Pendal employs a negative screening strategy, excluding companies from its investment universe based on practices deemed unsustainable or unethical. This includes companies involved in fossil fuel exploration or extraction, or those earning over 10% of their revenue from fossil fuel-related power generation, refinement, distribution, or specific services. Companies deriving 10% or more of their income from uranium mining for nuclear power, unsustainable forestry or associated products, are also excluded. The screening extends to businesses directly involved in gambling, pornography production, and the manufacture or distribution of controversial weapons. Those companies surpassing a 10% revenue threshold from the indirect provision of gambling, distribution or retailing of pornography, non-controversial weapons or armaments are also excluded. Additionally, companies producing alcoholic beverages or tobacco (including e-cigarettes and inhalers), or earning 10% or more of their revenue from their distribution or related services, are excluded. The policy also bars companies involved in animal testing for cosmetics, engaging in predatory lending practices, or those with significant breaches of social or environmental norms or unresolved allegations of unethical conduct. 

The Fund Manager adopts a principles-based approach and aims to invest in companies that demonstrate, or offer or enable more sustainable practices, business models or products and services, that advance or participate in the transition of the Australian economy to one that is more sustainable. The Fund Manager allocates capital to companies that directly contribute or enable others to contribute to areas such as innovation and technological advances, more sustainable resource consumption, health and wellbeing, sustainable and resilient infrastructure, quality education, financial wellbeing, supply chain resilience, social inclusion and diversity, meeting basic needs, and decarbonisation.

Pendal has been a signatory to the United Nations supported Principles for Responsible Investment (PRI) since 2007. In 2018 Pendal commenced public reporting aligned to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).