This report shows public data only. Is this your organisation? If so, login here to view your full report.

Edmond de Rothschild Asset Management (France) (EDRAM)

PRI reporting framework 2018

Export Public Responses
Pdf-img

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

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
50 Screening alone
0 Thematic alone
0 Integration alone
49 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
73 Screening alone
0 Thematic alone
0 Integration alone
26 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
73 Screening alone
0 Thematic alone
0 Integration alone
26 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%

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

The choice of SRI/ESG strategies, i.e. screening and ESG integration, is based on the four following drivers:

  • A combination of strong ESG and financial convictions with the view to enhancing the appreciation of the risk of default by the debt issuers.
  • The development of a complementary analysis to refine the knowledge of debt issuers and reduce the risk of controversy
  • The desire to develop innovative analysis and investment tools for our clients that  meet new ESG-related demands from institutional clients

Concerning the combination of RI strategies:

  • all of our investments in corporate debt issuers apply a negative screening approach based on the exclusion of companies whose business is in any way related to cluster bombs and anti-personnel landmines, and related to banned countries for the sovereign/corporate debt issuers

    the positive screening is implemented through one open-ended SRI corporate bond fund: EdR Euro Sustainable Credit

  • the ESG integration is implemented through an ESG research accessible by the FI team  as well as their active involvement  in the refection and implementation of concrete ESG integration projects led by the in-house RI team.

01.3. Additional information [Optional].

CORPORATE DEBT ISSUERS

Since 2014, Edmond de Rothschild Asset Management (France) has extended its SRI/ESG expertise to its credit bond management via:

the launch of its first SRI open-ended credit fund on 1 September 2015: Edmond de Rothschild Euro Sustainable Credit. This euro zone credit fund applies an SRI approach with a positive best-in-universe screening of mostly Investment Grade securities, but with a diversification pocket of High Yield securities. Its approach aims to favour the most performant firms in terms of ESG so as to offer the fund manager an additional appreciation perspective, enabling him to fine-tune his assessment and, ultimately, his level of confidence in respect of their levels of exposure to a default risk.

an ESG integration strategy: the development of this SRI fund generated concomitantly the development of an ESG integration strategy for euro zone corporate debt issuers by offering, upon request, the ESG research data on these issuers to the Credit team composed of 14 fund managers-analysts. Presently, an access to the in-house ESG research is possible on a shared file easily accessible, and on demand to the SRI Credit manager for  the analysis produced by the extra-financial agency -Sustainalytics - for the rest of the credit universe not covered by our in-house ESG research team. In a second phase, the integration of ESG data related to corporate debt issuers within our in-house instruments reference data is a started in 2017 that will expand in 2018.

 

Furthermore, all of our investments in corporate issuers apply a negative screening approach (used systematically across all the asset management company's funds) based on a negative / exclusionary screening of companies whose business is in any way related to cluster bombs and anti-personnel mines, in accordance with the Oslo Treaty and the Ottawa Convention signed by the French Government.

SOVEREIGN DEBT ISSUERS

In addition, Edmond de Rothschild Asset Management (France) has implemented an advanced ESG integration  approach for euro zone sovereign debt issuersd with its Asset Allocation and Sovereign Debt teams.

 

NEGATIVE SCREENING APPLIED FOR THE SOVEREIGN AND CORPORATE DEBT ISSUERS

At last, a negative screening is also applied for the sovereign  and corporate debt issuers according to the main global legal constraints such as countries under embargoes, that finance terrorism, subject to financial sanctions or still are part of the money laundering blacklist. For more explanations, please refer to FI 05.3.  


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

specify description

          Official databases: Eurostat, Transparency International, PISA, AEE, Institute for Economics ﹠ Peace
        

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

The work carried out by the RI team leverages on a proprietary research, based on an in-house ESG analysis matrix and scoring model fed with complementary data obtained from a variety of sources:

  • From the companies being analysed (CSR publications and corporate websites, meetings with company management)
  • Provided by external extra-financial rating agencies (broad-based agencies such Sustainalytics, or specialist players (RepRisk for controversial issue alert systems))
  • From brokers producing ESG focused research (CA CIB, Natixis, Oddo, ,…)
  • From agencies specialized in governance analysis (Proxinvest and ISS)
  • From other data providers (Bloomberg, CDP,…), stakeholders (NGOs, outside experts, trade unions …) and public databases

A joint ESG analysis model is applied, both for the eurozone equities and the corporate bonds, and for the ESG incorporation strategies developed.  In order to reach a global coverage on the credit universe, this extension of the ESG analysis capabilities has been made through a partnership with the  extra-financial agency Sustainalytics. Consequently, since 2017, the ESG research is available for around 6 000 European and global companies, including 2600 corporate debt issuers (against 670 in 2016.

For the eurozone sovereign debt issuers, a proprietary ESG scoring model is fully implemented and updated regularly.

02.4. Additional information. [Optional]


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.

          Few ESG factors, particularly those on governance, are taken into account by our in-house credit management team to evaluate corporate issuers credit quality.
        

03.3. Additional information. [Optional]

The ESG Sovereign debt scoring model has been definitively  upgraded with in 2017 with the integration of an new criteria to reflect the SDG. The ESG analysis of the countries is systematically integrated in the fundamental analysis of each Interest Rate Committee

For the ESG Corporate Debt scoring model: Our rating methodology and the matrix for ESG analysis were drawn up following a survey of existing data frameworks (eg, UN Global Compact, OECD or ILO-led conventions). Our ESG rating model was built with weightings that differ from the sector-based ESG criteria which take the specificities of each sector into account.

The ESG ratings of companies covered by our in-house extra financial analysis are updated every 18 to 24 months.

Even if the fundamental ESG pillars of our RI research are not set to change, within them, the criteria or weightings can evolve according to their pertinence or enhance following the identification of new sustainable development issues.

Our Internal Control department carries out an annual review of the ESG research methodology. This involves checking the factsheets and the in-house ESG ratings for every stocks and corporate debt issuers within the SRI credit bond fund portfolio.


Top