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PRI reporting framework 2019

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (C) Implementation: Integration

(C) Implementation: Integration

FI 10. Integration overview

10.1. Describe your approach to integrating ESG into traditional financial analysis.

The incorporation strategies must be realistic and relevant for the mandate/strategy in question.

The relevant and material ESG  issues with regard to the company, sector, geographical market, and the mandate/strategy the PM has must be seen in a context and analyzed.  The gathering of data and information will most likely come from different sources  and the investment decision will depend on the reliability of the data, the PM's insight and knowledge  and also degree of risk aversion and the perception of what is already priced in.

As many ESG factors not have a market price, the PM will have to evaluate the impact a factor might have and over what time horizon.

It is each active managers responsibility to analyze the bonds in the specific portfolio with respect to sustainability risks/opportunities and be prepared to explain the positions. Again the relevance and materiality will differ for different mandates, different strategies and different investment horizons.

Bond portfolio managers also participate in the advisory group on Sustainability where ESG issues are presented and discussed in order to best address the issues.

 The  Fund's managers have an ongoing discussion about questions that are raised; e.g.. governance issues, CO2 emissions, energy efficiency matters, HR etc.

10.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

Corporate (financial)

The basic concept/process  is the same, There will be differences with regard to what issues are material and relevant, the  mandate and strategy.

Corporate (non-financial)

The basic concept/process  is the same, There will be differences with regard to what issues are material and relevant, the  mandate and strategy.

10.3. Additional information [OPTIONAL]


FI 11. Integration - ESG information in investment processes

11.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
Corporate (financial)
Corporate (non-financial)
ESG analysis is integrated into fundamental analysis
ESG analysis is used to adjust the internal credit assessments of issuers.
ESG analysis is used to adjust forecasted financials and future cash flow estimates.
ESG analysis impacts the ranking of an issuer relative to a chosen peer group.
An issuer's ESG bond spreads and its relative value versus its sector peers are analysed to find out if all risks are priced in.
The impact of ESG analysis on bonds of an issuer with different durations/maturities are analysed.
Sensitivity analysis and scenario analysis are applied to valuation models to compare the difference between base-case and ESG-integrated security valuation.
ESG analysis is integrated into portfolio weighting decisions.
Companies, sectors, countries and currency and monitored for changes in ESG exposure and for breaches of risk limits.
The ESG profile of portfolios is examined for securities with high ESG risks and assessed relative to the ESG profile of a benchmark.
Other, specify

11.2. Additional information [OPTIONAL]


FI 12. Integration - E,S and G issues reviewed

12.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

12.2. Please provide more detail on how you review E, S and/or G factors in your integration process.

Corporate (financial)

Relevant and material issues are taken into consideration and analyzed to what extent they may influence the value and return of the asset/investment. The FI managers have the same tools and information about possible sustainability issues as the equity managers. Each manager analyses the risk/return profile of the investment and sustainability is one among several risks to be assessed.

The incorporation strategies must be realistic and relevant for the mandate/strategy in question.

The relevant and material ESG  issues with regard to the company, sector, geographical market, and the mandate/strategy the PM has must be set in a context and analyzed.  The gathering of data and information will most likely come from different sources  and the investment decision will depend on the reliability of the data, the PM's insight and knowledge  and also degree of risk aversion and the perception of what is already priced in.

As many ESG factors not have a market price, the PM will have to evaluate the impact a factor might have and over what time horizon.

It is each active PM's responsibility to analyze the bonds in the specific portfolio with respect to sustainability risks/opportunities and be prepared to explain the positions. Again the relevance and materiality will differ for different mandates, different strategies and different investment horizons.

Bond portfolio managers also participate in the advisory group on Sustainability where ESG issues are presented and discussed in order to best address the issues.

 The  Fund's managers have an ongoing discussion about questions that are raised; e.g... governance issues, CO2 emissions, energy efficiency matters, HR etc.

Corporate (non-financial)

Relevant and material issues are taken into consideration and analyzed to what extent they may influence the value and return of the asset/investment. The FI managers have the same tools and information about possible sustainability issues as the equity managers. Each manager analyses the risk/return profile of the investment and sustainability is one among several risks to be assessed.

The incorporation strategies must be realistic and relevant for the mandate/strategy in question.

The relevant and material ESG  issues with regard to the company, sector, geographical market, and the mandate/strategy the PM has must be set in a context and analyzed.  The gathering of data and information will most likely come from different sources  and the investment decision will depend on the reliability of the data, the PM's insight and knowledge  and also degree of risk aversion and the perception of what is already priced in.

As many ESG factors not have a market price, the PM will have to evaluate the impact a factor might have and over what time horizon.

It is each active PM's responsibility to analyze the bonds in the specific portfolio with respect to sustainability risks/opportunities and be prepared to explain the positions. Again the relevance and materiality will differ for different mandates, different strategies and different investment horizons.

Bond portfolio managers also participate in the advisory group on Sustainability where ESG issues are presented and discussed in order to best address the issues.

 The  Fund's managers have an ongoing discussion about questions that are raised; e.g... governance issues, CO2 emissions, energy efficiency matters, HR etc.

12.3. Additional information.[OPTIONAL]


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