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Macquarie Asset Management

PRI reporting framework 2019

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Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
SSA
0 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

We have a structure under which autonomous - or independent -- investment teams are supported by a global shared-services platform. Our teams have the autonomy to leverage their specialized skill sets and define their individual investment approaches and decision-making processes, whilst benefitting from a comprehensive operational support platform. The incorporation of ESG factors in the investment process varies by investment team as each team owns its own investment process.

Whereas we utilize integration methods and screening throughout the investment process, integration methods are our primary strategy of conducting analysis.

01.3. Additional information [Optional].

The data provided in this survey represents a compilation of responses that were separately submitted by our independent investment teams.  We have utilized the additional information sections in questions where our teams’ responses are materially different from one another and/or if we felt the need to identify specific practices employed by an individual team.

Macquarie Asset Management (MAM) has a breadth of fixed income capabilities.  A central belief amongst all of our capabilities is a commitment to proprietary, in-depth fundamental research. Inherent in this commitment is a strong focus on the management of the downside, considering capital preservation to be paramount.  Aspects of our credit analysis may include an examination of industry dynamics, visits with company management, competitive positioning comparisons, and an analysis of both overall credit and ESG specific ratings trends.  Inherent to the investment process is an in-depth analysis of economic, competitive and other factors that may influence future revenues and earnings of the issuer, including factors that are considered as material from an ESG perspective.   


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

The responses provided above represent an aggregate of different practices employed by our independent investment teams and do not necessarily indicate that each team employs all of these practices.

The majority of the ESG information that we use is obtained as part of our internal  research process where we gather information on all factors that are relevant to our credit analysis. 

We provide all of our investment teams with access to specialized ESG research. The investment teams determine how best to leverage this information in their investment process.

See below for additional information regarding some of our respective teams.

02.4. Additional information. [Optional]

The Macquarie Investment Management (MIM) Fixed Income research team has added ratings data from our external provider to their weekly data pack and analysts are required to delve into instances where a particular company’s ESG rating has experienced a recent upgrade or downgrade.

Macquarie Infrastructure Debt Investment Solutions (MIDIS), in addition to utilizing external research providers, also utilizes specialised in-house ESG research capabilities.  ESG factors initially assessed by their Investment Committee are (in part) inspired by a series of questions based on the International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability as well as IFC Corporate Governance Progression Matrix.


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

specify description

          Review and evaluation of external research providers
        

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]

The process of ensuring that ESG research is robust and the sharing of ESG information and analysis varies among our investment teams.  The responses provided above represent an aggregate of different practices employed by our independent investment teams and do not necessarily indicate that each team employs all of these practices.

MIM’s FI research team has added ratings data from our external provider to their weekly data pack and analysts are required to delve into instances where a particular company’s ESG rating has experienced a recent upgrade or downgrade.  ESG information is also available through the Bloomberg research terminals and can also be accessed via MSCI’s ESG Manager web site.  

MIDIS engages directly with borrowers and consultants on a wide range of issues. This includes ESG, which is a standing item in the Screening Papers and Approval Papers submitted to their Investment Committee. The ESG approach is documented and the ongoing learning culture of MIDIS ensures that information is cascaded to all staff through formal and informal learning sessions.

The review and evaluation of our external research providers is done on a firm level as those resources are shared by all of the investment teams within MIM. 


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