Environmental management or remediation
  • Environmental technologies
  • Energy efficiency and renewable energy
  • Low-impact products or products that reduce ecological footprint
  • Sustainable buildings and property development
  • Sustainable land use and food production
  • Improved health and community wellbeing

Other products certified by the Responsible Investment Association Australasia (RIAA)

Pendal Sustainable Australian Fixed Interest Fund

Pendal Sustainable International Fixed Interest Fund

Pendal Sustainable International Share Fund

Pendal Sustainable Future Australian Share Portfolio

Pendal Sustainable Australian Share Fund

Pendal Sustainable Conservative Fund

Pendal Ethical Share Fund

Sign up to join the Responsible Returns newsletter