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Elo Mutual Pension Insurance Company

PRI reporting framework 2017

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (C) Implementation: Integration

(C) Implementation: Integration

FI 14. Integration overview

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

Within the credit investments ESG issues are integrated into the investment process on a portfolio manager level. In addition we also use external screening services. An ongoing dialogue and meetings with companies' management teams and in-depth knowledge of the investment targets all reduce the chance of negative surprises and provide an understanding of the kinds of factors that make a good, responsibly operating company, and thus a good investment. Our approach is a mixe of quantitative and qualitative. A good scoring improves the overall investment score and a weak ESG rating reduces the attractiveness on the investment.

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

SSA

Corruption Perception Index by Transparency International used for ranking investable universe.

Corporate (financial)

ESG issues are integrated into the investment process on a portfolio manager level. In addition we also use external screening services. An ongoing dialogue and meetings with companies' management teams and in-depth knowledge of the investment targets all reduce the chance of negative surprises and provide an understanding of the kinds of factors that make a good, responsibly operating company, and thus a good investment. Our approach is a mixe of quantitative and qualitative. A good scoring improves the overall investment score and a weak ESG rating reduces the attractiveness on the investment. The process is the same for financials and non-financials but governance issues are more in focus.

Corporate (non-financial)

ESG issues are integrated into the investment process on a portfolio manager level. In addition we also use external screening services. An ongoing dialogue and meetings with companies' management teams and in-depth knowledge of the investment targets all reduce the chance of negative surprises and provide an understanding of the kinds of factors that make a good, responsibly operating company, and thus a good investment. Our approach is a mixe of quantitative and qualitative. A good scoring improves the overall investment score and a weak ESG rating reduces the attractiveness on the investment.

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
SSA
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
SSA

Environmental

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.

SSA

Environmental issues are currently under development in SSA investments. Social and Governance issues fully integrated into SSA investment process.

Corporate (financial)

Within financials it is similar to the description on corporates below but there is more focus put on the governance issues.

Corporate (non-financial)

A starting point is whether there are or has there been serious controversies. If yes we raise the question whether they have been resolved. The ESG factors can vary between sectors.Typical elements within environment would be toxic emissions and waste, water stress, carbon emissions, product carbon footprint and opportunities in clean tech. Social aspect includes labour management, health and safety or product safety. Within Governance the general corporate governance, anti competitive practicies and Business ethics & fraud. The focus on these issues varies between sectors.

16.3. Additional information.[OPTIONAL]


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