Firetrail’s investment process applies environmental, social (including labour standards) and corporate governance (‘ESG’) principles to the benefit of its investors. This also contributes more broadly to efforts to build a more stable, sustainable and inclusive economy. Firetrail combines quantitative ESG benchmarking with a common sense, case by case qualitative approach to assessing individual corporate ESG performance. In a quantitative sense, we integrate ESG ranks into the investment process (screens, stock/industry research notes and portfolio scores). This includes company-level measurements of greenhouse gas (GHG) emissions to understand and benchmark the portfolio’s carbon intensity. As a general framework, Firetrail evaluates individual companies on the basis of environmental, social and governance factors, and ESG data is sourced from a variety of third-party providers. In relevant candidate investments, Firetrail generally look for minimum acceptable standards, peer group leadership and a high level of disclosure or, in areas of weakness, evidence of improvement. In instances where the investment process identifies that a company is not meeting minimum acceptable standards, Firetrail may look to engage with the company and influence its thinking with respect to these matters. In instances where Firetrail believes a company demonstrates wilful disregard for ESG principles, they may choose to avoid or divest. In this sense, companies responsible for the manufacture, production or distribution of goods and services harmful to human health and wellbeing are excluded from the portfolio.

The Fund invests in global listed equities which meet our S3 investment criteria, being companies with: 

• S1: Sustainable business models 
• S2: Sustainable earnings 
• S3: Sustainable positive change

The screening process is inclusive rather than exclusionary, focusing on the specific attributes that we look for in both current and future sustainability leaders.  We categorise companies into Positive Change Opportunity ‘themes’ and ‘sub-themes’ (below). Using our proprietary screens, we also identify sustainability laggards which are excluded from the portfolio. Positive Change Opportunity themes and sub-themes:

1. Health & Wellbeing
   • Healthy Lifestyles
   • Safe Environments & Health Enhancement
2. Innovation & Equality
   • Diversity & Enablement
   • Technology
3. Climate Impact
   • Carbon Reduction
   • Energy Efficiency & Transition
4. Sustainable World
   • Circular Economy
   • Food Security & Renewable Resources

These themes draw from the United Nation’s Sustainable Development Goals (SDGs) as a broad framework and recalibrate them to describe the global investment opportunity set. Firetrail applies environmental, social (including labour standards) and corporate governance considerations when selecting, retaining and realizing investments in the Fund. The Fund looks to identify and invest in companies that it considers to have, or are moving toward, resilient, and sustainable business models and practices. During this stage, Firetrail looks to engage with the company under research to determine if it meets ESG standards.We also maintain a portfolio carbon footprint at least 30% below the MSCI World Index. As we engage with our portfolio companies and they progress along their Positive Change journey, we forecast the portfolio will have a carbon footprint at least 50% below the MSCI World Index in 5 years time.