FNCE90087 Minor ESG scoring framewor

Minor Assignment 2024 - FNCE90087

Due September 3rd 11:59 pm

Description of Assignment:

There are two parts to this assessment described in detail below. In Part 1 you are required to create an ESG scoring framework in line with the Responsible Investment policy you are provided. In Part 2 we provide you with a list of companies. You are required to use the framework from part 1 to analyse company suitability for this portfolio and make a recommendation (from most suitable to least suitable).  

You should:

• undertake primary research (in other words, analyse the companies’ disclosures yourself and don’t rely primarily on others’ analysis or scores),
• use headings and sub-headings, 
• make clear references to external sources/benchmarks in the body of the assignment or with footnotes, and
• use quantitative information where it exists and put it in a table or graph.

The report should be 1000 (± 100) words. Footnotes which only provide a reference and bibliographies do not count towards the word count, but all other words (including substantive footnotes, tables, graphs etc.) do. If you go over the word count, the marker will stop reading at the point at which the word count is reached, and you will not receive marks for anything that comes after that point.

If you are referencing company information from an annual report for example it is adequate to reference the information in brackets or footnote by – “Company A 2024 Annual Report.”

Assessment tips:

• Companies present ESG data in different ways in different reports. Most common ways: Sustainability Reports, Annual Reports, Sustainability ‘Supplements’ or company’s ESG data centre.
• ChatGPT Tip: Don’t use it! It provides a generic, boring answer and when you read hundreds of versions of the same assignment it becomes pretty clear pretty quick who didn’t bother using their brain!

We have created an assessment rubric to help you understand what makes a good assignment here ->>  2024 Minor Assignment Rubric – FNCE90087 FINAL.pdf

Actions

The assignment is to be submitted via Turnitin on CANVAS. A plagiarism check will be performed and if plagiarism is identified there will be consequences in accordance with the University’s policies. Late assignments will not be accepted unless you have been granted an official extension or special consideration. Assessment extensions and special consideration is granted through the faculty (not the lecturers), and you must complete the application for an extension before the original due date.

ASSESMENT QUESTIONS

Responsible Investment Policy – SustainCap Investors

At SustainCap we fundamentally believe that integrating Environmental, Social and Governance (ESG) issues is an important element of our investment process to ensure we deliver long-term returns for clients.

We expect that companies that effectively manage significant environmental, social, and governance (ESG) risks and opportunities throughout their operations and supply chains, impacting employees, suppliers, customers, communities, and the environment, will enhance value for our clients over the long term.

Our broad approach to responsible investment involves considering material ESG risks and opportunities in the investment decision-making process and actively seeking to influence improved outcomes through our stewardship activities.

Guiding Principles

1. Integration of ESG Factors: We systematically integrate material ESG factors into our investment analysis and decision-making processes across all asset classes. This integration will help us identify risks and opportunities that traditional financial analysis may overlook.
2. Engagement and Voting: We will actively engage with company board and management on ESG issues and exercise our voting rights as shareholders to promote best practices. Engagement will be 代 写FNCE90087 Minor  ESG scoring framewor guided by clear objectives and escalation strategies where necessary.
3. Risk Management: We recognize that ESG factors can affect the performance of investment portfolios. Therefore, we will assess and manage these risks alongside traditional financial risks such as tracking error to enhance long-term returns and protect shareholder value.
4. Policy Advocacy: We will support policies and regulations that promote sustainability, transparency, and responsible corporate behaviour. We will engage with policymakers and industry stakeholders to advocate for frameworks that align with our values and objectives.

Key themes

1. Climate Change: Our investment strategy includes rigorous analysis of Climate Change risks and opportunities. We prioritise investments in companies that are developing climate solutions and companies with low emissions, net zero targets and credible plans to reach that target.
2. Workplace Health and Safety: We prioritise investments in companies that uphold high standards of Workplace Health and Safety. Our integration process includes due diligence of companies’ safety performance data. We engage with companies to advocate for continuous improvements in Workplace Health and Safety standards and performance.
3. Board Composition: We believe that governance is material for all companies no matter the sector. As such, board composition is essential to our analysis of Governance factors for all companies. We prioritise investments in companies with a majority independent board, an independent chair, relevant skills and experience and diversity.

Part 1 Create a numerical ESG scoring framework to help implement this policy. The framework should explain how to score companies on each of the 3 key themes, how to come to an overall score for each company and any other relevant considerations required to ensure robust integration of ESG into the investment decision. Explain your approach. (4 marks, 100-200 words)

Part 2 The portfolio manager is considering adding one of the following ASX-listed companies to the portfolio.

Stock	Ticker
Pilbara Minerals	PLS
Fortescue	FMG
Lynas Rare Earths	LYC

Analyse and compare these 3 companies against your framework in Part 1. Make a recommendation about which company to add to the portfolio by ranking them (from 1 to 3) based on their suitability for a portfolio that is managed under the Responsible Investment policy you’ve been provided. Justify your answer. (16 marks, 800-900 words)