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Loomis, Sayles & Company, L.P.

PRI reporting framework 2018

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Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

Objectives are within the purview of the ESG Committee.  The ESG committee meets periodically to review the responsible engagement activities of Loomis Sayles, to further the integration of ESG issues into the investment process (including providing state of the art tools to Loomis Sayles' investment professionals), to oversee activities related to membership in advocacy groups, including the UNPRI and the UK Financial Reporting Council (UK Stewardship Code), and to further the progress of Loomis Sayles in engaging with issuers on matters of environmental, governance and social practices.  Further, a subcommittee of the ESG Committee meets at least monthly to plan and deliver internal training, to identify external training opportunities, to prepare public statements on ESG activities at Loomis Sayles and other communications (including for specific clients), to prepare the UN PRI assessment, and to address other ESG-related matters.

SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          Delivery of training on ESG incorporation to investment professionals.  Increased dialogue on ESG integration as a result of the training.

Progress achieved

Training was delivered to almost all investment professionals, with remaining groups scheduled for early 2018.  Follow-up education that was prompted by the original sessions is currently being prepared.  A result of the training has been increased dialogue and implementation of such things as measurement tools (e.g., carbon footprint analysis).  Subsequent discussions have also led to an assessment of additional service providers and more focused ESG incorporation by the investment professionals.

Key performance indicator

          Delivery of training on ESG engagement to investment professionals.  Increased dialogue on ESG engagement as a result of the training.

Progress achieved

Included in the training discussed above was an explanation of and a need for engagement on ESG matters.  As discussed above, such training occurred for the majority of investment professionals, with the remainder scheduled for early 2018.  The resulting dialogues led to a greater understanding of the interactions necessary to influence issuers' behavior in furtherance of improved ESG practices.

Key performance indicator

          Deliver ESG training across investment groups and to encourage greater population of the ESG engagement database.

Progress achieved

Training was delivered to almost all investment professionals, with remaining groups scheduled for early 2018.  Training included (1) an emphasis on the value to our ESG efforts of populating the ESG engagement database, including providing examples of engagement activites, such as discussions with management about E, S or G issues; and (2) delivery of written educational materials, policy statements and examples of ESG resources available to the investment professionals. 

Key performance indicator

          Delivery of training on ESG incorporation to investment professionals.

Progress achieved

Our research analysts evaluate a wide range of investment criteria to assess the quality of an issuer, including potential ESG-related risks and opportunities that could impact decisions regarding investment selection.  Specifially, the analysts strive to develop a thorough understanding of an issuer's management strength and strategy, governance, and use of human and natural resources, as well as regulatory and political risks.  These factors are critical to evaluating the long-term sustainability of an issuer, its profitability, and, ultimately its expected contribution to client portfolios.  

In 2016, our efforts were focused on increasing awareness among our investment professionals that the risks associated with ESG issues were included within the fundamental research and risk analysis conducted by them, without specifically identiyfing those risks as related to E, S and G matters.  This year, a major objective of the training described above was to emphasize to the investment professionals the importance of identifying and focusing specifically on ESG risks in order to take them into consideration in the management of their investment portfolios.  Feedback indicates that, as a result of the training, ESG matters figure more prominently in determining the desirability and suitability of investments.

Financial performance of investments

other description (1)

          To monitor correlation between higher ESG quality and higher portfolio performance.

Key performance indicator

          To enhance ESG review in the investment risk review processes

Progress achieved

Loomis Sayles' "invesment risk review" was previously called "peer review". In 2016, we initiated the inclusion of ESG analysis into attribution vs. performance portion of the peer review.  In 2017, we elaborated on the attribution analysis and required further articulation of ESG awareness and consideration of the risks and opportunities of lower rated ESG securities' inclusion in a portfolio.

ESG characteristics of investments

Other activities

06.2. Additional information.