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World Bank Group Retirement Benefit Plans

PRI reporting framework 2017

You are in Indirect – Manager Selection, Appointment and Monitoring » Selection

Selection

SAM 05. Selection processes (LE and FI)

05.1. Indicate what RI-related information your organisation typically covers in the majority of selection documentation for your external managers

Investment strategy and how ESG objectives relate to it

ESG incorporation requirements

ESG reporting requirements

Other

No RI information covered in the RFPs

LE

FI - SSA
FI - Corporate (financial)?
FI - Corporate (non-financial)?
FI - Securitised?
Private equity
Property
Infrastructure
Investment strategy and how ESG objectives relate to it
ESG incorporation requirements
ESG reporting requirements
Other
No RI information covered in the RFPs

If you select any 'Other' option(s), specify

We request and review information on responsible ownership policies and practices by Managers as part of the ESG due diligence process, which includes information on active ownership and engagement.

05.2. Explain how your organisation evaluates the investment manager’s ability to align between your investment strategy and their investment approach

Strategy

Assess the time horizon of the investment manager’s investment strategy

Assess the quality of investment policy and its reference to ESG

Assess the investment approach and how ESG objectives are implemented in the investment process (asset class specific)

Assess the ESG definitions to be used

Other

None of the above

LE

FI - SSA
FI - Corporate (financial)?
FI - Corporate (non-financial)
FI - Securitised?
Private equity
Property
Infrastructure
Assess the time horizon of the investment manager’s investment strategy
Assess the quality of investment policy and its reference to ESG
Assess the investment approach and how ESG objectives are implemented in the investment process (asset class specific)
Assess the ESG definitions to be used
Other
None of the above

ESG people/oversight

Assess ESG expertise of investment teams

Review the ownership of the ESG implementation

Review how ESG implementation is incentivised

Other

None of the above

LE

FI - SSA
FI - Corporate (financial)?
FI - Corporate (non-financial)?
FI - Securitised?
Private equity
Property
Infrastructure
Assess ESG expertise of investment teams
Review the ownership of the ESG implementation
Review how is ESG implementation enforced /ensured
Other
None of the above

Process/portfolio construction/investment valuation

Review the process ensuring the quality of the ESG data used

Review and agree the investment decision making process (and ESG data use in it)

Review and agree the ESG incorporation strategy impact of ESG analysis on investment decisions

Review and agree how the manager is targeting returns and ESG objectives

Review and agree how the manager identifies, measures and manages ESG risk

Review and agree return and risk in combination at a portfolio level (portfolio construction) and ESG objectives

Review how ESG materiality is evaluated by the manager in the monitored period

Review process for defining and communicating on ESG incidents

Other, specify

None of the above

LE

FI - SSA
FI - Corporate (financial)?
FI - Corporate (non-financial)?
FI - Securitised?
Private equity
Property
Infrastructure
Review the process ensuring the quality of the ESG data used
Review and agree the investment decision making process (and ESG data use in it)
Review and agree the ESG incorporation strategy impact of ESG analysis on investment decisions
Review and agree how the manager is targeting returns and ESG objectives
Review and agree how the manager identifies, measures and manages ESG risk
Review and agree return and risk in combination at a portfolio level (portfolio construction) and ESG objectives
Review how ESG materiality is evaluated by the manager in the monitored period
Review process for defining and communicating on ESG incidents
Other, specify
None of the above

If you select any 'Other' option(s), specify

For "Strategy" table - Proper due diligence and capacity to identify, manage, account for and report material ESG factors.

05.3. Describe the selection process

          Site visits to existing and potential assets (Property and Infrastructure)
        

05.4. When selecting external managers does your organisation set any of the following:

ESG score

ESG weight

Real economy influence

Other RI considerations

None of the above

LE

FI - SSA
FI - Corporate (financial)?
FI - Corporate (non-financial)?
FI - Securitised?
Private equity
Property
Infrastructure
ESG score
ESG weight
Real world economy targets
Other RI considerations
None of the above

If you select any 'Other' option(s), specify

05.5. Provide additional information relevant to your organisation's selection approach [OPTIONAL]

          Our ESG DDQ is implemented for both private and public assets. The ESG DDQ is based on PRI’s template and looks at four categories of issues: 1. Overall approach to ESG/responsible investments, policies and awareness; 2. Capacity to identify, measure and manage material ESG risks and opportunities; 3. Responsible ownership; and, 4. Reporting and disclosure.  A scorecard and a rating system complement the ESG questionnaire in the due diligence process. Managers are assessed on the basis of their responses to the ESG DDQ, as well as any other additional information provided during the selection process (e.g. complimentary information, relevant documents, interviews, etc.), and are assigned a given score and rating. The score and rating are intended to facilitate internal understanding of the level of confidence in the manager’s approach to ESG/responsible investments, and comparability across asset classes and portfolio. This also is intended to serve as a starting point for discussions with managers at the monitoring stage, and will determine priorities for engagement at the manager level.  We observed that some managers decided to formalize their ESG policies as a result of this interaction. Others also expressed interest in signing up to the PRI, which is one of the questions included in the DDQ.
        

SAM 06. Evaluating engagement and voting practices in manager selection (listed equity/fixed income)

06.1. Indicate how your organisation typically evaluates the manager’s active ownership practices in the majority of the manager.

Engagement

Review the manager’s engagement policy

Review the manager’s engagement process (with examples and outcomes)

Ensure that engagement outcomes feed back into the investment decision-making process

Other engagement issues in your selection process specify

None of the above

LE

FI - SSA
FI - Corporate (financial)
FI - Corporate (non-financial)
FI - Securitised
Review the manager’s engagement policy
Review the manager’s engagement process (with examples and outcomes)
Ensure that engagement outcomes feed back into the investment decision-making process
Other engagement issues in your selection process specify
None of the above

If you select any 'Other' option(s), specify

We request information from prospective managers about completed engagements, examples of how they expect engagement will avoid erosion of long-term shareholder value or help manage risk, percentage of portfolio and/or universe engaged. As for managers with longer track record on stewardship/engagement, we request them to comment on the degree to which engagement has contributed to portfolio risk or return over time.

(Proxy) voting

Review the manager’s voting ability within different ownership rights

Review the manager’s voting policy

Ensure that voting outcomes feed back into the investment decision-making process

Other voting issues in your selection process; specify

None of the above

LE

Review the manager’s voting ability within different ownership rights
Review the manager’s voting policy
Ensure that voting outcomes feed back into the investment decision-making process
Other active ownership voting issues in your selection process; specify
None of the above

If you select any 'Other' option(s), specify

We require our managers to vote in accordance with their proxy voting policy. Should such consistency not be observed, managers are required to report on this and explain why deviating from their voting policy was in the best interest of the Plan and its beneficiaries.

06.2. Describe how you assess if the manager’s engagement approach is effective.

          Qualitative and comparative analysis against other managers and best practice.
        

06.3. Describe how you assess if the manager’s voting approach is effective/appropriate

          A general review is undertaken by our legal department to identify controversial issues.
        

06.4. Additional information [OPTIONAL]

          
        

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