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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:

82 %
11 %
7 %

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

Our approach to thematic fixed income investing is through our active allocation to "Use of Proceeds" holdings (Green, Climate, Social or Sustainable Bonds). Our Sustainable Fixed income strategy actively seeks investments in securities that, in addition to meeting our financial risk and return requirements, also generate positive societal and/or environmental impact (and where possible contribute towards the advancement of the UN Sustainable Development Goals agenda) by actively investing in Green, Climate, Social or Sustainable Bonds.  

These holdings go through a two-step process where we assess the sustainability of the issuer and the security. Both steps need to be cleared for a security to be deemed investable:

  • The security is deemed investable if it is certified Green, Climate, Social or Sustainable based on an approved industry standard (e.g. Climate Bond Initiative or International Capital Markets Association Green Bond Principles).
  • The issuer-based sustainability criteria is the same as that applied in our Best in Class process. 

Increasingly we are seeking to understand and measure the social and environmental impacts of our investments. We have begun to map our ESG Thematic or "Use of Proceeds" (Social, Sustainable, Green and Climate Bonds) holdings to the Sustainable Development Goals (SDGs) framework in order to better understand the impact of these investments and the opportunities for scale. Part of the driving force behind our decision to actively overweight this asset class in the fixed income strategy is to support the SDGs, examples of which include: affordable and clean energy, sustainable cities and communities, and responsible consumption and production. We also hold opportunistic positions within our mainstream funds. We will continue to explore other ways to use the SDGs to think about and measure our impact. We have found this has been an equally important objective for many of our clients as well.

In addition, for reporting purposes, we also disclose to our clients the SDGs with which these holdings align so they can better understand the targeted environmental and social outcomes underlying these investments. Themes that we typically invest in span renewable energy, energy efficiency, climate change, sustainable buildings and land use, improved health and community wellbeing. 

 

 

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..

          Certification according to CBI or IMCA Principles
        

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

Following a breach in issuer obligations we will sell down the holding unless the issuer can rectify immediately and provide credible evidence of why it will not occur again.

08.3. Additional information. [Optional]


FI 09. Thematic investing - assessing impact

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

          At this point we do not conduct additional due diligence other than ensuring issuer certification protocol adherence (assurance of CBI and IMCA Green Bond Principles)
        

09.2. Additional information. [Optional]

We are in the process of developing a framework for assessing and reporting on the impact (environmental and social) of these investments. This is a collaboration between internal and external resources. We are working closely with a number of industry impact investing experts on both the methodology and the data verification and storage elements behind this framework.


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