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ACTIAM

PRI reporting framework 2017

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(A) Implementation: Screening

LEI 06. Types of screening applied

06.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

Our data provider executes an exclusionary screening every quarter, based on our Fundamental Investment Principles which incorporate Environmental, Social and Governance Issues. We exclude several products and activities, for instance nuclear weapons or riverine tailings disposal. Furthermore, for our active fund strategies specifically, an additional thematic overlay is added which leads to further exclusions of "worst offenders", based on product, activity or ESG practices. In addition, a sector-based score is integrated into the final ESG score, which downgrades companies that are active in certain sectors, such as the oil & gas sector, as well as an analyst score (positive or negative) which can be given by the ESG team.

Screened by

Description

Companies that deliver sustainable goods or services will receive an upgrade in their ESG score, based on the thematic overlay in the actively managed fund strategies. Furthermore, given some sectors are more sustainable than others, ACTIAM has developed sector scores into its ESG scoring methodology. Likewise to the negative/screening approach, the ESG team can add a positive analist score to upgrade companies.

These various (positive) screening methodologies result in higher ESG Scores for relevant individual companies.

Lastly, the mandates of our actively managed fund strategies stipulate optimising financial returns in combination with high portfolio ESG-scores relative to its benchmarks.  

Screened by

          Please check the list of other international mechanisms we consult as an appendix to our Fundamental Investment Principles on our website: http://www.actiam.nl/nl/duurzaamheid/Documents/Fundamental_Investment_Principles.pdf
        

Description

ACTIAM applies a norms-based screening to all its investments, including passive funds. Please see our Fundamental Investment Principles for companies (https://www.actiam.nl/nl/documenten/verantwoord/Documents/Fundamental_Investment_Principles_Companies.pdf) and sovereigns (https://www.actiam.nl/nl/documenten/verantwoord/documents/Responsible_Investment_Policy_Sovereigns.pdf) and exclusion list for more information.

06.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

Screening criteria (Fundamental Investment Principles) are established by the in-house ESG team in close collaboration with our clients and are reviewed every quarter. The final decision to approve a change in the Fundamental Investment Principles is the responsibility of the ACTIAM Selection Committee. The ACTIAM Selection Committee meets on a quarterly basis and decides on the eligibility of investments and any revisions of the Fundamental Investment Principles. This decision and policy-making body comprises four members: the CEO, performing the role of Chair; the CIO; the Head of the ESG Research team; and an external expert who is also a Professor of Ethics. After each ACTIAM Selection Committee meeting clients are informed on the decisions made and newly excluded companies are communicated on our website and in our quarterly ESG report.


LEI 07. Processes to ensure screening is based on robust analysis

07.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

07.2. Additional information. [Optional]


LEI 08. Processes to ensure fund criteria are not breached

08.1. Indicate which processes your organisation uses to ensure fund criteria are not breached

08.2. If breaches of fund screening criteria are identified - describe the process followed to correct those breaches.

ACTIAM's governance is organised according to the ‘three lines of defence’- model. The first line (portfolio management and the ESG research team) is the risk owner and responsible for first line risk controls. Mandate restrictions are monitored automatically by the mandate compliance department (the 'second line') on a daily basis. In the event of a breach, the second line manager will investigate the cause of the breach as soon as the breach is discovered. In case of a passive breach (caused by external factors as f.i. market moves), portfolio management will realign the portfolio to the permitted bandwith. In case of an active breach (internal factors, like f.i. an excluded security is accidentally purchased),  portfolio management must sell the security immediately. The client will be informed about the event and will be compensated according to ACTIAM’s compensation policy to the extent any losses have arisen. Any profits remain with the client however.

08.3. Additional information.[Optional]

If the security is the outcome of a corporate action, the security will be sold when the corporate action is physically settled.

 


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