This report shows public data only. Is this your organisation? If so, login here to view your full report.

QBE Insurance Group Limited

PRI reporting framework 2019

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

(C) Implementation: Integration

FI 10. Integration overview

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

The key principles guiding Credit selection encompasses developed market corporate, financial and structured debt. Each corporate entity under consideration is subject to an ESG Assessment, including independent external ESG ratings and the Portfolio Manager assessment.

Adverse ESG findings will automatically reduce the issuer rating and a further review is completed considering materiality of factors and based on the internal assessment of the Portfolio Manager.

Issuers that have been flagged with an ESG rating below a defined rating threshold are then put on a more frequent ESG review cycle.

In addition to this assessment process publicly sourced Controversies research is used to identify any market sensitive ESG developments which could affect credit outlook for entities.

Materially negative developments may result in the entity being included in the final monitoring and watch list process.

All entities are screened subject to QBE Global Sanctions Policy, and the Group Investments Sanctions Policy.

Monitoring - All issuers are subject to ongoing monitoring by Portfolio Managers with a focus on credit rating, news flow or changes in financial outlook of the company, including daily monitoring. ESG considerations complement these practices, including issuers where there is increased potential for risk including emerging controversies.

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

Corporate (financial)

Our integration process is the same for Corporate (financial) and Corporate (non-financial) and Supranationals.

Corporate (non-financial)

Our integration process is the same for Corporate (financial) and Corporate (non-financial) and Supranationals.

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 selecting and assessing the credit worthiness of corporate borrowers, the sustainability of the business is a key consideration. Strong governance that includes effective management of ESG factors increases the likelihood that a company will continue to perform and manage risks effectively.

The selection process considers material factors, based on the internal assessment of the Credit Portfolio Manager.  Investment monitoring considers market sensitive ESG developments which could affect credit outlook for entities, Materially negative developments result in the entity being included in the final monitoring and watch list process.

Companies which perform poorly on ESG factors are down-weighted within the existing investment analysis framework.

Corporate (non-financial)

In selecting and assessing the credit worthiness of corporate borrowers, the sustainability of the business is a key consideration. Strong governance that includes effective management of ESG factors increases the likelihood that a company will continue to perform and manage risks effectively.

The selection process considers material factors, based on the internal assessment of the Credit Portfolio Manager.  Investment monitoring considers market sensitive ESG developments which could affect credit outlook for entities, Materially negative developments result in the entity being included in the final monitoring and watch list process.

Companies which perform poorly on ESG factors are down-weighted within the existing investment analysis framework.

12.3. Additional information.[OPTIONAL]


Top