The Perpetual Ethical SRI Credit Fund aims to provide regular income and consistent returns above the Bloomberg AusBond Bank Bill Index (before fees and taxes) over rolling three-year periods by investing in a diverse range of income generating, ethical and socially responsible assets.
Perpetual utilises a strategy for screening ethical and socially responsible investments.
The following two screening processes ensures the product remains ‘true to label’ (Ethical/SRI):
1. An ethical screening process applies to the product to ensure that only issuers meeting certain ethical criteria can be held in the portfolio; and
2. An SRI screening process applies to the product to ensure that only issuers meeting certain SRI/ESG criteria can be held in the portfolio.
Issuers pass must pass both these screening processes to be considered for investment.
1. Ethical Screening Process
Our ethical criteria include avoiding investment in issuers that derive a material proportion of their revenue (5% or more) in total from the following activities:
- the manufacture or sale of alcohol
- the operation of gambling facilities or the manufacture of gambling equipment
- the manufacture or sale of tobacco*
- uranium and nuclear
- military armaments*
- fossil fuels (upstream)
- genetic engineering
- animal cruelty (cosmetic testing)
*For involvement in highly controversial activities (production of tobacco, tobacco-based products and the development and production of controversial weapons) a 0% revenue threshold is applied.
Such issuers fail this screening process and are therefore excluded from the product’s investment universe. The remaining issuers are then subject to the SRI screening process.
2. SRI Screening Process
Our SRI criteria are based on a company assessment on a range of ESG/SRI issues.
Issuers are scored in relation to a number of criteria, including the environment, labour standards, human rights, supply chain, corporate misconduct, community commitment and ethics. Negative behaviour attracts negative scores while positive behaviour attracts positive scores.
All scores are then totalled. Issuers with negative total scores fail this screening process and are therefore excluded from the product’s investment universe. The remaining issuers become allowable investments.