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LBPAM La Banque Postale Asset Management

PRI reporting framework 2019

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

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
1.5 Screening alone
0 Thematic alone
0 Integration alone
74 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
24.5 No incorporation strategies applied
100%
Corporate (financial)
1.5 Screening alone
0 Thematic alone
0 Integration alone
74 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
24.5 No incorporation strategies applied
100%
Corporate (non-financial)
1.5 Screening alone
0 Thematic alone
0 Integration alone
74 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
024.5 No incorporation strategies applied
100%
Securitised
1.5 Screening alone
0 Thematic alone
0 Integration alone
74 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
24.5 No incorporation strategies applied
100%

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

LBPAM applies an screening approach to all its RI Fixed Income strategies. We have differentiated the way we apply screening strategies within our institutional mandates and within our pooled funds.

Within our Fixed Income mandates we exclude companies having a high-risk profile as well as companies exposed to climate change risks (mining and utilities) depending on clients' approach. We also monitor companies with laggard scores (scores between 8 and 10) and use a comply or explain approach with investment managers of the“investment insurance mandate” team .

Within our pooled funds we select issuers with the best practices in their industry regarding ESG issues according to our proprietary framework GREaT. The companies with scores between 1 and 5 are selected for our RI Fixed Income Funds. Since 2016, we have decided to go beyond a Best in class approach by introducing sector biais in our quantitative ESG approach. For example, we have enlarged the number of eligible companies when they face more ESG opportunities than ESG risks. On the contrary, we have reduced the number of companies facing high-risk in our investment universes.

01.3. Additional information [Optional].

For  private our  debt investment actvities, we have developed a dedicated ESG questionnaire to each team (Infrastructure, Real estate and Corporate) based on our GREaT approach. The assessment is roll-out in every due-diligence pre-approval and is used as an input in the investment decision process.


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.

Raw ESG data is used as the primary source of our quantitative ESG rating system so-called AGIR. This data is then aggregated according to out GREaT approach for generating scores for 4.800 issues. We use scores from 2 rating agencies. We also use raw data for feeding into our Energy Transition Reporting tool (co2 emissions, revenues generated from coal activities) and to identify controversial activities.

In our rating tool, RI analysts can adjust ratings after meeting with companies, or controversies (regulatory changes, incidents, statements from executives, surveys conducted by NGOs or trade unions, etc.) leading to upgrades or downgrades. The objective is to increase responsiveness in our rating system.

Company related ESG analysis is performed by the RI Team using inputs from different sources. In the end, we create investment cases combining financial information and ESG related issues such as Energy Transition and Development of Local Territories.

ESG factor specific analysis is provided for green bonds with and assessment of the alignement between green bonds’ objectives and issuer's climat/environmental strategy.

Sector related ratings are generated by our rating tool AGIR.

ESG country information is primarily sourced by specialised rating providers which is assessed by the RI Team

02.4. Additional information. [Optional]

For the private debt team, raw data is collected directly by the Investment teams and the RI specialist in order to fill into our RI questionnaire. These data mainly come from the issuers, the banks that structure the deals, technical advisors, sell side analysts and our in-house research.


FI 03. Processes to ensure analysis is robust

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

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

03.3. Additional information. [Optional]

ESG rating methodology relies on several external sources, in order to strengthen the quality of the analysis.

External sources are generally chosen by the RI team after having benchmarked different providers. Depth, granularity and responsiveness are important criteria to select external ESG providers.

ESG ratings are reviewed on a quarterly basis - through AGIR, our quantitative rating tool - to ensure that ESG data is updated and accurate.

The internal audit department controls on an annual basis the engagements, investment procedures and rating process of the RI Team.

All our RI credit and treasury strategies have obtained the French SRI label.

ESG ratings and comments generated by the RI Team are diffused through front office tools to all audiences including Fixed Income portfolio managers. Quarterly meetings are organised with RI fixed income fund managers to explain changes and evolutions in our rating system.


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