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Bradesco Asset Management

PRI reporting framework 2017

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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
100 Integration alone
0 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
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
100 Integration alone
0 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.

Fixed income assets in Brazil are primarily allocated in Brazilian Sovereign bonds and ESG integration is based on engagement with regulators and policy makers. In corporate and financial bonds, the lack of a secondary market raises the importance of adequate ESG analysis and engagement with companies and financial institutions. That is the reason why BRAM chose to develop methodologies to integrate these issues to bonds ratings and investment decision process.

04.3. Additional information [Optional].


FI 05. ESG issues and issuer research

05.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
Corporate (financial)
Corporate (non-financial)
Securitised
Environmental data
Social data
Governance data

05.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

05.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

BRAM has a specialised ESG analyst and uses an ESG research provider that has developed a specific methodology together with our investment team for ESG research of fixed income assets. For financial bonds, all institutions are evaluated and receive a rating that impacts the limit of asset allocation in each institution. For corporate bonds, the portfolio is assessed annually for ESG risk management and new bond issuers are rated according to corporate practices and issuance purposes. 

05.4. Additional information. [Optional]


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]

Whenever we assess companies or financial institutions regarding their ESG performance, our ESG provider holds a meeting or call to validate information and correct inaccuracies on the public information research process. Only then the final ESG rating is attributed and presented to our investment team. Also, the ESG analyst holds meeting with the companies to verify the information given by the ESG provider.


(C) Implementation: Integration

FI 14. Integration overview

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

For fixed income assets, ESG rating is considered together with financial, corporate and issuance-specific information to form the issuer's final rating. The integrated result is discussed with the investment committee to determine asset allocation. 

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

Corporate (financial)

ESG rating influences the asset allocation limit for each institution in our portfolio

Corporate (non-financial)

ESG rating influences asset allocation in new issuances and risk management in our current portfolios

Securitised

ESG rating influences asset allocation in new issuances and risk management in our current portfolios

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)
Securitised
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

Securitised

Environmental

Social

Governance

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

Corporate (financial)

Annual reviews of ESG rating are considered when analysing the financial limits.

Corporate (non-financial)

New issuances consider ESG rating when analysing the issuer, and annual reviews provide the investment team with information about ESG risks that can lead to engagement with companies or influence investment decision 

Securitised

New issuances consider ESG rating when analysing the issuer, and annual reviews provide the investment team with information about ESG risks that can lead to engagement with companies or influence investment decision

16.3. Additional information.[OPTIONAL]


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