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UBS Asset Management

PRI reporting framework 2018

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - INF 03]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG issues [LEI 08 - 10] ESG incorporation in passively managed listed equities [LEI 11] Outputs and outcomes [LEI 12 - 14]
Direct - Listed Equity Active Ownership
Engagement [LEA 01 - 14] Overview [LEA 01 - 02] Process [LEA 03 - 10] Process for engagements run internally [LEA 03 - 04] Process for engagements conducted via collaborations [LEA 05 - 06] General processes for all three groups of engagers [LEA 09 - 10] Outputs and outcomes [LEA 11 - 14] (Proxy) voting and shareholder resolutions [LEA 15 - 24] Overview [LEA 15] Process [LEA 16 - 20] Outputs and outcomes [LEA 21 - 24]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 13] Implementation processes [FI 01 - 03] (A) Implementation: Screening [FI 04 - 07] (B) Implementation: Thematic [FI 08 - 10] (C) Implementation: Integration [FI 11 - 13] ESG incorporation in passively managed fixed income [FI 14] Outputs and outcomes [FI 18 - 19]
Direct - Property
Overview [PR 01] Fundraising of property funds [PR 02 - 03] Pre-investment (selection) [PR 04 - 06] Selection, appointment and monitoring third-party property managers [PR 07] Post-investment (monitoring and active ownership) [PR 08 - 14] Overview [PR 08] Property monitoring and management [PR 09 - 10] Property developments and major renovations [PR 11] Occupier engagement [PR 12 - 13] Community engagement [PR 14] Outputs and outcomes [PR 15 - 16]
Direct - Infrastructure
Overview [INF 01 - 02] Fundraising of infrastructure funds [INF 03 - 04] Pre-investment (selection) [INF 05 - 09] Selection, appointment and monitoring of third-party operators [INF 10] Post-investment (monitoring and active ownership) [INF 11 - 16] Overview [INF 11] Infrastructure monitoring and operations [INF 12 - 14] Infrastructure maintenance [INF 15] Stakeholder engagement [INF 16] Outputs and outcomes [INF 17 - 18] Communication [INF 19]
Assurance
Assurance [CM1 01.1 - 01.7]
Export Public Responses
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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.

UBS aims to be a leader in sustainability in the financial industry. This requires us to focus on the long term and to work to provide consistent returns to our stakeholders. It also requires us to promote the common good by being proactive, purposeful and accountable. At UBS Asset Management we are committed to acting as responsible investors on our clients' behalf. Across our traditional investment areas, recognizing the growing importance of ESG, we have established a general approach and commitment to addressing environmental, social and corporate governance factors.

Within fixed income, analyst recommendations are centrally stored and shared with portfolio managers globally, and analyst credit recommendations are discussed in regularly scheduled credit committee meetings, in which individual cases are discussed in a centralized manner with portfolio managers globally. ESG recommendations are included as part of the credit analysts' credit research and are also subject to the considerations of and discussions with Sustainable Research team representatives.

By providing integrated recommendations that consider ESG risks and opportunities, UBS avoids portfolio managers being forced to choose between the sustainability and the financial attractiveness of companies when making their stock selections, given that ESG considerations are taken into account in the research recommendations.

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

Corporate (financial)

The process of ESG integration, as described in our response to question FI 11.1 above, applies to all types of fixed income we invest in.

Corporate (non-financial)

The process of ESG integration, as described in our response to question FI 11.1 above, applies to all types of fixed income we invest in.

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
Corporate (financial)
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]

Broadly speaking, UBS Asset Management pursues the integration of material sustainability factors into all analyst recommendations, which impacts all actively managed strategies. Through the integration of sustainability factors into the research process, the precise weight of sustainability across mainstream strategies will vary depending on the materiality and relevance of the sustainability issues for particular company cases. Fixed income and equity analysts assess material sustainability factors by considering the UBS proprietary score, as well as MSCI ESG Research reports. In addition, the Sustainable Investment Research and Engagement team has regular interaction with both fixed income and equity research teams to support materiality analysis of sustainability factors across various industries, as well as support on individual company cases.

Within fixed income, analyst recommendations are centrally stored and shared with portfolio managers globally, and analyst credit recommendations are discussed in regularly scheduled credit committee meetings, in which individual cases are discussed in a centralized manner with portfolio managers globally. ESG recommendations are included as part of the credit analysts' credit research and are also subject to the considerations of and discussions with Sustainable & Impact Investing team representatives.

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
Corporate (financial)

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.

Corporate (financial)

We believe that fundamental, material ESG factors are best assessed as part of the company research process. These factors are fundamental in nature and need to be analysed as an integral part of the due diligence process, included in our estimation of cash flows and valuation metrics.

Corporate (non-financial)

We believe that fundamental, material ESG factors are best assessed as part of the company research process. These factors are fundamental in nature and need to be analysed as an integral part of the due diligence process, included in our estimation of cash flows and valuation metrics.

13.3. Additional information.[OPTIONAL]

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