top of page

Sustainability Disclosure

The information below relates to ASIC Info 271, ‘How to avoid greenwashing when offering or promoting sustainability-related products.' You can find more information on this on the ASIC website.

Sustainability related statements
  • Carbon intensity - Total carbon emissions (scope 1 and 2), measured in millions of tonnes of carbon emissions, relative to a company’s size. Pella measures carbon intensity in two ways: (i) carbon emissions to total net revenue; (ii) carbon emissions to enterprise value. Scope 1 emissions are carbon emissions that occur from sources controlled or owned by an organisation. Scope 2 emissions are indirect carbon emissions associated with the purchase of electricity, steam, heat, or cooling.

  • Sustainability - Pella defines sustainability as “activities that can continue over the long term because they do not come at a material cost to current or future generations.”

  • Responsible Investing - Pella defines Responsible Investing as investing with equal emphasis on four components: (i) The Investment Process; (ii) Returns; (iii) Risk; (iv) Sustainability.

Sustainability Strategies
  • ESG Integration - Explicitly include ESG risks and opportunities into analysis and investment decisions based on a systematic process and appropriate research sources.

  • Negative/Exclusion Screening - Exclusions based on activities considered not investable due to misaligned values.

  • Norms-Based Screening - Exclude companies that do not meet minimum standards of business practices. Pella adheres to UN Global Compact and will exclude companies that severely breach the ten principles underlying the Compact if the company does not implement appropriate remediation action. This will be assessed on a case-by-case basis by Pella, and we will document the rationale behind our actions.

  • Sustainability-Themed - Specifically targeting investment themes, such as low carbon intensity.

  • Stewardship - Executing shareholder rights and fulfilling fiduciary duties to signal desired corporate behaviours guided by ESG considerations.

  • Positive Impact - Invest in companies that generate at least 20% of the net revenue from activities that have a positive impact on people, society, or the planet. Pella defines positive impact according to six themes: (i) Cleaner Energy; (ii) Conservation; (iii) Improved Health; (iv) Safety; (v) Inclusiveness; (vi) Economic Participation.


Methodology for integrating sustainability-related considerations

Pella incorporates six strategies to implement sustainability factors into investment and stewardship decisions, including: (i) ESG Integration; (ii) Negative Screening; (iii) Norms-Based Screening; (iv) Sustainability-Themed; (v) Stewardship; (vi) Positive Impact.

ESG Integration, Negative Screening, and Norms-Based Screening are applied at the start of the investment process to exclude companies that do not satisfy Pella’s sustainability requirements. These factors are also tracked during an investment’s holding period to ensure ongoing compliance.

A complete list of Pella's Negative Screening list, including the revenue materiality, is available on this website on the Exclusion List page.

Pella’s approach to Sustainability-Themed is to require the carbon intensity of its funds to be at least 30% lower than the carbon intensity of the Benchmark at all times. Pella relies on MSCI’s calculations of carbon intensity, which is subject to assumptions made by MSCI. For more information on MSCI’s carbon intensity calculation methodology please visit MSCI Carbon Footprint Index Ratios Methodology.

Pella targets Stewardship for all its fund’s holdings throughout the holding period. This includes voting in all shareholder meetings and, where suitable, engaging with investee companies via letters, emails, or discussions to improve their ESG practices.

Pella seeks to invest in companies that deliver Positive Impacts whenever they satisfy Pella’s other sustainability and financial requirements. Pella is required to have at least 10% of its funds invested in positive impact companies and is required to invest in positive impact companies that have a MSCI-provided ESG rating of B or BB.

Reliance on sustainability-related metrics

Pella relies on MSCI to provide the ESG ratings, ESG scores, and carbon intensity for its funds’ holdings and to calculate its funds’ benchmark (MSCI ACWI) aggregate MSCI ESG score and carbon intensity, and to a lesser extent Refinitiv ESG research for additional due diligence. One limitation with this approach is that MSCI does not research every company that Pella might research. In these cases, Pella will conduct its own ESG research and encourage MSCI to review the company in question. Pella’s uses publicly available information taken from annual reports, company conference calls, media reports, and communication directly with companies when conducting its proprietary ESG research. Below is a non-exhaustive summary of the common ESG issues Pella considers.


  • Climate change – uranium & nuclear power, fossil fuels, carbon footprint

  • Sustainability – renewable energy, deforestation

  • Biodiversity and water – management of water resources, GMO

  • Pollution & waste – waste reduction, recycling, water treatment, packaging materials


  • Human capital – workplace health & safety, labour standards

  • Product liability – product safety, privacy & data security, chemical safety

  • Human rights – liberty, affordable housing, equality

  • Community standards – animal cruelty, alcohol, junk food, weapons


  • Management structure – director independence, remuneration, board entrenchment

  • Governance – compliance, board accountability

  • Ethics – transparency, corruption, tax strategy


It is rare for Pella to invest in companies without a MSCI ESG rating as Pella also limits the size of individual positions that are unrated to 3% per position, and at least 70% of the portfolio must be invested in companies with a MSCI ESG rating of BBB or better.

Pella relies on ISS Corporate Governance for shareholder voting research, recommendations, and vote submissions.

Pella undertakes its own fundamental analysis to determine if a Norms-Based breach has occurred and to determine if a company satisfies Pella’s Positive Impact requirements. This analysis is conducted using publicly available information taken from annual reports, company conference calls, media reports, and communication directly with companies. A key focus of this analysis is understanding if a severe controversy occurred and what the company is doing to rectify it. The outcomes are based on Pella’s judgment and there is a risk that investors could reach a different conclusion to Pella.

Sustainability Target

Pella targets delivering superior sustainability to its Benchmark (MSIC ACWI). To deliver this Pella aims to deliver superior outcomes across several sustainability strategies, including:

  • ESG Integration – Pella targets the aggregate ESG score of its funds to be higher than the aggregate ESG score of the Benchmark. In both cases MSCI ESG scores are applied.

  • Negative Screen – Pella excludes companies that generate revenue from eleven activities that Pella believes come at a material cost to current or future generations. These activities are listed on the Exclusion List page of this website.

  • Norms-Based Screen – Pella excludes companies whose revenue might not be harmful to current or future generations, but their behaviour is a severe breach of globally accepted behavioural norms. This behaviour may be implicit or complicit. At present, Pella defines severe breaches as forced labour/slavery; child labour; child pornography, genocide, or ethnocide.

  • Sustainability Themed – Pella targets creating a portfolio with carbon intensity (measured relative to net revenue and enterprise value) at least 30% lower than the Benchmark’s carbon intensity.

  • Stewardship – Pella targets voting in 100% of its investee shareholder votes. Pella may decide to vote on ESG-related issues on a case-by-case basis recognising that social responsibility issues may impact the value of shareholders’ investment. Generally, Pella does not apply specific socially responsible investment or methodologies screens, unless specifically directed by the client. Pella targets voting in favour of resolutions that the managers believe results in position ESG outcomes.

Pella measures its funds’ performance relative to the sustainability targets daily and reports on the progress monthly and quarterly. In addition, Pella undertakes a comprehensive annual review of its funds’ performance relative to the sustainability targets and reports the performance in the Annual Responsible Investing Report.

Where to get more information

Visit the Sustainability section of this website for more information. In addition, the Responsible Investment policy provides a detailed approach to Pella’s approach to sustainability. Finally, Pella’s Annual Responsible Investing Report offers a complete report on Pella’s sustainability track record.

bottom of page