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Dana Investment Advisors

PRI reporting framework 2018

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

(C) Implementation: Integration

FI 11. Integration overview

11.1. Describe your approach to integrating ESG into traditional financial analysis.

ESG integration helps to evaluate future cash flows and credit worthiness. As a high credit asset management firm, our clients value our reliable, conservative approach. Deeper ESG analysis is another tool to uncover risks not yet built into credit ratings, such as environmental accidents or mismanagement, disrupted business models  (i.e. auto companies as shift to EVs), exposure to natural disasters and changing regulatory environment. Labor relations, security issues, workforce diversity, incentive structures are other indicators of best-in-class practices or failures. We seek to avoid the price volatility as a result of potential headline risks. We use ESG analysis to hone in on companies distinguishing themselves in a wide array of areas and also as a way to evaluate the potential for these securities to continue to excel or falter. Green Bonds are another area where we can drive our Strategies' positioning toward a low carbon economy. We have increased our weight to these issues as the space has grown in the last few years. 

 

11.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

Corporate (financial)

ESG integration helps to evaluate future cash flows and credit worthiness. As a high credit asset management firm, our clients value our reliable, conservative approach. Insurance companies and bank holdings present additional opportunities to distinguish issues with respect to geographical exposure and industry exposure via their underwriting, loan portfolios or investment portfolios. This is part of our security selection and risk management processes. More Green Bonds are being issued by financials, such as banks and REITS, so we are availing ourselves of opportunities for clients in this space.

 

 

Corporate (non-financial)

ESG integration helps to evaluate future cash flows and credit worthiness. As a high credit asset management firm, our clients value our reliable, conservative approach. We use ESG to hone in on companies distinguishing themselves in a wide array of areas and also as a way to evaluate the potential for these securities to continue to excel. Avoiding fossil fuel producers and increasing exposure to industries deploying more renewables, are one forward-looking example.

Securitised

Our Limited Volatility Strategy holds high quality, short duration instruments including securitized loans. It has never delivered a negative returning calendar year, thus our managers are focused on governance and creditworthiness. Allocating more toward SBAs allows us to provide a social component while preserving a AAA credit.

11.3. Additional information [OPTIONAL]


FI 12. Integration - ESG information in investment processes

12.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
Corporate (financial)
Corporate (non-financial)
Securitised
ESG analysis is integrated into fundamental analysis
ESG analysis is integrated into security weighting decisions
ESG analysis is integrated into portfolio construction decisions
ESG analysis is a standard part of internal credit ratings or assessment
ESG analysis for issuers is a standard agenda item at investment committee meetings
ESG analysis is regularly featured in internal research notes or similar
ESG analysis is a standard feature of ongoing portfolio monitoring
ESG analysis featuresĀ in all internal issuer summaries or similar documents
Other, specify

12.2. Additional information [OPTIONAL]


FI 13. Integration - E,S and G issues reviewed

13.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

Securitised

Environmental

Social

Governance

13.2. Please provide more detail on how you review E, S and G factors in your integration process.

Corporate (financial)

Portfolio Managers review models frequently and formally as a team. Any significant changes, issues, advocacy efforts are discussed as well as recent/potential trades and their rationales. We have an online internal research tool and shared spreadsheets to manage the information and assure it is available to decision makers.

Corporate (non-financial)

Portfolio Managers review models frequently and formally as a team. Any significant changes, issues, advocacy efforts are discussed as well as recent/potential trades and their rationales. We have an online internal research tool and shared spreadsheets to manage the information and assure it is available to decision makers.

Securitised

Portfolio Managers review models frequently and formally as a team. Any significant changes, issues, advocacy efforts are discussed as well as recent/potential trades and their rationales. We have an online internal research tool and shared spreadsheets to manage the information and assure it is available to decision makers.

13.3. Additional information.[OPTIONAL]

Portfolio Managers review models frequently and formally as a team. Any significant changes, issues, advocacy efforts are discussed as well as recent/potential trades and their rationales. We have an online internal research tool and shared spreadsheets to manage the information and assure it is available to decision makers.


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