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ESG & Sustainability

Perennial believes that environmental, social and governance (ESG) issues can impact the performance of companies. Therefore, ESG & Sustainability performance can influence the returns generated by our investment portfolios. We are dedicated to integrating ESG & sustainability into our investment decisions and improving our own corporate ESG & Sustainability.

Our Approach

Our approach is guided by our four pillars of ESG integration:

1. ESG&E

1. ESG&E

The ESG&E Score is a proprietary scoring system established and run in-house by the Perennial sustainability team with input and insight from the sector analysts. Each company is given a score for Environment, Social and Governance performance as well as a score for company Engagement. Each portfolio must have an ESG&E score above the weighted average benchmark score.
2. Stewardship

2. Stewardship

Engagement with companies to discuss material ESG issues, risks and opportunities.

As responsible stewards of capital, we use our voting discretion in the best interests for our clients.

3. Exclusions / Negative Screens

3. Exclusions / Negative Screens

Each portfolio has negative screens, excluding investment in certain industries.
4. Portfolio Management

4. Portfolio Management

The company’s ESG performance and characteristics are one of the considerations in portfolio construction. Stocks with ESG&E related concerns are either unlikely to be held or have a lower weight in the portfolio relative to other stocks with similar characteristics.

Striving For Market Leading ESG Integration

Perennial is dedicated to leading ESG integration in all investment products. In 2020 and 2021, Perennial was recognised by RIAA as a “Responsible Investment Leader”. The reports below show some of our undertakings:

Perennial’s second annual ESG report for the 2021 financial year.

Engagement activities on Environmental, Social & Governance stewardship over 2020.

Our third annual listed corporate Better Future Survey Report, which aims to take the ESG pulse of ASX listed companies.

Our Commitment

Perennial has been a signatory to the United Nations backed Principles for Responsible Investment since 2009. We report our progress annually in the PRI signatory reporting tool. You can read our transparency report here. We received A’s across all areas in the 2020  and 2021 assessment report.

Perennial is a supporter of the Task Force on Climate Related Financial Disclosures (TCFD) and encourage companies to report under the initiative.

Perennial is a signatory to the 30% Club, which campaigns for at least 30% of women on ASX300 boards. Where possible, we engage with companies to have equal gender representation on the board.

Perennial supports Climate Action 100+ which is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.

Perennial is a founding signatory of Investors Against Slavery & Trafficking ASIA-Pacific (IAST APAC) and on a working group to assist companies to identify and take action on modern slavery and human rights issues in their supply chain.

Perennial is a member of Responsible Investment Association Australasia (RIAA) and is recognised as a Responsible Investment leader by RIAA in 2020 and 2021. Our Better Future Trust is a certified Responsible Investment product.

Responsible Investments Working Group

We have a Responsible Investments Working Group which includes representatives across investment teams as well as from our operations and corporate functions. It is engaged in not only improving our approach to responsible investing but also developing our corporate strategy in relation to ESG, sustainability and responsibility.

We are constantly seeking to improve our performance in this area, and current initiatives include:

  • We source the electricity that we consume from 100% renewable energy.
  • We carbon offset staff flights.
  • We participate in building recycling programs and are engaging building management to improve sustainability outcomes.
  • We have mandatory ESG training for all staff members (including non-investment staff) each year.
  • Our primary cause that we support is the Humpty Dumpty Foundation which provides life-saving medical equipment for sick and injured children.
  • Tree planting initiative – find out more.

One Tree Planted

Stewardship

In keeping with our philosophy of putting the long-term interests of investors first, our Responsible Investment Policy is designed to assist us to improve and uphold the governance of the entities in which we invest, as well as the competence and integrity of management.

Engagement & Proxy Voting

Perennial uses active stewardship to contribute to improving and upholding the environmental, social and governance (ESG) practices of entities we invest, so that they are managed with competence and integrity. We uphold the long-term interests of shareholders through discussions and engagement with companies and/or exercising our proxy voting responsibilities.

Perennial uses its proxy voting responsibilities for the best interests for our clients. Although we have the support of proxy voting research, we form our voting decisions independently based on our view of the management of, and corporate governance of the entity. On a semi-annual basis, we publish a summary of our proxy voting record. To see the record for 6 months to 30 June 2021, please click here.

Perennial Better Future

At Perennial, we have a dedicated ESG strategy which invests in companies that are shaping a better future. The strategy is available through:

Perennial’s commitment to ESG

For further information on our commitment to ESG or tailored solutions available, talk to a Client Services Representative today.