ESG statement

Trillium Asset Management (Trillium) offers investment strategies and services that we believe advance humankind towards a global sustainable economy, a just society, and a better world. For nearly 40 years, the firm has been at the forefront of Environmental, Social, and Governance (ESG) thought leadership and draws from decades of experience focused exclusively on responsible investing. Trillium uses a holistic, fully integrated fundamental investment process to uncover compelling long-term investment opportunities. Devoted to aligning stakeholders’ values and objectives, Trillium combines impactful investment solutions with active ownership. The firm delivers equity, fixed income, and alternative investments to institutions, intermediaries, high net worth individuals, and other charitable and non-profit organizations with the goal to provide positive impact, long-term value, and ‘social dividends’.

At Trillium, we believe that the incorporation of ESG factors into fundamental financial analysis can help identify companies that appear best positioned to deliver risk-adjusted, long-term investment performance. Trillium’s investment approach goes beyond traditional exclusionary screening to focus instead on the positive integration of quantitative and qualitative ESG data alongside financial analysis. We evaluate and score companies on their ESG performance, which our analysts use to determine the companies available in our universe and the companies we wish to include in our buy-list. In addition to our ESG performance assessments based on various positive and negative screens, we consider shareholder advocacy, proxy voting, and public policy work as integral parts of our strategy.

Investment Team

Trillium’s investment team is led by John Quealy CPA, Trillium’s Chief Investment Officer (CIO). The team comprises 10 Portfolio Managers, four of which also carry lead analyst responsibilities, seven lead analysts who divide their coverage by sector, four generalist associates that support the lead analysts, and three environmental, social, and governance (ESG) Specialists that support the firm’s ESG research and proprietary scoring methodology. In addition to the investment team, Trillium has invested significant resources to accelerate adoption of ESG practices, with five dedicated shareholder advocacy professionals, led by Jonas Kron, Esq., who engage corporate issuers with direct communications and shareholder resolutions.

We believe the structure of our investment team is one of our key differentiators. Many of our competitors separate the ESG and fundamental research functions, with non-financial professionals doing the ESG research and non-ESG professionals doing the fundamental research. At Trillium, all of our analysts conduct both the ESG and fundamental analyses to help us better understand the interaction between ESG and fundamental risks and performance drivers.

ESG Case Studies 

B corp disclosure: The B Corporation award is not indicative of the future performance of Trillium Asset Management, LLC. Past performance is not a guarantee of future results. B Lab, a non-profit organization helping companies manage corporate social responsibility, recognizes businesses that have earned an overall score in the top 5% of approximately 4,000 Certified B Corporations in one of the impact areas assessed: community, customers, environment, governance, and workers.

AUM Breakdowns

Total managed assets (As of September 30, 2021)

% Best in class: 82%

% Exclusions: 100%

% ESG integration: 100%

% Normative screening: As a reporting output, we use TCFD rubrics on 100% of equity portfolios.

% Engagement and voting: 100%

% Impact investing: 1.5%

% Sustainability themed: 18%

Breakdown of your ESG-aligned assets in following asset classes (%)

% Equity: 82.2%

% Fixed income: 12.5%

% Other: 5.3%

 

 

Links and documents
– Trillium Advocacy Dashboard
– Our Holistic ESG-Integrated Investment Approach
– ESG Integration & Criteria
– 2021 Proxy Voting Guidelines
– Trillium’s Approach to Shareholder Engagement
– Our Approach to Investing in Energy and Power
– UNPRI Report
– Active Portfolios, Global Impact: Putting Assets Into Action Since 1982
– Trillium’s Approach to Investing in Energy and Power

Funds to watch

Name Ratings ISIN Domicile Description
Trillium ESG Global Equity Fund (US 40-Act Mutual Fund) N/A N/A U.S.

The Trillium ESG Global Equity Fund is designed to address the risks and opportunities created by the increasing constraints on natural capital. Since 1999, we have searched the globe for companies that meet a dual mandate: environmental leadership and financial quality. Our rigorous selection criteria is fossil fuel free and integrates financial and ESG research to seek high quality growth companies at a reasonable price, resulting in an equity portfolio that seeks positive risk-adjusted return.

 

Trillium ESG Global Equity Fund may invest in foreign securities, which are subject to the risks of currency fluctuations, political and economic instability and differences in accounting methods. These risks are greater for investments in emerging markets. Investing in foreign securities is riskier than investing in domestic securities. The fund invests in smaller companies, which involve additional risks such as limited liquidity and greater volatility. Trillium ESG Global Equity Fund’s environmental policy could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have an environmental policy. There are no assurances that the fund will achieve its objective and/or strategy.

 

The fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 866-209-1962 or click the following link (https://www.trilliuminvest.com/statutory-documents/trillium-esg-funds-prospectus).

 

Mutual fund investing involves risk; principal loss is possible. The environmental policy of the Funds could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have an environmental policy.

 

The Trillium Funds are distributed by Quasar Distributors, LLC. Trillium Asset Management is the advisor to the Funds.
Trillium ESG Small / Mid Cap Fund (US 40-Act Mutual Fund) N/A N/A U.S.

The Trillium ESG Small/Mid Cap Fund invests in small and mid cap stocks that are well-diversified across economic sectors and meet Trillium’s sustainability criteria. Fundamental equity analysts, who divide coverage by sector, are responsible for providing in-depth analysis of companies and generating new buy ideas consistent with the strategy’s high quality approach, including a rigorous integrated review of financial and ESG factors.

 

The fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 866-209-1962 or click the following link (https://www.trilliuminvest.com/statutory-documents/trillium-esg-funds-prospectus).

 

Mutual fund investing involves risk; principal loss is possible. The environmental policy of the Funds could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have an environmental policy.

 

The Trillium Funds are distributed by Quasar Distributors, LLC. Trillium Asset Management is the advisor to the Funds.
Trillium ESG Global Equity Fund (AUD Fund) N/A N/A U.S.

The Fund is designed to address the risks and opportunities created by the increasing constraints on natural capital. An actively managed, diversified portfolio of global equities, which provides the potential for long-term capital growth by investing in companies that are leaders in managing ESG risks and opportunities. The Fund provides investors with an opportunity to align values in Trillium’s vision of investing in global companies that aim for a more sustainable future and meet the dual mandate of ESG leadership and financial quality. The Fund is specifically designed to be fossil fuel free.
Trillium Global Sustainable Opportunities Fund (AUD Fund) N/A N/A U.S.

A high-conviction, sustainability-themed strategy that invests in companies positioned to thrive as we transition to a more sustainable economy. The Fund is actively managed with a concentrated high-conviction, sustainability-themed strategy that invests in companies positioned to thrive during the transition to a more sustainable economy. The Fund’s strategy employs holistic, fully integrated fundamental equity analysis that incorporates ESG factors and emphasises growth companies priced at reasonable valuations. Companies must be able to demonstrate that they are contributing to three core sustainability themes through their core business: 1) climate solutions, 2) economic empowerment, and 3) healthy living. The Fund’s portfolio has no fossil fuel exposure.

ESG DDQ

Does the investment manager have a policy addressing its approach to the incorporation of ESG factors within the investment process? If there is no policy, please explain why.

Yes.

Please explain what steps have been taken to ensure ESG specialists have authority in the portfolio management process?

All of our investment team members are dedicated to ESG as Trillium is an advisor devoted exclusively to sustainable and responsible investing. Investment analysts must follow a standard process for integrating ESG information.  They are trained in this process as part of the on-boarding process for new analysts.  In addition, we get frequent updates from ESG data providers like MSCI and Bloomberg to help make sure that analysts are apprised of the most recent data and methods of research. Our ESG Specialists are involved in every aspect of ESG data collection and analysis, from our industry – level materiality/benchmarking exercises, to the construction and/or review of specific company peer reviews, among other responsibilities. The ESG Specialist team opines and presents on every eligible stock to be voted for our approved/Buy List during our weekly IMC meetings. Finally, our CIO directly oversees the fundamental equity analyst and ESG Specialist teams to ensure that integration and collaboration are practiced throughout.

How do you collaborate with other investors to achieve successful engagement outcomes?

Working with other investors or civil society organizations is an important aspect to Trillium’s approach to advocacy. Trillium will lead, co-lead, and actively support collaborative letter writing, public statements, shareholder proposals, and investor statements to advance ESG initiatives at company, sector, or economy-wide levels. However, at times collaboration is a poor fit, or unnecessary for a particular engagement (for example, when investor expectations on an ESG topic area are well established, or quick action is required). But when the resources and time that collaborative engagements require clearly are beneficial, Trillium has a long history of leadership.

Trillium also values the enormously important role of organizations designed to convene investors and promote collaborative action. We have helped create many such organizations, such as member association US SIF and environmental coalition Ceres, and are supporters of many others. While some organizations are small and topic-specific, and others are large multi-issue institutions, they all play important roles in Trillium’s work.

Finally, Trillium is a strong supporter of like-minded asset managers leading collaborative efforts which we can join. The number of important ESG topics is far too large for any one investment firm, no matter how big, to effectively engage on alone. As such, Trillium is eager to sign onto other investor efforts and initiatives.

Please describe what ESG data, research, third-party consultants and other resources the fund manager uses, and how these are incorporated in the investment and risk management processes.

Our analysts use a number of ESG data sources as part of our integrated research process. We use recognized third-party ESG research providers, including both independent firms and sell-side teams. We use data from single-issue expert NGO sources, as well as communicate with leaders of advocacy organizations to follow emerging risks. We utilize government data and ESG data directly provided by companies. Listed below is a partial example of ESG data sources we have used. It is the job of our fundamental analysts to integrate this data into their comprehensive fundamental research process.

  • Company data: CSR Reports, 10-k and other SEC filings, company meetings
  • NGO resources: Center for Political Accountability, 350.org, SASB, US Green Building Council, Chemical Footprint Project, Banktrack
  • Government Data: FDA, EPA, National Labor Relations Board, Energy Star, International Energy Agency, the European Commission
  • Third-party research: MSCI, RepRisk, Bloomberg, ISS ESG, various sell-side firms
  • News/Surveys/Lists: Glassdoor.com, Access to Medicine Index, Fortune’s Best Places to Work List, ENDS Europe

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