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Loomis, Sayles & Company, L.P.

PRI reporting framework 2018

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Outputs and outcomes

FI 18. Financial/ESG performance

18.1. Indicate whether your organisation measures how your incorporation of ESG analysis in fixed income has affected investment outcomes and/or ESG performance.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
We measure whether incorporating ESG impacts funds' reputation
We measure whether incorporating ESG impacts financial returns
We measure whether incorporating ESG impacts risk
We measure whether incorporating ESG impacts funds' ESG performance
None of the above

18.2. Describe how your organisation measures how your incorporation of ESG analysis in fixed income has affected investment outcomes and/or ESG performance. [OPTIONAL]

18.3. Additional information.[OPTIONAL]


FI 19. Examples - ESG incorporation or engagement

19.1. Provide examples of how your incorporation of ESG analysis and/or your engagement of issuers has affected your fixed income investment outcomes during the reporting year.

ESG issue and explanation

Topic -- environmental/carbon footprint

During a meeting with the management of a large E&P company, we questioned them on how they were operating a particular mine following its acquisition from another company. In particular, we inquired whether they had found or were looking for strategies to improve environmental standards. Management explained that they were looking at CO2 per barrel, a practice that was not done under the mine’s prior ownership. The previous owner was trying to minimize absolute CO2 emissions while the new company moved to a process to minimize CO2 per barrel. While the prior owner thought it was being environmentally friendly by trying to minimize absolute CO2 emissions, it was simply delaying the emissions of CO2 from the process and increasing the CO2 per barrel by stopping and starting the plant. By running the plant more efficiently and continuously, the new owner was able to lower the CO2 emissions per barrel. We were encouraged by this finding and advised the company to explore further avenues of environmental efficiencies.

Impact on investment decision or performance

Increased confidence in the holding.

ESG issue and explanation

Topic - Governance: Composition of Board

 

During one of our frequent meetings with a large automaker, we probed the composition and credentials of its current board of directors. In particular, we noted the absence of significant experience in the technology sector. This was a cause of concern given the huge investments that the automaker was making in the development of autonomous and electric vehicles, connectivity and new mobility solutions. Several months later, a new member was elected to the board, who had worked in a senior position for a technology company. We revisited the matter with the company to inquire whether our feedback was the catalyst for their selection of this board member. They responded that it was a combination of our inquiry as well as similar feedback from other asset managers. Since this exchange, we have continued to provide feedback regarding the composition of their board.      

Impact on investment decision or performance

Increased confidence in the holding.

19.2. Additional information.


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