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Raiffeisen Capital Management

PRI reporting framework 2018

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ESG incorporation in actively managed fixed income

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
0 Screening alone
0 Thematic alone
0 Integration alone
10 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
90 No incorporation strategies applied
100%
Corporate (non-financial)
90 Screening alone
0 Thematic alone
0 Integration alone
10 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 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.

For all Fixed Income corporate investments a basic exculsionary screen is applied. In addition for dedicated ESG funds, we apply a more advanced strategy that incorporates also integration via our RCM-ESG-Score.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


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.

03.3. Additional information. [Optional]


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

For the majority of Corporates investments a basic Negative Screening (coal, controversial weapons) is applied. For the range of dedicated sustainability funds, a broad range of exclusionary screening, positive screening and norms-based screening is applied.

04.3. Additional information. [Optional]


FI 05. Negative screening - overview and rationale

05.1. Indicate why you conduct negative screening.

SSA

SSA

Corporate (non-financial)

Corporate (non-fin)

05.2. Describe your approach to ESG-based negative screening of issuers from your investable universe.

Raiffeisen KAG decided to ban issuers related to controversial weapons and coal. This basic screening is conducted for all funds, whereas for dedicated sustainability funds a detailed set of exclusionary criteria is applied.

05.3. Additional information. [Optional]


FI 06. Examples of ESG factors in screening process (Not Completed)


FI 07. Screening - ensuring criteria are met

07.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening?
Positive/best-in-class screening
Norms-based screening

07.2. Additional information. [Optional]


(C) Implementation: Integration

FI 11. Integration overview

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

We use a proprietary model to evaluate each company. This is measured by the "Raiffeisen ESG Score". We systematically try to maximise this Raiffeisen ESG Score for all dedicated sustainability products.

In the Raiffeisen ESG Scorecard sustainability information i.e. the Raiffeisen ESG Score is integrated as well as financial information.  When it comes to portfolio construction and decisions upon weighting of specific issuers, the Raiffeisen ESG Score plays a crucial role.

For the mainstream products the Raiffeisen ESG Score is not calculated yet. For those products exclusions only are applied so far.

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

SSA

The basic set up of two different ESG rating partners delivering detailed ESG data is the same for all asset classes. For SSAs the criteria set differs compared to corporate issuers.

 

Corporate (non-financial)

Our ESG approach is the same for all corporates and relates to the issuing corporate, therefore there are no adaptations necessary for Corporates (non-financial).

 

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
SSA
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
SSA

Environmental

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.

SSA

For dedicated sustainability portfolios, which also include SSAs, investment decisions are based on the Raiffeisen ESG Scorecard. This Scorecard integrates ESG information as well as financial information at the same time.

For mainstream portfolios ESG integration is not implemented yet.

Corporate (non-financial)

For dedicated sustainability portfolios, which also include Corporate bonds, investment decisions are based on the Raiffeisen ESG Scorecard. This Scorecard integrates ESG information as well as financial information at the same time.

For mainstream portfolios a basic exculsionary screen is applied, but ESG integration is not implemented yet.

 

13.3. Additional information.[OPTIONAL]


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