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RBC Global Asset Management

PRI reporting framework 2017

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Fixed income - Engagement

FI 18. Engagement overview and coverage

18.1. Indicate if you engage on your fixed income assets. Please exclude any engagements carried out solely in your capacity as a shareholder.

Category
Proportion of assets
SSA

18.2. Indicate your motivations for conducting engagement.

Corporate (financial)

18.2. Indicate your motivations for conducting engagement.

Corporate (non-financial)

18.2. Indicate your motivations for conducting engagement.

18.3. Additional information.[OPTIONAL]

Opportunities for engagement are different for fixed income investments, as the relationship between an issuer and a debt holder is quite different to that between an issuer and an equity holder. ESG risks can impact the valuation of both equity and debt, but the bond holder's ability to initiate change in the issuer to reduce risk is limited when compared with the power of an equity holder. This does not mean that debt investors are unable to influence management decisions at all. The cost of debt is a key factor for companies and can contribute significantly to the long-term profitability of their investments. Any risks which potentially impact the likelihood of repayment, including ESG risks, will generally result in investors demanding a higher yield, which increases the cost of debt and creates an incentive for management to reduce those risks.

For example, BlueBay meets with issuers (particularly in relation to primary issuances) as part of its routine investment research process and has an opportunity to raise ESG-related matters. ESG-focused engagements are prioritized using a risk-based approach, which involves analyzing material ESG risks facing the issuer, the issuer's ESG score and the size of the investment.


FI 19. Engagement method

New selection options have been added to this indicator. Please review your prefilled responses carefully.

19.1. Indicate how you typically engage with issuers as a fixed income investor, or as both a fixed income and listed equity investor. (Please do not include engagements where you are both a bondholder and shareholder but engage as a listed equity investor only.)

Select all that apply
Type of engagement
SSA
Corporate (financial)
Corporate (non-financial)
Individual/Internal staff engagements
Collaborative engagements
Service provider engagements
We do not engage with issuers as a fixed income investor or as both a fixed income and listed equity investor

19.2. Indicate how your organisation prioritises engagements with issuers

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Based on potential materiality of ESG factors
Based on systemic risks to global portfolios
Based on our exposure (holdings) to ESG risks
Other
We do not prioritise engagements with issuers

If ‘other’ has been selected, please give a description

BlueBay incorporates other considerations to prioritize engagements which include whether the issuer is likely to be a long-term holding, whether the engagement is reactive to an event or development, or whether the engagement is part of a pre-determined ESG work program on a specific ESG issue.

19.3. Indicate when your organisation conducts engagements with issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Engagements are conducted pre-investment
Engagements are conducted post-investment 
Other, describe
We do not conduct engagements with issuers

If ‘other’ has been selected, please give a description

19.4. Indicate how your organisation conducts engagements with issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
We systematically engage prior to ESG-related divestments
We engage proactively in anticipation of specific ESG risks and/or opportunities
We engage in reaction to ESG issues which have already affected the issuer
Investment and ESG analysts systematically conduct ESG-related engagements together 
Other, describe
We do not conduct engagements with issuers

If ‘other’ has been selected, please give a description

19.5. Indicate what your organisation conducts engagements with issuers on.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
We conduct engagements with individual issuers
We conduct engagements across sectors and industries
We conduct engagements on specific ESG themes (e.g. human rights)
Other, describe
We do not conduct engagements with issuers

If ‘other’ has been selected, please give a description

19.6. Indicate how your organisation shares the outcomes of the engagements internally.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
We have a systematic process to ensure the outcomes of engagements are made available
We occasionally make the outcomes of engagements available
Other, describe
We do not make this information available
We do not share the outcomes of the engagements internally

If ‘other’ has been selected, please give a description

19.7. Additional information.[OPTIONAL]

Our fixed income investment teams engage with issuers to varying degrees. Typically our fixed income engagements are led by the investment team but may be done in conjunction with our CGRI team.  The CGRI team will communicate internally with other investment teams when an engagement may impact other asset classes in the issuer being engaged.

BlueBay communicates engagement activity internally on an ad hoc basis most commonly by advising relevant individuals or by communicating through the relevant cross desk sector analyst forum groups, where the issues can be discussed in a wider context.


FI 20. Engagement policy disclosure

20.1. Indicate if your publicly available policy documents explicitly refer to fixed income engagement separately from engagements in relation to other asset classes.

20.2. Please attach or provide a URL to your fixed income engagement policy document. [Optional]

20.3. Additional information [OPTIONAL]

Our Approach to Responsible Investment has a separate section that addresses fixed income engagement.  BlueBay also publishes an ESG Investment Risk Policy.


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