Pella applies quantitative & qualitative sustainability criteria in its investment process
Pella's criteria to ensure low carbon intensity include:
Exclusions - Pella excludes fossil fuel miners, and electricity generators that rely on fossil fuels.
Portfolio carbon intensity* - Pella requires the carbon intensity of its portfolios to be at least 30% below that of the Market.
Pella Funds Management aims to be a carbon neutral company by 2023.
*measured as tonnes of carbon emissions per million dollars of revenue
Pella maintains an exclusion list of activities we consider unnecessarily harmful to people, the environment, or animals. Any company that is directly involved in these activities is excluded from our investment universe, meaning we will not invest in them.
You will never find casinos, thermal coal miners, tobacco companies, private prisons, weapon manufacturers, among other activities in our portfolios.
A full list of our excluded activities is included in this website.
Requires positive impact & corporate engagement
Excluded from investment universe
>30% of portfolio
>70% of portfolio
Requires positive impact
Environmental, Social & Governance ('ESG') - Portfolio Criteria
Pella has portfolio ESG requirements that refer to MSCI ESG ratings, which include:
>30% of the portfolio must be invested in companies with ESG ratings of either AAA, AA, or A.
>70% of the portfolio must be invested in companies with ESG ratings of either AAA, AA, A, or BBB.
Cannot invest in any companies with a CCC-rating.
Can only invest in companies with a B-rating subject to the company generating greater than 50% of its revenue from activities that have a positive impact on society or the planet and Pella engaging with the company to improve its ESG performance.
Can only invest in companies with a BB-rating subject to the company generating greater than 20% of its revenue from activities that have a positive impact on society or the planet.
Portfolio ESG rating must be greater than the Market's ESG rating.
Maximum Position Weight *
AAA, AA, A, BBB
* at cost
Environmental, Social & Governance ('ESG') - Position Size Criteria
Pella incorporates ESG criteria when weighting positions in its funds.
The position size of companies included in the Core segment with high ESG ratings can be up to 5%.
The fund cannot invest in any stocks with an ESG rating of CCC.
All other position sizes can be a maximum of 3%.
Positive Impact Themes
Pella invests in positive impact companies whenever they satisfy Pella's investment criteria and has identified six themes that are target rich environments for these stocks:
Conservation and resource efficiency
Pella targets engaging with 100% of its portfolio companies at least annually. One of Pella's core objectives in these engagements is to seek to improve the ESG credentials of several of the investments.
Pella votes in all of its investments' AGMs and other shareholder meetings