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Wellington Management Company LLP

PRI reporting framework 2018

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

C) 実施:ESG問題の統合

FI 11. Integration overview

11.1. ESGを従来の財務分析に統合するアプローチを説明してください。

Wellington Management considers environmental, social, and corporate governance (ESG) criteria as one set of factors among many that should be weighed appropriately to inform investment decision making. To help our portfolio managers and investment teams better assess risks and opportunities in client portfolios, Wellington has integrated the analysis of ESG factors into our investment and risk-management processes firmwide. To aid in the integration of ESG analysis, our specialized in-house ESG team manages several investor tools, including an innovative portfolio review process, ESG ratings, and reference guides that examine ESG factors by sector and country. Our ESG team also works closely with our portfolio managers and analysts to engage with company managements each year.

11.2. 投資する債券の各種類に対してESG統合アプローチをどのように調整するのか説明してください。

SSA

For government bond portfolios, we have resources available to help investors assess the ESG risks or opportunities that would impact the long-term economic growth and sustainable development of the respective countries. For example, ESG issues relative to sovereign bonds can include political stability, corruption, social inequality, investment in education, and climate change management. 

In addition, portfolio managers may develop their own custom approach to ESG integration. For example, we employ a proprietary country scoring model in our Emerging Markets Debt approach that enables us to quantify the sovereign credit outlook for the 60 emerging market countries that we cover and rank them according to their credit strength from high to low. The primary aim of the model is to provide greater rigor to our country research and to highlight potential vulnerabilities in individual countries. The resulting score for each country is adjusted to reflect important qualitative factors such as political stability, which then facilitates cross-country comparisons. The country scoring model is one element of the research process, and as such the Portfolio Manager does not have to override the output of the model.

The scoring process begins with a top-down quantitative assessment of macroeconomic and debt sustainability conditions using a proprietary model that assigns a numerical score to each emerging markets country. The specific inputs and their weights in the model are proprietary, but they include what we have determined to be the key drivers of credit spreads, such as a country's economic performance and debt burden, the government's fiscal position, and the country's quality of governance. Overall, the model employs 10 factors that we found to be the most valuable in determining the credit strength of individual countries.

In emerging markets, however, quantitative measures alone cannot tell the whole story. Rather, the quantitative component of the analysis ensures that every country is reviewed with the same disciplined framework. Our team of experienced sovereign analysts then adapts the raw quantitative score to reflect those less quantifiable factors that may have a meaningful impact on credit spreads, such as political risk, central bank independence, and structural reform progress. Usually, the quantitative and fundamental credit scores are similar, however, in some cases; the politics are such that the final score is meaningfully different than the raw credit score, reflecting a greater credit risk than the numbers alone might imply.

The core of the country scoring model has remained consistent since the inception of our emerging markets debt approach in 1999. We do recalibrate the model every few years, however, in order to refine the specific factors and improve the effectiveness of the model.

社債(金融)

Our approach to corporates taps into the issuer research conducted by our central ESG Research team.
We provide central ESG integration resources to portfolio teams firm-wide, and we approach ESG integration as a tailored process that can be applied to all asset classes. We do this by analyzing ESG risks and opportunities in our clients' portfolios, engaging with companies in which we invest to discuss material ESG issues, and voting proxies on our clients' behalf to support decisions that we believe will maximize the long-term value of securities. Wellington Management's culture is built to support collaboration and our open-architecture "community of investors" naturally lends itself to the integration of ESG considerations.

Our ESG Research team, part of the central Investment Research function, helps our portfolio managers and analysts gather deeper intelligence on ESG topics and integrate these considerations into the investment process. We believe that a holistic understanding of how companies deploy capital - financial, physical, and human - is helpful in framing an investment thesis, and examining ESG issues gives us a more complete picture. Our ESG analysts are responsible for conducting in-depth analysis of the ESG factors most relevant to the sectors within their coverage area. They are also responsible for coordinating the ESG engagement strategies for the companies in their sectors with equity and fixed income analysts and portfolio managers. Our ESG team works closely with investment teams to incorporate our research into the investment process - regularly conducting in-depth portfolio reviews with investment teams to discuss holdings with the greatest ESG risks and strengths.

Each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within our proxy voting and company engagement efforts.

社債(非金融)

Our approach to corporates taps into the issuer research conducted by our central ESG Research team.
We provide central ESG integration resources to portfolio teams firm-wide, and we approach ESG integration as a tailored process that can be applied to all asset classes. We do this by analyzing ESG risks and opportunities in our clients' portfolios, engaging with companies in which we invest to discuss material ESG issues, and voting proxies on our clients' behalf to support decisions that we believe will maximize the long-term value of securities. Wellington Management's culture is built to support collaboration and our open-architecture "community of investors" naturally lends itself to the integration of ESG considerations.

Our ESG Research team, part of the central Investment Research function, helps our portfolio managers and analysts gather deeper intelligence on ESG topics and integrate these considerations into the investment process. We believe that a holistic understanding of how companies deploy capital - financial, physical, and human - is helpful in framing an investment thesis, and examining ESG issues gives us a more complete picture. Our ESG analysts are responsible for conducting in-depth analysis of the ESG factors most relevant to the sectors within their coverage area. They are also responsible for coordinating the ESG engagement strategies for the companies in their sectors with equity and fixed income analysts and portfolio managers. Our ESG team works closely with investment teams to incorporate our research into the investment process - regularly conducting in-depth portfolio reviews with investment teams to discuss holdings with the greatest ESG risks and strengths.

Each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within our proxy voting and company engagement efforts.

証券化商品

Our approach to securitised debt taps into the issuer research conducted by our central ESG Research team.
We provide central ESG integration resources to portfolio teams firm-wide, and we approach ESG integration as a tailored process that can be applied to all asset classes. We do this by analyzing ESG risks and opportunities in our clients' portfolios, engaging with companies in which we invest to discuss material ESG issues, and voting proxies on our clients' behalf to support decisions that we believe will maximize the long-term value of securities. Wellington Management's culture is built to support collaboration and our open-architecture "community of investors" naturally lends itself to the integration of ESG considerations. During 2017, the ESG team hired an experienced analyst from Wellington's municipal credit analysis team, which has greatly increased the team's focus on fixed income and securitized assets specifically. 

Each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within our proxy voting and company engagement efforts.

11.3. 補足情報 [任意]


FI 12. Integration - ESG information in investment processes

12.1. ESG情報が、通常、投資プロセスの一部としてどのように使用されるのか記載してください。

当てはまるものをすべて選択してください
SSA
社債(金融)
社債(非金融)
証券化商品​
ESG分析をファンダメンタル分析に組み込んでいる
ESG分析を証券ウェイト判断に組み込んでいる
ESG分析をポートフォリオ構築判断に組み込んでいる
ESG分析は組織内の信用格付けまたは評価の標準要素になっている
発行体のESG分析が、投資委員会の標準議題になっている
組織内の調査レポートまたは同様文書で定期的にESG分析が取り上げられる
ESG分析は、進行中のポートフォリオ監視の標準項目に入っている
ESG分析は、すべての組織内の発行体概要または同様文書に含まれる
その他(具体的に記載してください)

12.2. 補足情報 [任意]

As mentioned previously, Wellington Management sub-advises the Domini Impact Bond Fund, a domestic, intermediate term fixed income fund, with a focus on community economic development. The objective is to create a fixed income vehicle aligned with the goals of seeking universal human dignity and environmental sustainability, while also achieving competitive financial returns. To that end, potential investments are screened by Domini for approval based on Domini's own ESG criteria. While potential investments may be screened out due to negative factors, Wellington and Domini together seek to proactively invest in issuers that are having a positive impact on society. Domini contributes their ESG research, shareholder engagement, and responsible investing values to the approaches, while Wellington also focuses on the financial research, trading, portfolio construction, and risk management processes.

In addition, Wellington has several additional integrated fixed income strategies under development:

  • AB-SEAS (Advanced Beta- Sustainable Environmental and Social Credit) emphasizes investment in companies that are industry leaders in their commitment to environmental and social sustainability, as measured by the company's environmental and social sustainability ratings based on Wellington's proprietary quantitative assessment.
  • ESG Enhanced Global Corporate Bond seeks to generate returns in excess of the global corporate credit market by investing in a portfolio oriented toward companies that act responsibly with respect to environmental and social sustainability.  It is a diversified, active credit strategy that systematically incorporates ESG scores into the security selection process.


FI 13. Integration - E,S and G issues reviewed

13.1. 組織の統合プロセスでESG問題をどのように検討するか示してください。

E(環境)
S(社会)
G(ガバナンス)
SSA

E(環境)

S(社会)

G(ガバナンス)

社債(金融)

E(環境)

S(社会)

G(ガバナンス)

社債(非金融)

E(環境)

S(社会)

G(ガバナンス)

証券化商品

E(環境)

S(社会)

G(ガバナンス)

13.2. 組織の統合プロセスでE/S/G要因を検討する方法を詳しく説明してください。

SSA

For government bond portfolios, we have resources available to help investors assess the ESG risks or opportunities that would impact the long-term economic growth and sustainable development of the respective countries. For example, ESG issues relative to sovereign bonds can include political stability, corruption, social inequality, investment in education, and climate change management. 

In addition, portfolio managers may develop their own custom approach to ESG integration. For example, we employ a proprietary country scoring model in our Emerging Markets Debt approach that enables us to quantify the sovereign credit outlook for the 60 emerging market countries that we cover and rank them according to their credit strength from high to low. The primary aim of the model is to provide greater rigor to our country research and to highlight potential vulnerabilities in individual countries. The resulting score for each country is adjusted to reflect important qualitative factors such as political stability, which then facilitates cross-country comparisons. The country scoring model is one element of the research process, and as such the Portfolio Manager does not have to override the output of the model.

The scoring process begins with a top-down quantitative assessment of macroeconomic and debt sustainability conditions using a proprietary model that assigns a numerical score to each emerging markets country. The specific inputs and their weights in the model are proprietary, but they include what we have determined to be the key drivers of credit spreads, such as a country's economic performance and debt burden, the government's fiscal position, and the country's quality of governance. Overall, the model employs 10 factors that we found to be the most valuable in determining the credit strength of individual countries.

In emerging markets, however, quantitative measures alone cannot tell the whole story. Rather, the quantitative component of the analysis ensures that every country is reviewed with the same disciplined framework. Our team of experienced sovereign analysts then adapts the raw quantitative score to reflect those less quantifiable factors that may have a meaningful impact on credit spreads, such as political risk, central bank independence, and structural reform progress. Usually, the quantitative and fundamental credit scores are similar, however, in some cases; the politics are such that the final score is meaningfully different than the raw credit score, reflecting a greater credit risk than the numbers alone might imply.

The core of the country scoring model has remained consistent since the inception of our emerging markets debt approach in 1999. We do recalibrate the model every few years, however, in order to refine the specific factors and improve the effectiveness of the model.

社債(金融)

We provide central ESG integration resources to portfolio teams firm-wide, and we approach ESG integration as a tailored process that can be applied to all asset classes. We do this by analyzing ESG risks and opportunities in our clients' portfolios and engaging with companies in which we invest to discuss material ESG issues. Wellington Management's culture is built to support collaboration and our open-architecture "community of investors" naturally lends itself to the integration of ESG considerations. 

Our ESG Research team, part of the central Investment Research function, helps our portfolio managers and analysts gather deeper intelligence on ESG topics and integrate these considerations into the investment process. We believe that a holistic understanding of how companies deploy capital - financial, physical, and human - is helpful in framing an investment thesis, and examining ESG issues gives us a more complete picture. Our ESG analysts are responsible for conducting in-depth analysis of the ESG factors most relevant to the sectors within their coverage area. They are also responsible for coordinating the ESG engagement strategies for the companies in their sectors with equity and fixed income analysts and portfolio managers. Our ESG team works closely with investment teams to incorporate our research into the investment process - regularly conducting in-depth portfolio reviews with investment teams to discuss holdings with the greatest ESG risks and strengths.

Each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within company engagement efforts.

社債(非金融)

We provide central ESG integration resources to portfolio teams firm-wide, and we approach ESG integration as a tailored process that can be applied to all asset classes. We do this by analyzing ESG risks and opportunities in our clients' portfolios and engaging with companies in which we invest to discuss material ESG issues. Wellington Management's culture is built to support collaboration and our open-architecture "community of investors" naturally lends itself to the integration of ESG considerations. 

Our ESG Research team, part of the central Investment Research function, helps our portfolio managers and analysts gather deeper intelligence on ESG topics and integrate these considerations into the investment process. We believe that a holistic understanding of how companies deploy capital - financial, physical, and human - is helpful in framing an investment thesis, and examining ESG issues gives us a more complete picture. Our ESG analysts are responsible for conducting in-depth analysis of the ESG factors most relevant to the sectors within their coverage area. They are also responsible for coordinating the ESG engagement strategies for the companies in their sectors with equity and fixed income analysts and portfolio managers. Our ESG team works closely with investment teams to incorporate our research into the investment process - regularly conducting in-depth portfolio reviews with investment teams to discuss holdings with the greatest ESG risks and strengths.

Each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within company engagement efforts.
 

証券化商品

We provide central ESG integration resources to portfolio teams firm-wide, and we approach ESG integration as a tailored process that can be applied to all asset classes. We do this by analyzing ESG risks and opportunities in our clients' portfolios and engaging with companies in which we invest to discuss material ESG issues. Wellington Management's culture is built to support collaboration and our open-architecture "community of investors" naturally lends itself to the integration of ESG considerations. During 2017, the ESG team hired an experienced analyst from Wellington's municipal credit analysis team, which has greatly increased the team's focus on fixed income and securitized assets specifically.  

Each of our portfolio managers develops their own investment approach whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns. This can manifest itself within the investment thesis or portfolio weighting for a particular security, as well as within engagement efforts.

13.3. 補足情報 [任意]


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