Aegis Asset Management Introduces ESG Checklist... "Considering Sustainability in Investments"

[Asia Economy Reporter Hwang Yoon-joo] Aegis Asset Management has established a process that makes it easier and more thorough to review the sustainability level of real assets before investment.

On the 5th, Aegis Asset Management announced that it has developed an inspection process to manage ESG (Environmental·Social·Governance) risks at the preliminary stage of investment in real assets such as real estate and infrastructure.

This process consists of procedures to identify and analyze ESG risks of investment targets by preparing inspection forms such as the 'ESG Screening Checklist' and the 'ESG Checklist.'

The ESG Screening Checklist implements 'Product/Industry-based Screening,' which restricts investments in specific industries or projects, and 'Norm-based Screening,' which limits transactions with entities that do not comply with internationally accepted standards.

First, Product/Industry-based Screening restricts investments in antisocial and anti-environmental industry facilities such as weapons, tobacco, alcohol, gambling, and fossil fuels. Norm-based Screening limits transactions with parties that do not comply with the ten principles related to human rights, labor, environment, and anti-corruption of the UN Global Compact. Aegis Asset Management plans to divide screening targets into 'unconditional exclusion,' where investment is not allowed, and 'selective exclusion,' where investment is possible if improvement is feasible, and decide whether to proceed with the investment accordingly.

The ESG Checklist is composed of inspection items to identify at the early stage of investment whether it is difficult to secure ESG-related data or information or whether there is a possibility of ESG-related risks occurring. It is broadly divided into environment, social, and governance categories, and answers to questions about individual detailed areas are given in multiple-choice (selective) form.

Portfolio managers must submit the two inspection forms to the Risk Review Committee, which evaluates the risk level of investments, once before and once after due diligence. If the analysis of the checklists raises concerns about ESG risks, the portfolio manager must prepare control measures.

This content was produced with the assistance of AI translation services.