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UBS Asset Management

PRI reporting framework 2019

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Asset class implementation not reported in other modules

SG 16. ESG issues for internally managed assets not reported in framework

Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Money market instruments

Specifically with regard to money market portfolios, our credit research analysts assess governance factors as part of their qualitative assessments. Going forward, we will be looking to formalise this process to also integrate environmental and social aspects of an issuer.

Our credit research analysts assess governance factors as part of their qualitative assessments. Going forward, we will be looking to formalise this process to also integrate environmental and social aspects of an issuer.

We have a deep, seasoned credit research team made up of career analysts, most of which have direct industry experience in the industries that they cover. The full-time career analysts specialize in their sectors and build up valuable, in-depth knowledge over time. Their unique experience allows them to assess certain governance related risks as an overall part of the analysis. In addition, we are in the process of formalising this process to also integrate environmental and social aspects of a company. 

Other (1) [as defined in Organisational Overview module]

Our equity, fixed income, real estate, infrastructure and private equity investment capabilities can be combined into customised multi-asset solutions. In this case, they incorporate the ESG processes of the underlying asset classes as described in each of the specific PRI modules.

16.2. Additional information [Optional].


SG 17. ESG issues for externally managed assets not reported in framework

17.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Private equity

ESG is an important part of our overall due diligence process and information on the target funds' ESG policies are collected as part of the due diligence questionnaire the target fund managers complete.

In addition to reviewing a fund's ESG policies, we will also consider how it incorporates these policies into the fund strategy, how it reports its ESG strategy to its investors, what relevant laws and regulations impact the fund, and any sustainability initiatives the fund is already participating in. This information is then incorporated into the investment decision making process.

Property

ESG is an important part of our overall due diligence process and information on the target funds' ESG policies are collected as part of the due diligence questionnaire the target fund managers complete.

In addition to reviewing a fund's ESG policies, we will also consider how it incorporates these policies into the fund strategy, how it reports its ESG strategy to its investors, what relevant laws and regulations impact the fund, and any sustainability initiatives the fund is already participating in. This information is then incorporated into the investment decision making process.

We ensure ESG forms part of our due diligence process because we recognize the value of proactive and positive ESG policies. The benefits of these may include: limiting the risk of regulatory non-compliance, maintaining properties' competitive position in the market, increasing the appeal of a property to tenants and purchasers, and in some cases, reducing expenses and improving returns.

Among the underlying funds, the majority have implemented ESG policies, are signatories to the UN's Principles for Responsible Investment and participate in the GRESB survey.

Infrastructure

We thoroughly consider how a manager incorporates ESG policies into firm and fund strategy, how it reports on ESG topics and issues to investors, on the relevant laws and regulations impacting its fund, any sustainability initiatives embraced by the manager, etc. This information is then incorporated into the investment decision-making process. For example, we will not consider fund managers with investment strategies which include certain sub-sectors that are deemed environmentally unsuitable, or operating business in countries that are not able to demonstrate their commitments to human rights, etc.

17.2. Additional information.


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