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AP3

PRI reporting framework 2019

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You are in Indirect – Manager Selection, Appointment and Monitoring » Appointment

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

specify

The addressing and integration of material ESG issues  is fundamental. We  have to be aware that fulfilling that requirement can and will look different. Some mamagers havs always done it without specific ESG language and terminology. Others have all the policies and the  language but implementation is weak. The capacity of the manager to do what they say they do is  increasingly imprtant as integration requires resources. This applies to all managers in all asset classes.

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

ESG Objectives

          The managers strategy should include ESG.
        
          For segregated mandates the possibility to exclude companies from the investment universe. The index used are customized to make possible the exclusion/non investment decisions.
        
          AP3 expects the manager to integrate ESG/Sustainability in all asset management processes (analysis, investment decision, monitoring, reporting etc.).
        
          part of integration
        
          Membership in UNPRI and other organisations. Studies and publications done by the manager or the manager organisation. We ask our manager to share with us for discussions and knowledge building.
        
          We follow the managers developlement with regard to sustainability and to what extent the manager is aligned with the development in AP3. The development or lack of development is also brought up in discussions with the manager. As many of the external mandates are fund investments we have limited ability to require change but we will make our opinon known.
        

Incentives and controls

Reporting requirements

Benchmark

          Cash,ROI, IRR
        

ESG Objectives

          The managers strategy should include ESG.
        
          Decided exposure restrictions as applicable.
        
          AP3 expects the manager/GP to address/integrate ESG issues that are relevant and material. Monitoring and reporting should include ESG issues and development.
        
          part of integration
        
          Memerbership in UNPRI and other organisations. Studies and publications done by the manager or the manager organisation.
        
          We follow the managers developlement with regard to sustainability and to what extent the manager is aligned with the development in AP3. The development or lack of development is also brought up in discussions with the manager. As many of the external mandates are fund investments we have limited ability to require change but we will make our opinon known.
        

Incentives and controls

Reporting requirements

Benchmark

          cash, ROI, IRR, GRESB
        

ESG Objectives

          The managers strategy should include ESG. Energy efficiency, energy sources, building materials, water, waste management etc.
Certification
        
          AP3 expects the manager to address/integrate  all ESG issues that are relevant and material.
        
          part of integration
        
          Certification LEED, BREAM etc. Studies and publications done by the manager or the manager organisation.
        
          We follow the managers developlement with regard to sustainability and to what extent the manager is aligned with the development in AP3. The development or lack of development is also brought up in discussions with the manager. As many of the external mandates are fund investments we have limited ability to require change but we will make our opinon known.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

          Contact and discuss with the manager what the reasons for the non achievement are, what has been done for improvment etc. It is important to understand what and why  and how the manager plans to change and improve.
        

04.4. Provide additional information relevant to your organisation's appointment processes of external managers. [OPTIONAL]

          AP3 uses customized bench marks that are reviewed and rebalanced 4 times a year. Each time the rebalancing is proceeded by screening and analysis carried out by AP3 Sustainability team. In addition  there are companies excluded  by decision of the Board  (due to breaches of conventions etc). Non investment decisons due to sustainability issues that are assumed to have a possible negative financial impact or be negative from a reputational aspect.
AP3 manages its own voting and engagement processes.
        

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