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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.

A financial analysis is made of the potential investment. This analysis also contains a section on the ESG performance of the investment. These two factors together inform the decision of the portfoliomanager.

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 credit portfolio is managed by our fiduciary manager, SPF Beheer. SPF Beheer applies a special investment strategy on our internally managed credit portfolio. All of the bonds are chosen via a selective procedure. The investment decisions are not based on a predefined benchmark. Instead, the portfolio contains a limited number of bond issues. This number is sufficient for differentiation purposes, but not too big to run out of control. For every company a full financial screening is made. A paragraph on ESG risk is part of this screening. This paragraph contains an analysis of the ESG score of the company. The input is derived from an external research provider. The rationale behind the scoring, plus additional information, will be analysed by the analyst and recorded in the investment proposal. ESG risks can be a reason not to invest in a company.

The analysts responsible for the screening work for both the equity and FI portfolio. Additionally, there is a close cooperation between the FI and the equity team. Working knowledge on (ESG characteristics) of companies is shared between the teams.

Corporate (non-financial)

The credit portfolio is managed by our fiduciary manager, SPF Beheer. SPF Beheer applies a special investment strategy on our internally managed credit portfolio. All of the bonds are chosen via a selective procedure. The investment decisions are not based on a predefined benchmark. Instead, the portfolio contains a limited number of bond issues. This number is sufficient for differentiation purposes, but not too big to run out of control. For every company a full financial screening is made. A paragraph on ESG risk is part of this screening. This paragraph contains an analysis of the ESG score of the company. The input is derived from an external research provider. The rationale behind the scoring, plus additional information, will be analysed by the analyst and recorded in the investment proposal. ESG risks can be a reason not to invest in a company.

The analysts responsible for the screening work for both the equity and FI portfolio. Additionally, there is a close cooperation between the FI and the equity team. Working knowledge on (ESG characteristics) of companies is shared between the teams.

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)

An SRI screening is made on every potential portfolio company. The SRI screening determines whether the company fulfils our requirements in the field of SRI. The screening is mainly based on information from an external research provider, combined with additional research by analysts at SPF Beheer.

Corporate (non-financial)

An SRI screening is made on every potential portfolio company. The SRI screening determines whether the company fulfils our requirements in the field of SRI. The screening is mainly based on information from an external research provider, combined with additional research by analysts at SPF Beheer.

12.3. Additional information.[OPTIONAL]


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