The Perpetual Wholesale Ethical SRI Fund aims to:
· provide long-term capital growth and regular income through investment in quality shares of ethical and socially responsible companies.
· outperform the S&P/ASX 300 Accumulation Index (before fees and taxes) over rolling three-year periods.
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 companies meeting certain ethical criteria can be held in the portfolio; and
2. An SRI screening process applies to the product to ensure that only companies meeting certain SRI/ESG criteria can be held in the portfolio.
Companies pass must pass both these screening processes to be considered for investment.
1. Ethical Screening Process
Our ethical criteria include avoiding investment in companies that derive a material (5% or more) proportion of their revenue 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 (all links and material to reflect this 0% threshold will be updated 1st April 2021).
Such companies fail this screening process and are therefore excluded from the product’s investment universe. The remaining companies 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.
Companies 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. Companies with negative total scores fail this screening process and are therefore excluded from the product’s investment universe. The remaining companies become allowable investments.