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Universities Superannuation Scheme - USS

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]

Carbon Footprint

We carbon footprint our fixed income portfolio’s by comparing the carbon intensity of the portfolio to the carbon intensity of the corresponding benchmark.  We find this a useful starting point from which to identify potential hotspots in our portfolios.

Back test

Back testing / modelling was employed in the development of the new investment process for the Emerging Markets Debt (local currencies) portfolio which uses the ESG country ranking as one of three core components for portfolio construction.

Performance

USS takes an integration approach to Responsible investment. We consider that it would be very difficult to attribute portfolio performance specifically to ESG factors.   It may  be easier to identify the impact on portfolio performance when screening out sectors (but this is not our approach).

We assess ESG performance at stock level rather than portfolio level.    We do not necessarily agree with all of the analysis and rankings produced by our external research providers.  We find it much more useful to analyse the detail behind the rankings and scores and leverage internal expertise.  This is more consistent with our bottom up approach to stock analysis.

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.

19.2. Additional information.

We do not make a distinction between Corporate financial and Corporate non-financial.


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