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Swedfund International AB

PRI reporting framework 2019

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income

ESG incorporation in actively managed fixed income

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
100 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

When investing in debt, Swedfund follows the same investment process and criteria as for the other direct investments, which includes compliance with Swedfund's Sustainability Policy, Anti-Corruption Policy and Exclusion list as well as Anti-Corruption Clauses in the contract. For further guidance please see SG in this report.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
Corporate (non-financial)
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

When investing in debt, Swedfund follows the same investment process and criteria as for the other direct investments, which includes compliance with Swedfund's Sustainability Policy, Anti-Corruption Policy and Exclusion list as well as Anti-Corruption Clauses in the contract. For further guidance please see Strategy and Governance in this report.

02.4. Additional information. [Optional]

Please see section PE 07 - PE 10 for information about type of ESG information that Swedfund considers during investment in private debt.


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

specify description

          Please see section SG 06 for information about investment process, ESGAP, audits. As well as PE 09 about ESG issues considerd during DD
        

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]

Our investment activities are based on three pillars - Impact on society, Sustainability and Financial viability - and on long-term commitment and sustainability in our partnerships. These pillars support everything we do - from making a decision to invest, throughout the entire management phase, to regular measurement of results and finally an exit out of the investment.
Please see OO 11.4 and SG 7 for more detailed information.


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

When investing in debt, Swedfund follows the same investment process and criteria as for the other direct investments, which includes compliance with Swedfund's Sustainability Policy, Anti-Corruption Policy and Exclusion list as well as as well as Anti-Corruption Clauses in the contract. For further guidance please see Strategy and Governance in its entirety for information about: exclusion list, Swedfund's Ethical Compass, international norms Swedfund adheres to, Swedfund's Sustainability Policy and more.

04.3. Additional information. [Optional]


FI 05. Examples of ESG factors in screening process

05.1. Provide examples of how ESG factors are included in your screening criteria.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Please refer to SG 07.2 for more detailed information about the investment process and screening requirements 

05.2. Additional information.


FI 06. Screening - ensuring criteria are met

06.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening?

other description

          Please see section SG 05-06 about RI objectives and progress and Swedfund's Strategic Sustainability Goals. Please see section SG 07.2 about Swedfund's investment process
        
Norms-based screening

other description

          Please see section SG 05-06 about RI objectives and progress and Swedfund's Strategic Sustainability Goals. Please see section SG 07.2 about Swedfund's investment process
        

06.2. Additional information. [Optional]


(B) Implementation: Thematic

FI 07. Thematic investing - overview

07.1. Indicate what proportion of your thematic investments are:

Specify

          Swedfund does not invest in bonds but we encourage transperency and disclosure of information in all investments we do. Therefore we were recommended by the PRI to report on the section for bonds where applicable, although we do not invest in bonds. 

The disclosure principles under the green bonds principles can be applied to our investments. Please see the following sections: OO 11.4 about Swedfunds mission and investment modell standing on three pillars. SG 01-02 about international norms applicable to all Swedfund's investments, including private quity. SG 05-06 about RI objectives and progress and reporting on Swedfund's Strategic Sustainability Goals. SG 07.2 about Swedfund's investment process, the use of ESG audits and action plans.
        
100 %

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

Swedfund does not invest in bonds but we encourage transperency and disclosure of information in all investments we do. Please refer to section OO 11.4 for more details around Swedfund's mission and business model based on the three pillars: Social impact, sustainability and financial viability - which is applied in all our engagements.  

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..

          Swedfund does not invest in bonds, but the disclosure principles under the green bonds principles can be applied to all our investments.
        

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

Swedfund does not invest in bonds but we encourage transperency and disclosure of information in all investments we do. Therefore we were recommended by the PRI to report on the section for bonds where applicable, although we do not invest in bonds. The disclosure principles under the green bonds principles can be applied to all our investments. Please see the following sections: OO 11.4 about Swedfunds mission and investment modell standing on three pillars. SG 01-02 about international norms applicable to all Swedfund's investments, including private quity. SG 05-06 about RI objectives and progress and reporting on Swedfund's Strategic Sustainability Goals. SG 07.2 about Swedfund's investment process, the use of ESG audits and action plans.

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.

          Please see OO11.4 and SG 01.4-5 about Swedfundss mission and business model and SG 01 about international norms
        

09.2. Additional information. [Optional]


(C) Implementation: Integration

FI 10. Integration overview

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

Please see section OO 11.3 about Swedfunds mission and investment modell standing on three pillars.
Please see section SG 01 about international norms applicable to all Swedfund's investments, including private quity.
Please see section SG 05-06 about RI objectives and progress and Swedfund's Strategic Sustainability Goals.
Please see section SG 07 about Swedfund's investment process, the use of ESGAP and audit plans. 

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

Corporate (non-financial)

Swedfund applies the same approach/principles regardless the type of investment, hence the same approach is applied for direct private debt and loan investments (fixed income) as for direct or indirect equity. Please refer to question FI 11.1 for further details 

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 (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]

ESG is one of three pillars in Swedfund's investment model and is integrated through the whole investment cycle. Please refer to:

OO 11.4 about Swedfunds mission and business model standing on three pillars.
SG 01-02 about international norms applicable to all Swedfund's investments, including private quity.
SG 05-06 about RI objectives and progress and reporting on Swedfund's Strategic Sustainability Goals.
SG 07.2 about Swedfund's investment process, the use of ESG audits and action plans.


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 (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 (non-financial)

Please refer to section:

OO 11.4 about Swedfunds mission and investment modell standing on three pillars.
SG 01-02 about international norms applicable to all Swedfund's investments, including private quity.
SG 05-06 about RI objectives and progress and reporting on Swedfund's Strategic Sustainability Goals.
SG 07.2 about Swedfund's investment process, the use of ESG audits and action plans.

12.3. Additional information.[OPTIONAL]


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