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KEPLER-FONDS KAG

PRI reporting framework 2018

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income

ESG incorporation in actively managed fixed income

Implementation processes

FI 01. Incorporation strategies applied

01.1. Indicate 1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and 2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.

SSA
8.08 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
91.92 No incorporation strategies applied
100%
Corporate (financial)
16.88 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
83.12 No incorporation strategies applied
100%
Corporate (non-financial)
20.69 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
79.31 No incorporation strategies applied
100%
Securitised
9.45 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
90.55 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

KEPLER's first ethical bond fund - KEPLER Ethik Rentenfonds - was issued in May 2003, therefore, nearly 13 years ago. KEPLER was aware of the importance of sustainable investments quite early and also was aware of its responsibility to promote this kind of investment strategy. In the course of the years, different ethical special funds for institutional investors were issued.

High transparency, independent partners (such as oekom research AG) and an ongoing dialogue with the partners as well as a continuous development of the investment approach are vital for the success of KEPLER's ESG investment approach. As far as ethical bond management is concerned, KEPLER makes use of a wide range of exclusion criteria, which are screened and therefore the basis for all investments in KEPLER Ethik Rentenfonds as well as different special funds (partly with their only individualised exclusion criteria). Exclusion criteria vary between criteria applicable for countries and criteria applicable for companies. ESG analysis doesn't vary across issuer types (meaning, criteria apply for any bond/issuer). We experienced that with this strategy, our understanding of ethical investment is covered best.

Other strategies or combinations of strategies are not applied with KEPLER.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

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

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

KEPLER's ethical committee agreed on a comprehensive list of exclusion criteria including products, activities, sectors, environmental and social practices and corporate governance. Operationalisation of criteria is done by oekom research AG. Additionally, positive criteria are applied. KEPLER's ESG provider oekom research established a sector-based ESG-matrix comprising social and environmental impact. The higher social and environmental impacts of a sector, the higher requirements for ESG management. This implies higher barriers to receive 'prime' status. Moreover, an array of international norms are considered.

Screening criteria are established by oekom research and are continuously reviewed and discussed in the KEPLER Ethics Committee. Oekom research screens more than 3.800 companies and 56 countries and the EU.

Concerning companies, a best-in-class approach rates companies on the basis of about 100 sector-specific criteria. Additionally, exclusion criteria are applied. As far as countries (and EU) are concerned, a best-in-class approach rates countries on the basis of about 100 environmental and social criteria. Additionally, exclusion criteria are applied.

Oekom research's rating criteria are continuously reviewed by oekom and its rating committee in different intervals. If a change in exclusion criteria is made, new criteria are published online.

04.3. Additional information. [Optional]


FI 05. Negative screening - overview and rationale

05.1. Indicate why you conduct negative screening.

SSA

SSA

Corporate (financial)

Corporate (fin)

Corporate (non-financial)

Corporate (non-fin)

Securitised

Securitised

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

Here, we would like to refer to question 04.2 and 02.3.

Additionally, we would like to point out that in some cases of our insitutional clients exclusion criteria have to be applied for legal reasons.

05.3. Additional information. [Optional]


FI 06. Examples of ESG factors in screening process (Private)


FI 07. Screening - ensuring criteria are met

07.1. 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

07.2. Additional information. [Optional]


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