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Nykredit Realkredit Group

PRI reporting framework 2018

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (A) Implementation: Screening

(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

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

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

All funds are screened quarterly against norms breaches. The Nykredit exclusion list, which consists of companies in breach with conventions on weapons as well as breaches og Global Compact principles, which engagement has not been able to change, also applies.

Two fund, a HY and an IG, also excludes fossil fuels and controversial companies i.e. alcohol, tobacco and breaches of international norms.

Nykredit will engage which any company in a portfolio that breaches a norm. 

Nykredit has set up systems that block any issuance from the excluded companies. The negative screening list are up dated weekly. The system is set up identifying the issuer and so also excluding new issuance. Benchmarks are also screened as a precautionary measure.

SSA is also screened quarterly and the exclusion list is revisited ongoing and at least evaluated biannually.

04.3. Additional information. [Optional]


FI 05. Negative screening - overview and rationale

05.1. Indicate why you conduct negative screening.

SSA

SSA

Corporate (financial)

Corporate (fin)

Corporate (non-financial)

Corporate (non-fin)

Securitised

Securitised

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

The SSA approach screens out the sanctioned countries eventhough the bonds might not be mentioned directly. The screen also excludes countries with a low and decreasing ESG-performance. A country could have a low rating, but it would need to have a positive outlook og positive ESG-performance to past few years.

The HY and IG funds exclude fossil fuels. These are innovated from direct customer demand. Some of the customers wants to exclude fossil fuels from a risk perspective, while others find fossil fuel investments in conflict with the defined goals of their organisations. 

05.3. Additional information. [Optional]


FI 06. Examples of ESG factors in screening process

06.1. Provide examples of how ESG factors are included in your screening criteria.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Venezuela SSA is excluded, because of the deteriorating basic political freedoms and negative democratic development.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Wells Fargo is excluded from some funds because of the several cases of fradulent behavior towards customers and investors.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Ecolab is excluded because of its revenues deriving from servicing fossil fuel companies.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Nutrien is excluded for breaches of international norms through its continued sourcing of phosphate rock from occupied Western Sahara, without the consent of the Sahwhari people as described in the agreement between Marocco and the Polisario/ UN.

06.2. Additional information.


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?
Norms-based screening

07.2. Additional information. [Optional]


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