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Nippon Life Insurance Company

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.

We have integrated the following analyses into traditional financial analysis: analysis of the impact of ESG-related risks on the long-term financial strength and creditworthiness of companies; and analysis of the risk of the materialization of a sharp deterioration in creditworthiness due to the occurrence of a material ESG risk. We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring.

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

SSA

We have integrated the following analyses into traditional financial analysis: analysis of the impact of ESG-related risks on the long-term financial strength and creditworthiness of issuers; and analysis of the risk of the materialization of a sharp deterioration in creditworthiness due to the occurrence of a material ESG risk. We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring.

Corporate (financial)

We have integrated the following analyses into traditional financial analysis: analysis of the impact of ESG-related risks on the long-term financial strength and creditworthiness of companies; and analysis of the risk of the materialization of a sharp deterioration in creditworthiness due to the occurrence of a material ESG risk. We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring.

Corporate (non-financial)

We have integrated the following analyses into traditional financial analysis: analysis of the impact of ESG-related risks on the long-term financial strength and creditworthiness of companies; and analysis of the risk of the materialization of a sharp deterioration in creditworthiness due to the occurrence of a material ESG risk. We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring.

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
SSA
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
SSA

Environmental

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.

SSA

We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring. In addition to information disclosed by companies, we refer to ESG ratings and scores and reports of external ESG research firms.

In addition, we indicate the ESG ratings scores and ratings of external ESG research firms in the "Overview of Issuer and Investment Research Report" and various monitoring documents, all of which are prepared when making investment decisions. We address bond issues with particularly low ratings scores by having in-house analysts assigned to such bond issues conduct meticulous research and provide comments on their assessments.

Corporate (financial)

We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring. In addition to information disclosed by companies, we refer to ESG ratings and scores and reports of external ESG research firms.

In addition, we indicate the ESG ratings scores and ratings of external ESG research firms in the "Overview of Issuer and Investment Research Report" and various monitoring documents, all of which are prepared when making investment decisions. We address bond issues with particularly low ratings scores by having in-house analysts assigned to such bond issues conduct meticulous research and provide comments on their assessments.

Corporate (non-financial)

We incorporate ESG information when analyzing bond issues, when making investment decisions and when conducting monitoring. In addition to information disclosed by companies, we refer to ESG ratings and scores and reports of external ESG research firms.

In addition, we indicate the ESG ratings scores and ratings of external ESG research firms in the "Overview of Issuer and Investment Research Report" and various monitoring documents, all of which are prepared when making investment decisions. We address bond issues with particularly low ratings scores by having in-house analysts assigned to such bond issues conduct meticulous research and provide comments on their assessments.

12.3. Additional information.[OPTIONAL]


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