Pharus Sicav Best Regulated Companies integrates the ESG principles into the Prospectus
Pharus Sicav Best Regulated Companies fund, launched in April 2019 and characterized by a unique strategy focused on infrastructures within regulated sectors, such as electricity transmission and distribution, water and gas transport, gas storage and regasification, from December 1, 2020 integrates the ESG principles (acronym of Environmental, Social, Governance) and the related analysis criteria into the Prospectus, to meet the needs linked to the world of sustainable investments.
We are in fact in a historical moment in which sustainability is an essential factor both for consumers, and consequently for the investors, who are not only increasingly oriented towards sustainable solutions, but also require transparent information, and for the companies offering products and services.
The common purpose of today's society is to address the challenges caused by climate change and reduce forms of poverty or inequality, ensuring the environmental, economic and social sustainability of the world population in the long term.
Today at Pharus we are aware that focusing the attention exclusively on financial returns and on fundamentals of sectors and companies is a reductive exercise.
It is clear that the ability of a company to create value, generate opportunities and reduce risk exposure must take into account ESG performance, as well as economic and financial indicators, as they will increasingly play a fundamental role in determining the risk and return on an investment.
In fact, several researches have proven a positive relationship between sustainability and performance, necessary factors in order to create a virtuous circle between the financial sector and the real economy: the greater the number of investors who integrate ESG elements in the analysis of securities, the greater the incentive of listed companies to adopt these criteria in the management of their activities.
As of today, the certified average rating of the ESG portfolio of the Pharus Sicav Best Regulated Companies is AA, and will be certified and monitored by Nummus, an independent external ESG evaluator, on a quarterly basis, in order to guarantee its performance in terms of sustainability and returns in the long term. The portfolio and securities analysis are based on inclusion and exclusion criteria.
For the Inclusion Criteria, 60% of scoring weight is determined by Environment factors. In particular, it will be considered eligible the companies which limit percentage of revenues coming from business with high carbon emissions, water stress, impact on the climate, toxic emissions and waste, in favour of companies offering and developing renewable energies.
The remaining 40% of the scoring is determined by the Social and Governance factors, such as, (but not limited to), treatment of employees, board structure, product safety, business ethics.
On the other hand, Exclusion Criteria are:
- involvement in controversial weapons, such as anti-personnel mines, biological and chemical weapons, cluster weapons, depleted uranium, nuclear weapons and white phosphorus;
- tobacco producers;
- disrespect for the principles of the United Nations Global Pact (UNGP);
- companies operating in the adult entertainment sector;
- companies operating in the gambling sector.
The contents of this informative message are the result of the free interpretation, evaluation and appreciation of Pharus Asset Management SA and constitute simple food for thought.
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