This report shows public data only. Is this your organisation? If so, login here to view your full report.

GAM Holding AG

PRI reporting framework 2017

Export Public Responses
Pdf-img

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income

ESG incorporation in actively managed fixed income

Implementation processes

FI 04. Incorporation strategies applied

04.1. Indicate 1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and 2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.

Corporate (financial)
0 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%

04.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

GAM's heritage as an independent, pure play asset manager, built on a foundation of high conviction investing means that our investment teams are not obliged to adhere to any house view. Therefore we formulated our ESG incorporation strategy to take account of diversity while building a framework that is robust, systematic and scaleable over time. This first phase of the framework incorporates standardised screening across GAM and where teams are able to, integration of ESG factors into their investment process.

GAM believes that each of our investment teams has the duty to explore all aspects that could potentially impact their investment decision-making in the best interest of our clients, including the consideration of ESG aspects and active ownership practices.

Our approach has been to lay the foundation for working with our investment teams to encourage and explore the most appropriate ways for them to integrate ESG considerations into their investment processes. Our overarching aims are to ensure we fulfil our fiduciary duty and meet our clients' evolving requirements.

04.3. Additional information [Optional].


FI 05. ESG issues and issuer research (Private)


FI 06. Processes to ensure analysis is robust

06.1. Indicate how you ensure that your ESG research process is robust:

06.2. Describe how your ESG information or analysis is shared among your investment team.

06.3. Additional information. [Optional]


(A) Implementation: Screening

FI 07. Types of screening applied

07.1. Indicate the type of screening you conduct.

Select all that apply
Corporate (financial)
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

07.2. Describe your approach to screening for internally managed active fixed income

Based on data and research from our appointed ESG specialist data provider, Sustainalytics, we identify the worst ESG rated companies globally from their universe coverage and, if we hold any of these companies in our portfolios, our investment managers provide us with their investment rationale on whether those ESG factors represent a material risk to the investment performance of those companies overall. At this stage of our progress as a PRI signatory, we find this approach works best for us across both fixed income and equities because we are targeting the companies / entities rather than a narrow separation by source of capital (equities / debt). We eschew pure negative screens; we believe it is best practice to combine the initial quantitative negative screens with the qualitative judgement of our expert investment managers. If, however, screens are specifically required by our clients, we are happy to accommodate such requests. We already do this for some of our clients who invest via segregated mandates.

07.3. Additional information. [Optional]


FI 08. Negative screening - overview and rationale

08.1. Indicate why you conduct negative screening.

Corporate (financial)

Corporate (fin)

Corporate (non-financial)

Corporate (non-fin)

08.2. Describe your approach to ESG-based negative screening of issuers from your investable universe.

The ESG screening criteria we deploy across GAM is based on 175 indicators, data on which is collected and monitored by Sustainalytics. They have a historical database that goes back to 2009, of which we are able to make use.

As stated in FI07.02 we eschew pure negative screens. We prefer to combine quantitative screens with the qualitative judgement of our investment managers. Therefore the screen for the worst ESG rated companies is used to identify warning flags for our managers.

08.3. Additional information. [Optional]

If, however, specific, additional screens are required by our clients, we are happy to accommodate such requests. We already do this for some of our clients wo invest via segregated mandates.


FI 09. Examples of ESG factors in screening process (Private)


FI 10. Screening - ensuring criteria are met

10.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening?

10.2. Additional information. [Optional]


(C) Implementation: Integration

FI 14. Integration overview

14.1. Describe your approach to integrating ESG into traditional financial analysis.

At this stage in our journey as a PRI signatory, we have not decided to embed ESG factors into traditional financial analysis as standard across all our investment teams. Some of our teams do embed E,S and G factors into their financial models - however, this is not yet standard across GAM. While we have a common distribution platform, we actively foster a broad range of independent investment teams who are accorded an extraordinary degree of latitude in their investment philosophies and processes. We do not, for example, hold a 'house' view - each team has the freedom to invest as they wish. It follows that we do not deploy a standardised financial analysis template nor do we have large research teams that act as a common pool of investment ideas. Therefore, at this stage we are treating ESG factors as risk factors that we use for screening. The worst ESG rated companies are highlighted and managers treat the results as warning flags that may materially impact the investment performance of their portfolios.

14.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

Corporate (financial)

At this stage of our progress as a PRI signatory, we find our current approach works best for us across both fixed income and equities because we are targeting the companies / entities rather than narrowly separating by source of capital (equities / debt). We do not make a distinction on how we treat ESG factors for financial and non-financial corporates. While their business models may differ, all companies need to carry out good governance and have relevant regard for environmental and social factors where they have or potentially may cause an impact.

Corporate (non-financial)

At this stage of our progress as a PRI signatory, we find our current approach works best for us across both fixed income and equities because we are targeting the companies / entities rather than narrowly separating by source of capital (equities / debt). We do not make a distinction on how we treat ESG factors for financial and non-financial corporates. While their business models may differ, all companies need to carry out good governance and have relevant regard for environmental and social factors where they have or potentially may cause an impact.

14.3. Additional information [OPTIONAL]


FI 15. Integration - ESG information in investment processes

15.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
Corporate (financial)
Corporate (non-financial)
ESG analysis is integrated into fundamental analysis
ESG analysis is integrated into security weighting decisions
ESG analysis is integrated into portfolio construction decisions
ESG analysis is a standard part of internal credit ratings or assessment
ESG analysis for issuers is a standard agenda item at investment committee meetings
ESG analysis is regularly featured in internal research notes or similar
ESG analysis is a standard feature of ongoing portfolio monitoring
ESG analysis features in all internal issuer summaries or similar documents
Other, specify

15.2. Additional information [OPTIONAL]


FI 16. Integration - E,S and G issues reviewed

16.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

16.2. Please provide more detail on how you review E, S and G factors in your integration process.

Corporate (financial)

As stated in FI 14.2, we do not make a distinction on how we treat ESG factors for financial and non-financial corporates. While their business models may differ, the ability to discern the advantages and disadvantages per issuer and issue falls under the traditional investment analysis in which our managers already possess particular expertise. However, all companies need to carry out good governance and have relevant regard for environmental and social factors where they have or potentially may cause an impact. As previously stated, at this stage of our journey as a PRI signatory, we treat ESG factors as risk factors that we use for screening. The worst ESG rated companies are highlighted and managers treat the results as warning flags that may materially impact the investment performance of their portfolios.

Corporate (non-financial)

As stated in FI 14.2, we do not make a distinction on how we treat ESG factors for financial and non-financial corporates. While their business models may differ, the ability to discern the advantages and disadvantages per issuer and issue falls under the traditional investment analysis in which our managers already possess particular expertise. However, all companies need to carry out good governance and have relevant regard for environmental and social factors where they have or potentially may cause an impact. As previously stated, at this stage of our journey as a PRI signatory, we treat ESG factors as risk factors that we use for screening. The worst ESG rated companies are highlighted and managers treat the results as warning flags that may materially impact the investment performance of their portfolios.

16.3. Additional information.[OPTIONAL]


Top