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Pensionfund Metalektro (PME)

PRI reporting framework 2017

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

(A) Implementation: Screening

FI 07. Types of screening applied

07.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

07.2. Describe your approach to screening for internally managed active fixed income

SSA: In European sovereign bonds investments we rank the countries by looking at several governance indicators. Only the top 25% ranking countries are eligible for inclusion. We take into account Governance data from the World Bank Worldwide Governance Index.

EMD: We apply negative screening in Emerging Market Debt (MSCI country scores) and we use ESG issues in the analysis. We take into account ESG data that covers E, S and G. like United Nations Human Development Index, World Bank Worldwide Governance Index, Heritage Index of Economic Freedom, World Bank Ease of Doing Business Index, World Bank Dependency Ratio, MSCI environmental data to score countries.

Corporates (Fin and non-Fins), we use an exclusion list for negative screening (See FI 08.2 for more details).  The exclusion criteria UN PRI are reviewed on a quarterly basis and/or if a material ESG risk materializes. In terms of norm-based screening, we analyze each corporate that is part of our investable universe and we require certain minimum standards regarding governance, disclosure and business practice.

07.3. Additional information. [Optional]


FI 08. Negative screening - overview and rationale

08.1. Indicate why you conduct negative screening.

SSA

SSA

Corporate (non-financial)

Corporate (non-fin)

08.2. Describe your approach to ESG-based negative screening of issuers from your investable universe.

In addition to complying to Dutch law, we apply certain international treaties to our investment policy, as we want to provide pensions on a sustainable way. We exclude companies that are directly involved in the development, production and/or maintenance of products and/or services that are not compliant with following treaties and criteria (see additional information for the list).

08.3. Additional information. [Optional]

In addition to complying to Dutch law, we apply certain international treaties to our investment policy, as we want to provide pensions on a sustainable way. We exclude companies that are directly involved in the development, production and/or maintenance of products and/or services that are not compliant with following treaties and criteria.

• Anti-personnel mines: definitions as defined in Ottawa convention

• Cluster weapons: definitions as defined in Convention on Cluster munitions

• Chemical and Biological weapons: definitions as defined in Chemical Weapons Conventions and Biological and Toxin weapons Convention.

• Nuclear weapons: we only considers companies involved in nuclear weapons in case activities are carried out in, or for countries that are not allowed to develop or produce such weapons based on the Non Proliferation Treaty. • White Phosphorus: for military use.

Besides the above mentioned exclusion of controversial weapons, we exclude companies when they are directly involved in the development, production or maintenance of products and/or services that are non-compliant with international treaties signed by the Dutch government. This applies for the following treaties: • The Montreal Protocol (protection of the ozon layer)

• CITES (aim is to ensure that international trade in specimens of wild animals and plants do not threaten their survival).

• Social Practices: violation of human rights and labor standards

• Failure to meet Governance standards: Limited disclosure, transparency (EM Corporates)


FI 09. Examples of ESG factors in screening process (Private)


FI 10. Screening - ensuring criteria are met

10.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening?
Positive/best-in-class screening
Norms-based screening

10.2. Additional information. [Optional]

Our benchmarks are customised to include our negative or positive screening criteria. Every quarter our excluded companies are updated. Our compliance department monitors daily whether our mandates requirements are met (which includes restrictions on positive and negative screening on ESG). In addition our systems prevents our portfolio managers from investing outside their investable universe.


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