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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 » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

01.1. Indicate 1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and 2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.

SSA
0 Screening alone
0 Thematic alone
78 Integration alone
22 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
84 Integration alone
16 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
84 Integration alone
16 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
83 Integration alone
17 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

Each of our portfolio managers and investment teams 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.

01.3. Additional information [Optional].

At Wellington Management, fixed income portfolios are managed by independent portfolio management teams, including dedicated teams specializing in various sectors of the market. Our firm does not have a central investment committee. Each of the investment styles offered by Wellington Management is managed by an individual Portfolio Manager or team of managers, by a group of research analysts, or by a combination of these structures. Each portfolio management team has broad investment discretion within the pre-defined parameters of its investment approach and each has access to the full research resources of the firm.


While the investment process and philosophy may differ by fixed income approach, portfolio management teams generally use a fundamental investment process with quantitative rigor. Certain parts of the process may have a quantitative element to help identify market signals, which might inform fundamentally-driven processes for making buy and sell decisions.


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

Our ESG Research Team uses data from a number of different sources in order to evaluate companies’ level of disclosure and reporting on ESG indicators. As inputs to our approach, we use ESG research from Morgan Stanley, Credit Suisse, CLSA, Goldman Sachs Sustain, UBS, Bank of America Merrill Lynch, Société Générale, MSCI, Bloomberg, Oekom, ISS, Glass Lewis, Equilar, and FactSet amongst others. Data from select sources feeds a proprietary algorithm that we have developed in order to provide internal ESG ratings on about 7,000 companies. We are continually evaluating new data providers to improve the coverage and quality of inputs into our ESG analysis. These ratings and external research providers serve as a starting point for further research and engagement by the ESG Research team.

For our 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, social inequality, investment in education, and climate change management.

02.4. Additional information. [Optional]


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]


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