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GEROA PENTSIOAK E.P.S.V. de EMPLEO

PRI reporting framework 2019

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

We have established our Socially Responsible Policies for each type of asset, according to the international guidelines of the United Nations Global Compact principles and the principles for responsible investment (PRI) which are complementary to the fundamental analysis of companies, and through which we are committed to create an investor universe through strict environmental, social and governance standards for each type of asset

Our commitments are the followings:

-We will  integrate environmental, social and good governance issues into decision-making processes and asset management practices.

-Risk managerment: We will monitor financial and extrafinancial risks.

-Active Shareholders: we will exercise our right to vote in companies in which we hold over a certain level of stake.

-Awareness: We will raise awareness of the importance of socially responsible investment to adapt the investment management sector to requirements of promoting corporate responsibility, sustainability, financing real economy, long-term return and transparency.

-Create an industrial network in Gipuzkoa and the Basque Country.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

OUR COMMITMENT TO SOCIALLY RESPONSIBLE INVESTMENT

-We INTEGRATE ENVIRONMENTAL, SOCIAL AND GOOD GOVERNANCE ISSUES into decision-making processes and asset management practices.

-RISK MANAGEMENT. As well as monitoring the risks inherent to the markets and assets we invest in, we also assess environmental, social-labour and good governance risks, in order to select the companies with a good mid-to-long term profitability/risk ratio, in conjugation with our entity's social responsibility values.

An analysis is carried out to verify that the companies in which we invest are not involved in any controversy or incident regarding environmental, social and / or governance issues. We will ensure that there is no breach of the principles of the United Nations Global Compact.

-ACTIVE SHAREHOLDERS: We exercise our right to vote in companies in which we hold over a certain level of stake on behalf of the interests of our members and working toward long-term sustainability in companies while heeding environmental, social and good governance criteria.

-AWARENESS: We recognize the importance of socially responsible investment to adapt the investment management sector to requirements of promoting corporate responsibility, sustainability, financing real economy, long-term return and transparency.
SRI is a tool to promote responsible policies in entities we invested in. It takes the interests of all interested parties into account (workers, consumers, civil society, etc), long-term sustainability for companies and the measures implemented for efficient use of natural resources and environmental protection. 

SRI balances financial and extra-financial (environmental, social and good governance) criteria to obtain financial profitability for our members, as well as a positive impact on society and the environment.  Socially responsible investment must not be confused with solidarity-oriented or not-for-profit investments.

-CREATE AN INDUSTRIAL NETWORK IN BOTH GIPUZKOA AND BASQUE COUNTRY.  We believe that it is our responsibility as institutional investors to contribute to the development of our economy by investing in local companies. In addition to investment in listed securities of companies close to us, we have different lines of action with this purpose:

1) We support members of our entity with entrepreneurial projects.
2) We invest in recently-created or local start-up companies.
3) We invest in local private equity through ORZA, AIE. 

OUR SOCIALLY RESPONSIBLE INVESTMENT POLICY

Geroa Pentsioak has established SRI policies for each kind of asset. Minimum ESG aspects are established for all of the sub-groups and different screening strategies are used for each of them:

1) Fixed income bonds on public debt and governmental bodies:

  • Exclusion by country: A minimum of 95% of public debt and government body securities must be issued in countries with a higher score than 70, according to Bloomberg’s “ESG Country Risk” ranking.

2) Corporate fixed income, convertible bonds and equity: exclusion by country according to the United Nations' HDI, norm-based exclusion (Sustainalytics’ controversies research and Global Compact service) and rankings by Sustainalytics and RobecoSAM to assess and rank the company according to comparable companies.

  • Exclusion by country: A minimum of 95% of public debt and government body securities must be in countries with a higher score than 70, according to Bloomberg’s “ESG Country Risk” ranking.
  • Exclusion by activity or product: no security is excluded by activity or product.
  • Norm-Based exclusion. An analysis of controversies on a quarterly basis is performed and it is ensured that none of the companies breaches any of the UN Global Compact principles. If an entity is involved in a serious controversy (level 4 or 5 according to the research conducted by the consulting firm Sustainalytics) or if a company breaches any of the UN Global Compact’s principles, automatically that security will be subjected to an observation period:
    • The investment team along with the management will decide if the security is to be considered "not suitable" to remain in the portfolio. If the security is declared unfit, it´s exposure will be disposed of as soon as possible.
    • The exposure of the security will not be increased until the investment team and the management considers that the controversy is properly clarified and corrected. 
    • The investment department along with the management may invest in a security that was previously excluded or considered unfit when the company takes steps to overcome negative filters. 
  • Ranking analysis: Geroa Pentsioak uses the ESG rankings published by Sustainalytics and RobecoSAM to assess and rank the company according to comparable companies. The criterion of the company's position is not exclusionary.
    • At least 50% investment in fixed Income-corporate, convertible bonds and equity should be located within companies that have higher score than 70 on the mentioned rankings .

3) Funds (Equity, Fixed Income, Hedge Funds, Thematic...), ETF and investments through Private Equity companies:

  • Analysis of SRI policies used by management entities and subscriptions to different initiatives (UNPRI, UN Global Compact, GRI, etc.).
    • A minimum of 75% of the investments shall be made through entities who have implemented ESG policies in their investment processes.
    • A minimum of 75% of the investments shall be made through entities who are UNPRI signatories.
  • Norm-Based exclusion. Should any relevant occurrence or inappropriate behaviour by the management company come to the notice of the managing body at Geroa Pentsioak, it will automatically enter into a period of observation.

    The investment team along with the management will decide if the Management Company is to be considered "unsuitable" to remain in the portfolio. If it is declared unfit, the positions will be disposed of as soon as possible.

    The management company positions will not be increased until the investment team and the management considers that the controversy has been duly clarified or steps to overcome negative filters have been taken. 

4) Deposits, current accounts, savings accounts, fixed-term deposits, currency and similar: Analysis of financial entities through ESG rankings by Sustainalytics and RobecoSAM.

  • At least 75% must have an ESG rating by Sustainalytics or RobecoSAM.

5) Structured products and derivatives: Analysis of issuing financial entities through ESG rankings by Sustainalytics and RobecoSAM.

  • At least 75% must have an ESG rating by Sustainalytics or RobecoSAM.

 

01.6. Additional information [Optional].

          
        
I confirm I have read and understood the Accountability tab for SG 01 I confirm I have read and understood the Accountability tab for SG 01

SG 01 CC. Climate risk (Not Applicable)


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

We annualy disclose publicly the following documents in our website:

1) Geroa Pentsioak's commitments.

It includes: overall approach regarding to SRI, Geroa´s principles, Geroa’s definition of ESG and/or responsible investment and it’s relation to investments, ESG incorporation approaches, Active ownership approaches, reporting frecuency.

2) Geroa Pentsioak's SRI policy (clients/beneficiaries only); It includes in addition to "Geroa Pentsioak EPSV' commitments, the Asset class-specific RI guidelines.

3) Geroa Pentsioak's annual results and actions in SRI.

4) PRI transparent Report.

5) Geroa Pentsioak's annual report.


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

In 2018, the Good Governance manual was approved. This document compiles the principles, measures, policies, mechanisms and procedures that, complementing the current regulations, govern the corporate governance of the Entity. The aim is to contribute to the establishment of a Government System that guarantees a healthy and prudent management of the activity. The final objective of this Manual is to provide confidence, for all those who have an interest in Geroa Pentsioak, as well as to guarantee transparency, clarity, autonomy in the management of the organization and our vocation for social responsibility, while respecting, the objectives of efficiency and profitability towards which it must adhere in the development of our corporate purpose. 

This manual contains a policy on managing potential conflict of interest in the different areas of the entity, and consequently in the investment process. This manual is mandatory. All employees and the members of the Entity´s Government Bodies know and accept it entirely.  It includes the definition of what a Conflict of interest is and protocols to help identify, assess, monitor, and mitigate conflicts.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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