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BB DTVM

PRI reporting framework 2019

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income

ESG incorporation in actively managed fixed income

Implementation processes

FI 01. Incorporation strategies applied

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.
Corporate (financial)
0 Screening alone
0 Thematic alone
0 Integration alone
100 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
0 Integration alone
100 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.

BB DTVM adopts a modern methodology in its analyzes based on a positive / best-in-class filter.
In addition, we engage with debt issuers, conducting awareness-raising and encouraging companies to improve the quality and quantity of publicly available ESG information on their corporate sites. Investors are aware that such information is evaluated and will influence the final outcome of the credit analysis.
We use the combination of strategies because we believe that when penalizing the issuer in the offer of credit for lack of compliance with the ESG criteria we contend for an enforcement of the company's financial sustainability.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


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]


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

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

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

BB DTVM adopts ESG methodology in its analyzes based on the use of the filter positive/ negative / best-in-class.
The methodology for incorporating ESG aspects into credit and stock analyzes is divided into two main groups: general indicators and specific indicators.
The general indicators were segmented into four distinct pillars, encompassing issues related to governance structure, social and environmental aspects and the company's positioning in relation to sustainability indexes, as well as its alignment with the GRI standard involving the analysis of themes such as natural resources, biodiversity, solid waste treatment, liquid effluents, atmospheric emissions, labor rights, human rights, among others.
The methodology consists of a qualitative evaluation through a questionnaire based on the general and specific factors described in the previous items. From the obtained score an ESG rating is established to the companies analyzed. The result of the score, the assigned rating and the main aspects observed in the ESG analysis are recorded in the investment risk analysis summary. Those poorly rated companies are penalized and their credit supply has declined.

04.3. Additional information. [Optional]

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FI 05. Examples of ESG factors in screening process (Not Completed)


FI 06. Screening - ensuring criteria are met

06.1. 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?
Positive/best-in-class screening
Norms-based screening

06.2. Additional information. [Optional]


(C) Implementation: Integration

FI 10. Integration overview

10.1. Describe your approach to integrating ESG into traditional financial analysis.

We engage with debt issuers, carry out awareness-raising actions, and encourage companies to improve the quality and quantity of ASG information publicly available on their corporate websites. Investors are aware that this information is evaluated and will influence the final outcome of the credit analysis.


We penalize issuers that do not meet the ESG criteria, in addition to the company's traditional financial analysis  the ASG issues have an impact on the credit offer.
 

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

Corporate (financial)

We engage with debt issuers, carry out awareness-raising actions, and encourage companies to improve the quality and quantity of ASG information publicly available on their corporate websites. Investors are aware that this information is evaluated and will influence the final outcome of the credit analysis.


We penalize issuers that do not meet the ASG criteria, in addition to the company's traditional financial analysis  the ASG issues have an impact on the credit offer.

Corporate (non-financial)

We use the same criteria for all.

10.3. Additional information [OPTIONAL]


FI 11. Integration - ESG information in investment processes

11.1. 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 used to adjust the internal credit assessments of issuers.
ESG analysis is used to adjust forecasted financials and future cash flow estimates.
ESG analysis impacts the ranking of an issuer relative to a chosen peer group.
An issuer's ESG bond spreads and its relative value versus its sector peers are analysed to find out if all risks are priced in.
The impact of ESG analysis on bonds of an issuer with different durations/maturities are analysed.
Sensitivity analysis and scenario analysis are applied to valuation models to compare the difference between base-case and ESG-integrated security valuation.
ESG analysis is integrated into portfolio weighting decisions.
Companies, sectors, countries and currency and monitored for changes in ESG exposure and for breaches of risk limits.
The ESG profile of portfolios is examined for securities with high ESG risks and assessed relative to the ESG profile of a benchmark.
Other, specify

11.2. Additional information [OPTIONAL]


FI 12. Integration - E,S and G issues reviewed

12.1. 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

12.2. Please provide more detail on how you review E, S and/or G factors in your integration process.

Corporate (financial)

In our process, we review ESG factors annually. However, we also review when of events that may impact the classification of the company.

Corporate (non-financial)

In our process, we review ESG factors annually. However, we also review when of events that may impact the classification of the company.

12.3. Additional information.[OPTIONAL]


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