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Colonial First State Global Asset Management (including First State Investments)

PRI reporting framework 2016

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 03. Percentage of each incorporation strategy

03.1. 以下を記載してください。(1)組織でのアクティブ運用上場株式について、どのESG組入れ戦略や組み合わせを使用しているか(2)アクティブ運用している上場株式の戦略または戦略の組み合わせ別内訳

ESG組み入れ戦略 (当てはまるものをすべてお選びください)
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 10%)
97 %
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 10%)
3 %
アクティブ運用している上場株式の合計 108.7%

03.2. 組み入れのアプローチと、特定のESG組み入れ戦略を選択している理由を説明してください。

Each team has a unique investment processes most of which have been developed over many years by our leading investment professionals.

Responsible investment practices are applied by each of these teams in a way which complements their investment processes and philosophy. Principles of stewardship and responsible investment are the common thread which tie our diverse investment capabilities together.

In order to maintain the high standards consistent with our ambitions and commitments, while allowing for the innovative and diverse approaches exhibited by our different teams, a strong governance framework around responsible investment is critical. 

In recent years we have begun to develop ESG themed investment funds led by our Stewart Investors team’s sustainability strategies. Development of these strategies occurs within our existing product development process.

03.3. ESG組み入れ戦略の組み合わせを使用して資産を運用している場合、ESG戦略の組み合わせをどのように使用しているかを簡単に説明してください。 [任意]

The Stewart Investors Sustainability Strategies are managed consistently with other investment strategies managed by the team, which have from their inception in 1988 integrated the consideration of ESG factors into investment decision-making through an investment approach which is focused on:

• Stewardship

• An absolute return mind-set

• Bottom-up analysis

• Long-term thinking

• Searching for quality companies

• Finding sustainable and predictable growth

• Strong valuation disciplines

The sustainability strategies augment this process by seeking to invest in the shares of those companies which the team believes are particularly well positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate.

The team operates within and contributes to the broader Stewart Investors process which serves to strengthen both the traditional investment strategies and the newer sustainability strategies.

03.4. 補足情報。 [任意]

We have a cluster munitions policy which prohibits investment in companies involved in the manufacture of cluster munitions. This exclusion is managed through pre and post trade compliance systems. As the only exclusion applied we have elected not to select ‘screening’ as our incorporating strategy.


LEI 04. Type of ESG information used in investment decision

04.1. 組織でESG組み入れ戦略に使用しているESG情報およびこの情報の提供者を記載してください。

ESG情報の種類

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

04.2. 使用されているESG情報を簡単に説明してください。ESG組み入れ戦略全般での情報源の違いを明らかにしてください。

ESG information is obtained from a wide range of sources and incorporated into different teams’ investment processes in different ways.  In addition to the sources highlighted above there is an array of institutions who also provide relevant information e.g. the World Bank. IEA, IPCC, OECD etc.

Managing this flow of information is a significant challenge as we strive to ensure that investment professionals have the most relevant information. In order to achieve this an ESG information management project has been initiated which during 2015 made the following enhancements:

  • Finalised the integration of Sustainalytics and MSCI Governance Ratings into Factset, a data aggregation and investment analysis system used by a number of teams. 
  • Our Australian Proxy Advisor, Ownership Matters’ recommendations and special reports are also available through Factset
  • We have finalised the integration of Sustainalytics and MSCI Governance Ratings into our data warehouse ‘Eagle’. This is significant step that will allow us to perform portfolio level analytics for our listed equity portfolios. This will be used to provide reporting to investment team heads, and the Global Investment Assurance Committee and our RI Governance ESG Risks Forum. In the future it will also allow us to enhance client reporting. 

04.3. ブローカーがESG調査を提供することについてインセンティブを適用しているかを記載してください。

04.4. ブローカーに対してどのようにインセンティブを適用しているかを記載してください。

Each team has its own process for selecting and remunerating brokers. Four teams have an explicit process for doing so, while two remunerate on an ad-hoc basis, and one does not remunerate brokers for ESG research (it is our Indonesian equities team where brokers are not routinely producing ESG research). One of our teams has an execution only service as they are a passive investor. 

For those that have an explicit process this can take the form of panel reviews which include ESG criteria, voting by analysts or direct allocations for particular research.

One of our teams has an execution only service after they decided to unbundle brokerage from research to avoid conflicts of interests given that in bundled arrangements client funds are being used for broker research of questionable value. The team is now tendering for ESG research independently and paying for it from its own P&L rather than from client funds.  

We expect the unbundling of research from brokering to increase with a number of our teams considering their position. 

Stewart Investors have unbundled since 1 July as a first phase.

04.5. 補足情報。


LEI 05. Information from engagement and/or voting used in investment decision-making

05.1. ESGへのエンゲージメントや(委任状による)議決権行使から派生する情報を投資の意思決定に利用できるプロセスが組織にあるかどうかを記載してください。

05.2. 補足情報。

ESG engagement and proxy voting is performed by the relevant analysts and portfolio managers not by a separate team. As a result analysis of a ESG issues which can influence an investment decision can also influence engagement and proxy voting activities or visa-versa. All investment teams either have a centralised database with ESG information or have a standard section of company reports which include their ESG assessments. 


(B) Implementation: Thematic

LEI 09. Types of sustainability thematic funds/mandates

09.1. 組織が運用している、サステナビリティをテーマとするファンドやマンデートの種類を記載してください。

09.2. 組織でのサステナビリティをテーマとしたファンドのプロセスについて説明してください。 [任意

The Stewart Investors Sustainability Strategies are managed consistently with other investment strategies managed by the team, which have from their inception in 1988 integrated the consideration of ESG factors into investment decision-making through an investment approach which is focused on:

• Stewardship

• An absolute return mind-set

• Bottom-up analysis

• Long-term thinking

• Searching for quality companies

• Finding sustainable and predictable growth

• Strong valuation disciplines

The sustainability strategies augment this process by seeking to invest in the shares of those companies which the team believes are particularly well positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate.

The team assesses sustainability through three lens:

1. Sustainable Goods and Services

• Companies with a positive impact on society, environment, health

• Well positioned for shifting consumer preferences, regulatory headwinds, long-tail liabilities

2. Responsible Finance

• Purpose, license to operate, risk aware

3. Required infrastructure

• Infrastructure necessary to support long-term sustainable development

• Focus on environmental efficiency, operational performance, license to operate

The team operates within and contributes to the broader Stewart Investors process which serves to strengthen both the traditional investment strategies and the newer sustainability strategies.

09.3. 補足情報。 [任意]


(C) Implementation: Integration of ESG issues

LEI 10. Review ESG issues while researching companies/sectors

10.1. アクティブ戦略において企業やセクターを調査する際、ESG問題を見直しているかどうかについて記載してください。

ESG問題

これらの問題の見直しの対象および程度について説明してください

E(環境)

Environmental

S(社会)

Social

コーポレートガバナンス

Corporate Governance

10.2. 補足情報。 [任意]

Six of the investment teams review of the significance of ESG issues, while one team does, and our smart beta team does not currently review or incorporate these issues into their company analysis due to the nature of their investment process. 


LEI 11. Processes to ensure integration is based on robust analysis

11.1. ESG統合が徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを記載してください。

          Quarterly reporting to Global Investment Assurance Committee
        

11.2. ポートフォリオマネージャーがどのようにESG情報を保管・使用しているかについて説明してください。

11.3. 補足情報。

Of the eight listed equity teams, seven use a centralised database, seven teams have a standard section of stock notes dedicated to ESG, and three teams maintain systematic records of how ESG information was incorporated into the investment decision-making process.


LEI 12. Aspects of analysis ESG information is integrated into

12.1. 投資分析のどの側面にESG情報を統合しているかを記載してください。

12.2a. ESG情報を適正価値/ファンダメンタル分析および/またはポートフォリオの構築へと統合するプロセスについて、組織でのプロセスの一部となっている手法を選択してください。

12.3. ESG情報をポートフォリオの構築にどう統合しているかを説明してください。

Three teams reported adjustments to valuation tools and two teams reported adjustments to income forecasts. Four teams do not make these types of adjustments but instead reported that it was implied or captured in quality assessments which influenced portfolio weights. For example one of our teams reported that:

"ESG analysis is integrated into our investment process through our quality assessment and ranking model. This model consists of 25 criteria that influence stock returns in general and infrastructure securities in particular. A score is assigned to each criterion. A lower quality score makes it harder for a stock to be included within the overall portfolio. ESG criteria account for 20% of the overall quality score."

While another reported that:

"ESG information is not explicitly integrated into fair value analysis. We regard each of the areas within ESG as broadly equivalent in importance and avoid investing in companies which cannot demonstrate that they meet appropriate standards or who are not making clear progress towards meeting them in the context of their operating environment."

12.4a. 利益予想/バリュエーションツールの修正に使用した手法を説明してください。

Three teams reported adjustments to valuation tools and two teams reported adjustments to income forecasts.

Four teams do not make these types of adjustments but instead reported that it was implied or captured in quality assessments which influenced portfolio weights. For example one of our teams reported that:

"ESG analysis is integrated into our investment process through our quality assessment and ranking model. This model consists of 25 criteria that influence stock returns in general and infrastructure securities in particular. A score is assigned to each criterion. A lower quality score makes it harder for a stock to be included within the overall portfolio. ESG criteria account for 20% of the overall quality score."

While another reported that:

"ESG information is not explicitly integrated into fair value analysis. We regard each of the areas within ESG as broadly equivalent in importance and avoid investing in companies which cannot demonstrate that they meet appropriate standards or who are not making clear progress towards meeting them in the context of their operating environment."

12.2b. ESG情報を適正価値/ファンダメンタル分析および/またはポートフォリオの構築へと統合するプロセスについて、組織でのプロセスの一部となっている手法を選択してください。

12.4b. 利益予想/バリュエーションツールの修正に使用した手法を説明してください。

Three teams reported adjustments to valuation tools and two teams reported adjustments to income forecasts. Four teams do not make these types of adjustments but instead reported that it was implied or captured in quality assessments which influenced portfolio weights. For example one of our teams reported that:

"ESG analysis is integrated into our investment process through our quality assessment and ranking model. This model consists of 25 criteria that influence stock returns in general and infrastructure securities in particular. A score is assigned to each criterion. A lower quality score makes it harder for a stock to be included within the overall portfolio. ESG criteria account for 20% of the overall quality score."

While another reported that:

"ESG information is not explicitly integrated into fair value analysis. We regard each of the areas within ESG as broadly equivalent in importance and avoid investing in companies which cannot demonstrate that they meet appropriate standards or who are not making clear progress towards meeting them in the context of their operating environment."

12.5. 補足情報。


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