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Tikehau Capital

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.

For potential investment in private direct lending activities, a summary of the ESG analysis grid is included in the investment case submitted for approval to the Investment Committee.

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

Corporate (non-financial)

For listed bonds, the ESG analysis mainly involves the integration ESG evaluations into investment recommendations. Meetings with company executives are also conducted where possible (e.g. during roadshows). 

For private direct lending, Tikehau teams conduct a more in depth due diligence based on an extended questionnaire. If the investments materializes, the loan agreement will include an ESG clause setting out Tikehau Capital’s ESG commitments as well as engaging management of the target to adopt a progressive approach in carrying out their business combining economic interests and corporate responsibility. An ESG information request clause will also be included in the contractual documentation. Further, the ESG monitoring will be based on in-depth interaction with the executives of the company especially for sponsorless private debt.

11.3. Additional information [OPTIONAL]

Levels of ESG integration primarily depend on the availability of ESG data as well as the level of interaction with management. 


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 (non-financial)
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 features 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 (non-financial)

Environmental

Social

Governance

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

Corporate (non-financial)

Our ESG analysis grid encompasses 3 pillars. The Tikehau Capital teams are convinced that corporate governance is an essential factor of performance and risk control and hence a weight of 40% is given to this factor. A weight of 30% is given to social and environmental pillars. 

13.3. Additional information.[OPTIONAL]


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