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DNCA Finance

PRI reporting framework 2019

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

(B) Implementation: Thematic

FI 07. Thematic investing - overview

07.1. Indicate what proportion of your thematic investments are:

3 %
1.5 %

Specify

          Traditional corporate bonds from issuers exposed to the sustainable transition
        
34 %

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

We do not invest regularly in Social or Green bonds but we are open to opportunities in this segment. Our SRI Fixed income fund and SRI diversified fund are currently invested in one green bonds and one social bond. We will design a dedicated Green bond and Social bond assessment methodology in 2019.

In addition, all companies in our Fixed Income portfolios have been analysed through our combined Responsibility/Sustainable Transition screen. As such, we monitor the percentage of companies that are exposed to sustainable transition themes. Our SRI Fixed Income portfolio is invested in 34.5% of issuers exposed to the sustainable transition. In all our SRI portfolios, we seek to maximize this portion, without altering the investment philosophy.

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..

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

As we don't have a formalised process of investing in Green or Social Bonds, this question is non applicable.

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.

09.2. Additional information. [Optional]

We analyse the contribution to the sustainable transition for each company (we look at issuers, not financial instruments, so we use the same process for equity and fixed income). This analysis identifies a company's exposure (% of revenues) on one or more sustainable transition themes. A total of 38 themes and business areas have been identified as contributing to the sustainable transition. This number can vary every year, depending on the materiality of each transition theme and the emergence of new ones.

Our framework of sustainable transition themes is set up around 5 transitions: demographic, medical, economic, lifestyle and ecological. Each company is assessed according to its absolute level of revenues in each transition theme. Exposure ranges from 0 to 100% and results in a recommendation on the extent of the company's exposure and contribution to the sustainable transition going from a "no exposure" position to a "pure player" profile. 

This assessment, along with the "Responsibility" risk analysis, enters into account when building the SRI Fixed Income portfolios.


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