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

Nykredit Realkredit Group

PRI reporting framework 2018

Export Public Responses
Pdf-img

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.

Nykredit believes that companies caring about their customers, employees and rest of society are more profitable. A company who decides to be part of the solution rather than the problem will have reduced their risk and improved opportunities all other things being equal.

When applied to bonds the improved risk assesment is at the forefront, but the future should capture the opportunity part as well.

 

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

SSA

The SSA issuer focussing on improved education, reduction of corruption og freedom of speech could be a be good opportunity. 

Corporate (financial)

The strong governance of the financial corporate issuance is a strong way to reduce risk. Access to finance could be an opportunity. And risk assesment related to the TCFD will soon be a must.

Corporate (non-financial)

The corporate issuer deeply rooted in the oil industri and with a strong balance sheet has huge risks related to green transition. 

Securitised

Whereas the issuer of securitised bonds with a very strong credit policy and a loan book a high porportion of ecological farmers and climate friendly housing might have reduced risks compared to traditional analysis.

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 (financial)
Corporate (non-financial)
Securitised
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 (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

Securitised

Environmental

Social

Governance

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

SSA

The E is focused on a combination of reliance on fossil fuels/fossil fuel production, polution and biodiversity. This is captured in some of the rating methodology, but also more in detail on the specific country.

The S is basic developmental meterics as education, unemployment rates, crime and health as well as demographics.

The G is democratic governance, basic freedoms and human rights. Another very important G-KPI is anti corruption.

Corporate (financial)

Governance is at the hearth of this analysis. And this is governance in a very broad sense. From board level to procedures. All are exposed to potential customer covered by international sanction, but some more than others. This is just one more example to highlight to importance of good governance in an industry deeply effected by malpractise and the resulting fines. Part of this metric is also finansial stability.

The S is related to financial product safety and access to finance. Privacy and human capital are very important as well.

Financing environmental impact is the natural E. Could be combined with aspects og green bonds.

Corporate (non-financial)

The E, S and G depends of the specific sector the issuers are doing business in. However the G is naturally very important.

Securitised

The governance of issuer is equally as important here as with financial coporates. So is the part it plays in the finansial stability. Access to finance and financing environmental impact could be a signal towards the use of proceeds. More interesting is however to look into what the proceeds themselves are financing and naturally the credit policy.

13.3. Additional information.[OPTIONAL]


Top