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Danske Bank

PRI reporting framework 2017

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

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.

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

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

Fixed income (corporate) adhere to the same RI Policy as Listed Equity.

This type of screening intends to ensure that the investors do not hold assets in companies that are in breach of international norms as well as ensuring that no funds are invested in certain aspects of nuclear arms production and other controversial weapons (cluster munitions and anti-personel mines). In addition, funds that exclude selected controversial sectors such as alcohol and gambling are screened to ensure the applicable exclusions are in place.

We integrate environmental, social and governance (ESG) considerations in our investment practices, as we believe that management of environmental and social risks and well-functioning corporate governance is a precondition for an optimization of the risk-adjusted return. The ESG integration process took place in 2016 through biannually meetings between the RI team and all portfolio management teams in all actively managed strategies. ESG risks were highlighted and potential outliers in terms of low ESG scores were discussed.

04.3. Additional information [Optional].

Guideline on investing in Fixed Income (SSA):

The guideline for publicly listed sovereign bonds is intended to assure customers that their funds are invested with due respect of human rights and with a precautionary approach to avoid financing human rights abuses.

We base our guidelines for investing in government bonds on the Worldwide Governance Indicators (WGI). The WGI methodology was developed and is updated by the World Bank Development Research Group, and it ensures that our decisions are based on a wide range of official and non-official sources. The WGI measures countries' strength on six parameters:

 Voice and accountability

 Political stability and absence of violence

 Government effectiveness

 Regulatory quality

 Rule of law

 Control of corruption

The guideline represents a precautionary approach to investing in sovereign bonds issued by countries and other sovereign entities that are affected by armed conflict or particularly weak public governance. The guideline supplements sanctions imposed by the UN and EU, and supports our commitment to UN Guiding Principles and UN Global Compact.

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]