Sustainable, Responsible &/or ESG Policy:

The sustainable, responsible and ESG policy varies for each of the 4 active Ethical Profiles in the Parmenion Strategic Ethical Active solution:

• Responsible Leaders Profile A invests in predominantly active funds which aim to identify companies that take a responsible approach to a wide range of environmental, social and governance issues. A positive bias will be applied within fund selection with a limited emphasis on exclusionary criteria.
• Sustainability Leaders Profile B invests in predominantly active funds which aim to identify companies whose products and services help us to transition to more sustainable lifestyles. A positive bias will be applied within fund selection with a limited emphasis on exclusionary criteria.
• Ethical Leaders Profile C invests in predominantly active funds which aim to balance positive investment opportunities with a keen awareness of ethical concerns. A disciplined exclusionary policy will be applied to fund selection in keeping with the portfolios screening criteria.
• Traditional Ethical Leaders Profile D invests in predominantly active funds with a strict avoidance based strategy and will only invest in funds that clearly meet the portfolios traditional ethical screening criteria. There may be some positive investment policies adopted but the primary focus is on avoidance.

The policy for the Passive ESG solution is that funds and ETFs selected are predominantly passive and will use a blend of approaches combining; the assessment of company ESG ratings, carbon risk, engagement and also aiming to avoid contentious areas where possible. Managers of selected funds and ETFs will be expected to demonstrate positive stewardship with a focus on engagement and voting on ESG matters.

Process:

Parmenion’s approach to constructing investment solutions is driven by risk, to give investors greater confidence in their investment outcome.  The strategic asset allocation for each Risk Grade within the 4 active Ethical Profiles and the Passive ESG solution is optimised annually, using an in-house model based on 20 years of historical data as well as forward-looking capital market assumptions.

Fund selection within each asset class follows a rigorous process.  Parmenion aims to invest in ‘leaders’ in their respective fields: we aim to idenitfy funds that are managed in line with best practice standards and able to offer investors a high level of reassurance that their ethical objectives are being met for each of the 4 active Ethical Profiles and the passive ESG solution.

Each active fund held in the solutions is reviewed in detail by the Parmenion Investment Team every year, which involves a thorough assessment of quantitative risk and return analysis, in addition to qualitative information obtained through a meeting with the portfolio manager (including investment philosophy and process, team, positioning and performance attribution, sell discipline, ESG integration, voting and engagement, risk controls and liquidity analysis).  Each passive fund is reviewed by the Parmenion Investment Team every six months, which takes the form of a quantitative assessment of factors (including costs, tracking error and tracking difference). 

The Parmenion Investment Team has access to ESG data from Morningstar Direct, provided by Sustainalytics, as an additional source of information to monitor funds' ESG credentials - for example their carbon emissions vs the peer group or benchmark index, and their exposure to any companies with product involvement in contentious areas such as tobacco production.  The team also has access to FE analytics, for general fund data as well as some ESG information (Climetrics and ISS fund rating, provider commitments and exclusions).

In addition, Parmenion has an independent specialist Ethical Oversight Committee, which is a group of experienced members who are experts in ethical investing.  The Ethical Oversight Committee reviews every active fund and every passive provider held in the solutions every 2 years, to ensure the portfolios continue to deliver on clients’ financial and ethical needs.  The assessment covers aspects including ESG approach, team and resources, membership of ESG groups or collaborations, ESG themes, any positive or negative screens, fossil fuel policy, voting and engagement activity and transparency and disclosure.

Resources, Affiliations & Corporate Strategies:

The investment team at Parmenion is well-resourced and comprises of investment managers and analysts, who run the Parmenion Strategic Ethical Active solution and Parmenion Strategic Passive ESG solution, alongside Parmenion’s other investment solutions.  Our in-house investment managers hold a variety of investment qualifications, with four members of the team holding the CFA Certificate in ESG Investing.  The solution has three dedicated co-investment managers and a dedicated investment analyst. 

Parmenion’s independent Ethical Oversight Committee oversees the Ethical Profiles.  The Committee is made up of industry specialists with significant knowledge and experience in ESG, sustainable and ethical investing and the retail marketplace.  The Committee attends formal meetings with Parmenion representatives on a quarterly basis, as well as providing assistance with ad hoc queries in between meetings as required.

We are very proud to have won various industry awards for our platform, including the prestigious Schroders Platform of the Year award in 2022.  Our Parmenion Strategic Ethical Active solution has also won various awards, for example, our 4 active Ethical Profiles have each been awarded a 5 Diamond Rating from defaqto.

Parmenion is a signatory of the UN Principles for Responsible Investment.

SDR Labelling:

Not eligible to use label