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Lombard Odier

PRI reporting framework 2017

Export Public Responses

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 03. Percentage of each incorporation strategy

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

03.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
98 %
Percentage of active listed equity to which the strategy is applied
1 %
Percentage of active listed equity to which the strategy is applied (+/- 5%)
1 %
Total actively managed listed equities 100%

03.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

  • Screening alone: Due to choices made by our organization to not invest in the companies which produce or distribute controversial weapons and neither participate in speculation on “essential food commodities” prices. Other screening strategies are applied on specific accounts to meet client demand
  • Screening + Integration: Due to the choice made by our organization to partner with Generation IM since 2007 to set up and distribute to our clients an ESG integration fund which has also to apply our group exclusion policies. Besides, we integrate ESG factors aside of Financial factors in our systematic factor based strategies.
  • Screening + Thematic: Due to choices made by our organization  and due to financial implications on companies’ expected returns, thematic strategies linked to overall demographics have been implemented into our Public fund "LOF Golden Age" which is a thematic fund on ageing population.

03.3. Where assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Most of our screening strategies are relative to our two Group Exclusion policies regarding the ban on investments in companies linked to production and distribution of controversial weapons and the ban of investment in financial instruments directly linked to “essential food commodities”. This negative screening is imposed to all our fund managers, for some specific funds other ESG strategies such as other screenings,  integration or thematic are applied on the screened investible universe.

LEI 04. Type of ESG information used in investment decision (Private)

LEI 05. Information from engagement and/or voting used in investment decision-making (Private)

(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


Negative/exclusionary screening :

  • Product: firearms (specific funds), GMO (specific funds) and tobacco (specific funds)
  • Activities: Essential food commodities: soja, wheat, rice and corn (all funds), adult entertainment (specific funds), gambling (specific funds), nuclear power generation and related services (specific funds),
  • Country: All the countries sanctionned by UN, EU or Swiss governement.
  • Environmental and social practices and performance: Child labor and child labor through suppliers (specific funds), high and severe social or environmental-related controversies (specific bond funds)
  • Corporate governance: high and severe governance-related controversies (specific bond funds)

Screened by


  • Environmental and social practices and performance: exclusion of the last quintile of worst ESG-scored companies (specific funds)
  • Corporate governance: exclusion of the last quintile of worst ESG-scored companies (specific funds)

Screened by

          The Ottawa Treaty on landmines, the Convention on Cluster Munitions, the Biological and Toxin Weapons Convention, The Chemical Weapons Convention


  • Exclusion of companies involved in serious breaches of UN Global Compact Principles (specific funds). These controversies are graduated according to the seriousness of the facts: evaluation of the incident's impact, Degree of the incident exceptionality (sector specific), recurrence level, assessment of the company response, consideration of the company response etc.
  • Exclusion of companies involved in proven breaches of International Labor Organization Conventions: Child labor and child labor through suppliers (specific funds),
  • Other: Exclusion of companies involved in producing or distributing controversial weapons: The Ottawa Treaty on landmines, The Convention on Cluster Munitions, The Biological and Toxin Weapons Convention, The Chemical Weapons Convention (all funds)

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.

Screenings criteria are established in 4 different ways:

  1. Applying our corporate exclusion policies (controversial weapons and "essential food" commodities). A list of companies involved in cluster weapons, depleted uranium, white phosphorus and anti-personal mines manufacturing or distributing is put together by our SRI team with the help of external ESG data provider and is quarterly updated.
  2. Applying criteria to track down Child labor. Child labor is examined directely in the company or through its suply chain. The information is updated on a monthly basis.
  3. Applying screenings based on major breaches of UN Global Compact principles. In order to implement this screening we use a serie of controversy indicators which scales the number, the impact and the seriousness of incidents a company is going through. This screening can be applied through all ESG concerns or through specific E, S or G issues. This information is weekly updated.
  4. Applying screenings using our proprietary ESG scores. Lombard Odier has created an in-house expertise to build customized ESG scores and developed the capacity to test them. The score customization enables us to meet the client values in our scorings. Lombard Odier has set a standard ESG score using its propriatary ESG/CAR methodology to implement screenings when no client guidelines indicate a perticular scoring methodology. The score and its components are updated on a daily basis and enables Lombard Odier to propose different fields of screening: Environment, Social, Governance in a static view, or Consciousness, Actions and Results in a more dynamic view. Any combination of these fields is also available.

We notify clients when changes are made through monthly, quarterly or bi-annual SRI dedicated reports, including information related to scores, positive, negative and norm-based screening. Detailed comments are systematically provided with our reports, together with research and more detailed explanations about companies that went through significant changes.

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]

Thanks to our quantitative data processing platform, all extreme score changes or appearance of potential new exclusions is duely examined on a regular basis.

LEI 08. Processes to ensure fund criteria are not breached (Private)

(B) Implementation: Thematic

LEI 09. Types of sustainability thematic funds/mandates

09.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

09.2. Describe your organisation’s processes for sustainability themed funds. [Optional]

Lombard Odier believes that demographics is one of the major explanatory factor that determine economic evolution over the long-term. Following this principle it has identified aeging population phenomenon as the most relevant demographic sustainable trend worldwide. Investors can invest in this theme through our equity fund called LOF Golden Age . This fund have required a specific expertise to identify relevant investment universes. Investment teams, SRI team and a thematic dedicated scientific advisory board (gathering high level academic, industry and finance backgrounded people) work together to define and update the thematic investment universes according to road maps and latest innovations.

Therefore, companies are elligible to the LOF Golden Age if they bring solutions to ageing population or give more comfort to our seniors. Financially this can be translated in having a significant share of their revenues or profits coming from customers age 55 or more what ever business they are in. "Healthcare" is obviously the most important sector involved in this theme, but others such as "leisure" and "household & personal products" can also be important.

The portfolio managers with the help of our financial analyst will then pick the most promising companies within the above defined investible universe and build a relevant risk diversified portfolio.

Fund managers have access to the ESG information produced by the SRI team and can take it into account when questionning the companies regarding their exposure to non-financial risks.

Moreover, Lombard Odier has developed since 2007 a partnership with Generation IM that manages our fund "LOF Generation Global". The fund focuses on long-term investment and integrate sustainability research within a rigorous fundamental equity analysis framework. It integrates economic, environemental, social and governance themes with broad industry trends, identifying potential investment candidates. After price assessment, it focuses on valuation, quality and conviction.

(C) Implementation: Integration of ESG issues

LEI 10. Review ESG issues while researching companies/sectors

10.1. Indicate if E, S and G issues are reviewed while researching companies and/or sectors in active strategies.

ESG issues

Coverage/extent of review on these issues





Corporate Governance

Corporate Governance

10.2. Additional information. [Optional]

For dedicated SRI funds and mandates we systematically applies E,S,G analysis.

For the other funds, depending on the sensitivity of the company's sector to ESG issues or the importance of a controversy affecting it, fund managers will try to assess the ESG risk in their final investment decisions. ESG information issued by the SRI team is available to help them to make their assessment.

LEI 11. Processes to ensure integration is based on robust analysis (Private)

LEI 12. Aspects of analysis ESG information is integrated into (Private)