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PRI reporting framework 2019

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(B) Implementation: Thematic

FI 07. Thematic investing - overview

07.1. Indicate what proportion of your thematic investments are:

100 %

07.2. Describe your organisation’s approach to thematic fixed income investing

A combination of environmental and social themes is applied to our actively managed strategies, i.e. climate change, water, and land. ACTIAM identifies companies that contribute negatively and positively to these themes. The negative contributors are excluded from investment in the actively managed fund; the positive contributors receive an upgrade in their ACTIAM ESG score, thereby increasing the likelihood of being selected for investment.

ACTIAM has a specific policy for green, social and sustainable bonds. This policy requires bonds to be issued according to the Green Bond Principles, as well as criteria for the use of proceeds, reporting and the achievability of the projects and targets. The policy includes a blacklist of activities that we do not want to finance through sustainable bonds. Social or environmental impact needs to be measured / there need to be credible indicators, such as CO2 reduction or avoided CO2. ACTIAM wants to prevent the locking in of money in less ambitious projects. As part of our energy transition policy, we use green bonds to stimulate renewable energy and energy efficiency. Bonds that are labelled 'green' by the in-house ESG team receive an ACTIAM ESG score of 75, 85 or 100. The score depends on the level of positive impact and whether the bond meets the ACTIAM future proof business test. See also

07.3. Additional information [OPTIONAL]

FI 08. Thematic investing - themed bond processes

08.1. Indicate whether you encourage transparency and disclosure relating to the issuance of themed bonds as per the Green Bonds Principles, Social Bond Principles, or Sustainability Bond Guidelines..

          We ask issuers to formulate disclosure targets (such as carbon reduction targets) and encourage issuers to issue green bonds. We engage on progress

08.2. Describe the actions you take when issuers do not disburse bond proceeds as described in the offering documents.

There are two different processes. For our thematic overlay (climate change, land, and water), the ESG team researches the issuer and excludes or upgrades bonds issued by that party based on their negative or positive contribution to one of our themes.

For green and social bonds, the bond is analysed primarily at bond and use of proceeds level. However, we also consider whether the issuer makes real efforts, for example, towards an energy transition and more sustainability to avoid green washing. The bond needs to meet the criteria of ACTIAM's green bond policy at the minimum. These criteria go beyond GBP or CBI principles. If this is not the case, the bond will not be registered as a green bond in ACTIAM's system, thereby decreasing the likelihood that this bond will be bought - if the bond is still bought. Plus if it is bought, it will not be registered as a green bond and will not be included in ACTIAM's administration of green bonds. After the Green Bond mark is given, an assessment is done and an ACTIAM ESG score is given. Within the process, there is close corporation between Portfolio Management, Treasury and the ESG team.

08.3. Additional information. [Optional]

Following FI 08.2. 

Often, roadshow of Green Bond issuers are visited by PM and ESG. Discussions on issuers and use of proceeds happen on a regular basis. The final decision of the internal Green Bond mark and the ACTIAM ESG Score is done by the ESG team. 

FI 09. Thematic investing - assessing impact

09.1. Indicate how you assess the environmental or social impact of your thematic investments.

09.2. Additional information. [Optional]

Part of our green and social bond policy is that issuers need to report at least annually. These requirements are different for the other thematic bonds, as they are excluded or upgraded based on the analysis of the issuer, not the bond. We track progress on the (reporting) targets and impact of the projects/activities that are financed.

For our focus themes climate, water and land we have set long term targets. Twice a year we measure the progress on water and climate and we report on this. We have an independent audit conducted on the carbon and water footprint of our FI (and equities) investment funds early 2019 (over 2018 data).