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

UBS Asset Management

PRI reporting framework 2018

Export Public Responses
Pdf-img

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 01. Percentage of each incorporation strategy

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
99 %
Percentage of active listed equity to which the strategy is applied
1 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

In our active equities investment area, material ESG factors are assessed as part of research and stock selection processes. Our analysts produce in-depth company analysis, and work with our specialist Sustainable and Impact Investing (SII) Research team and the Sustainable Equities team to evaluate questions on the governance and environmental and social risks of companies. The analysts' research is supplemented with ESG data from both the UBS ESG Factor Model and various external providers.

During 2017, we incorporated the ESG score in our equity research library platform and developed new tools to flag ESG research and track engagement. These tags are monitored on an on-going basis by the Sustainable and Impact Investing Research team and, where needed, the team provides support to the equity analysts on ESG risks and opportunities for individual company cases or across an entire sector. This feedback loop allows for a comprehensive assessment of companies.

In addition, UBS AM's dedicated Sustainable Equities team manages a range of strategies that integrate material sustainability factors with a rigorous fundamental investment process. The team actively looks for companies that appear attractively valued, with a high sustainability profile and that can benefit from secular themes, such as energy and water conservation, health care, demographics and other long-term trends. On one hand, the Sustainable Equities team leverages UBS AM's wider Equities analyst platform and on the other hand, the Equity Analysts leverage the Sustainable Equities team knowledge and understanding of ESG factors as well as their proprietary ESG Factor Model.

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]


LEI 02. Type of ESG information used in investment decision (Private)


LEI 03. Information from engagement and/or voting used in investment decision-making (Private)


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

UBS Group has set standards in product development, investments, financing and supply chain management decisions, which include the stipulation of controversial activities and other areas of concern UBS will not engage in, or will only engage in under stringent criteria. As such, UBS AM will not invest in companies involved in the development, production or purchase of cluster munitions and anti-personnel mines determined to fall within the Swiss Federal Act on War Materials. Equally, we will not invest in any countries and/or regions that have been identified on the UBS Group Sanctioned List. In addition, on client request, we are able to (and do) apply client-specific exclusion lists to segregated mandates based on particular ESG themes such as tobacco, alcohol, gambling and/or adult entertainment. These exclusions are either based on particular sector classifications or based on the percentage of company revenues derived from particular activities.

Screened by

Description

Our Sustainable Equities strategies are primarily positive screening strategies that seek to invest in companies with  attractive  valuation and a strong sustainability profile. As equity investors, we look for companies that we believe can generate shareholder value, in part by approaching environmental, social and governance issues as drivers of competitive advantage, rather than treating sustainability merely as a box-checking exercise.

04.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

We use an external advisor to identify companies involved in the production, sale or distribution of cluster munitions and anti-personnel mines. The firm's Sanctions Compliance Committee issues a list of affected companies based on information provided by the external advisor. The list is updated periodically. Changes are implemented by the responsible Portfolio Managers and Trading. Portfolios undergo regular post-trade compliance checks.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]


LEI 06. Processes to ensure fund criteria are not breached (Private)


(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

Our dedicated Sustainable Equities team manages a range of strategies that integrate material sustainability factors with a rigorous fundamental investment process. We actively look for companies that appear attractively valued and can benefit from secular themes, such as energy and water conservation, health care, demographics and other long-term trends.

The Sustainable Equities team manages the Long-Term Themes Fund, a strategy launched in 2016 in partnership with UBS WM. Population growth, urbanization and an ageing society are global and inexorable trends that continue to reshape society and the economy. Given the persistence of these trends, the Chief Investment Officer of UBS WM has identified 19 enduring long term investment themes connected to the mega trends such as water scarcity and oncology. The UBS Long Term Themes Equity Fund invests in companies that have solutions to the challenges these trends represent to our societies.

The Sustainable Equities team is working with scientists from the City University of New York and Harvard University to develop methodologies to measure the impact of public companies on society and the environment on four selected themes: climate, water, food security & health. These themes touch on multiple UN SDGs, e.g. clean water and sanitation, clean energy, health and well-being, climate action and life on land. These models rely on publicly available data from companies, regulators and scientific publications along with UBS AM analytical resources. Partnering with academics is core to UBS Asset Management's philosophy to identify robust, credible and user-friendly impact metrics. Our research partnership also includes a key pension fund client. We are leveraging this research for the stock selection and management of the Global Impact Equity Strategy, launched in October 2017.


(C) Implementation: Integration of ESG issues

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate which ESG factors you systematically research as part of your investment analysis and the proportion of actively managed listed equity portfolios that is impacted by this analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

The UBS Factor Model includes 81 sustainability factors across 24 MSCI GICS industries. The architectural framework for our database parallels the SASB Materiality Map ™, with customised KPIs for different industries.

In 2017, we incorporated the ESG score in our equity research library platform and developed new tools to flag ESG research and track engagement. These tags are monitored on an on-going basis by the Sustainable and Impact Investing Research team and, where needed, the team provides support to the equity analysts on ESG risks and opportunities for individual company cases or across an entire sector. This feedback loop allows for a comprehensive assessment of companies.


LEI 09. Processes to ensure integration is based on robust analysis (Private)


LEI 10. Aspects of analysis ESG information is integrated into (Private)


Top