LE2: Responsible Investment Strategy – Above Green

(1.65 points)

Intent

The intent of this indicator is to assess and categorize the sustainable investment strategies adopted by the entity. The Global Sustainable Investment Review (GSIA) have standardized seven sustainable investment strategies which have emerged as a global standard of classification. Alignment with standardized responsible investment strategies provides more valuable benchmarking information for investors.

Requirements

Select Yes or No: If selecting Yes, select applicable sub-options.

Does the entity have a sustainable investment strategy?

Yes
- The strategy incorporates the following approaches (multiple answers possible)
  - Corporate engagement and shareholder action
  - Impact/community investing
  - Integration of ESG factors
  - Positive/best-in-class screening
  - Negative/exclusionary screening
  - Norms-based screening
  - Sustainability themed investing
- Describe the strategy and how it is being implemented (for reporting purposes only) (maximum 250 words)
- The strategy is:
  - Publicly available (Provide applicable evidence in file upload or URL format)
  - Not publicly available
No
- Provide additional context for the answer provided (not validated, for reporting purposes only)
  
  ________________________

2020 Changes: Introduced a section covering whether the strategy is publicly available or not.

Prefill: This indicator has remained the same as the 2019 Assessment and has been prefilled with 2019 Assessment answers. Review the response and/or evidence carefully.

Open Text Box (for reporting purposes only): Explain the strategy and how it is implemented within the entity. The description may include the following criteria:

The description and scope of the strategy. The text can identify key ESG priorities and issues relevant to the entity. For example, what particular ESG issues are considered within a screening process.
Explanation around the extent of integration within the entity and next steps to foster further alignment.

Validation

Evidence: Document upload or hyperlink. The evidence should sufficiently support all the items selected for this question. If a hyperlink is provided, ensure that it is not outdated and the relevant page can be accessed within two steps.

Evidence requirements:

Must demonstrate each of the selected strategies from the above list.
The strategies must be formally adopted within the organization (i.e. evidence of implementation).
The strategies must be specific to the particular entity. If the strategy is set by the Fund Manager and applies to all their Funds, then this must be clarified in the evidence text box or cover page.

Evidence examples may include but are not limited to:

The entity’s policy document highlighting the existence of formal sustainable investment strategies.
Hyperlink to a section on the entity’s website describing the strategy.

Good practice example: Please refer to this link.

Document upload: Participants may upload several documents. When providing a document upload, it is mandatory to indicate where relevant information can be found within the document.

Scoring

This indicator is scored as a Two Section Indicator (i.e. Section 1: 'Elements' response and, Section 2: 'Evidence' response).

Section 1: Fractional scores are awarded to each strategy and then aggregated to calculate the section fractional score. It is not necessary to select all checkboxes in order to obtain the maximum score for this indicator. The strategies are not all assigned equal weights. The open text box, which describes the strategy and how it is being implemented, is for reporting purposes only and is not scored.

Section 2: ‘Evidence’ is mandatory for this indicator. Therefore, no points will be awarded unless the hyperlink and/or the uploaded document is considered valid, based on the evidence criteria stated above. Non-publicly available evidence is not assigned any extra fractional score, only publicly available evidence receives the final fractional score to earn maximum points. The evidence is validated which determines a multiplier, according to the table below:

Evidence: The evidence is manually validated and assigned a multiplier, according to the table below. The evidence must support the validation requirements. If any requirements are not met, the evidence may be partially accepted or not accepted depending on the level of alignment with the requirements.

Validation status	Score
Accepted	2/2
Partially accepted	1/2
Not accepted/not provided	0

Terminology

Corporate engagement and shareholder action: The use of shareholder power to influence corporate behavior, including through direct corporate engagement (i.e., communicating with senior management and/or boards of companies), filing or co-filing shareholder proposals, and proxy voting that is guided by comprehensive ESG guidelines.

ESG integration: The systematic and explicit inclusion by investment managers of environmental, social and governance factors into financial analysis.

Formally adopted: To set and communicate a strategy/target/program, at least internally, and having implemented or prepared actions to achieve this.

Impact/community investing: Targeted investments, typically made in private markets, aimed at solving social or environmental problems, and including community investing, where capital is specifically directed to traditionally underserved individuals or communities, as well as financing that is provided to businesses with a clear social or environmental purpose.

Negative/exclusionary screening: The exclusion from a fund or portfolio of certain sectors, companies or practices based on specific ESG criteria.

Norms-based screening: Screening of investments against minimum standards of business practice based on international norms.

Positive/best-in-class screening: Investment in sectors, companies or projects selected for positive ESG performance relative to industry peers.

Sustainability themed investing: Investment in themes or assets specifically related to sustainability (for example clean energy, green technology or sustainable agriculture).

Sustainable investing: An investment approach that considers environmental, social and governance (ESG) factors in portfolio selection and management.

References

Global Sustainable Investment Sustainability Alliance (GSIA), Global Sustainable Investment Review, 2018