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Federal Finance

PRI reporting framework 2019

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.

Each issuer is analysed by a credit analyst and an ESG analyst. Both analysts work closely to analyse the issuer on a 360° basis. For each sector they have determined ESG topics that have materiality, that is to say, that can have an impact on financial metrics. The ESG analyst determines if the issuer is exposed to ESG risks and if it is able to manage adequately this exposure. A high level of ESG risk can have a negative impact on the target price or on the credit rating.

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

Corporate (financial)

As mentionned previously, ESG topics have been determined for each sector in order to have a relevant analysis.

The ESG integration strategy described above is adapted to financial corporates as it includes a strong analysis of governance risks. Governance is a topic with high materiality on financial companies.

Corporate (non-financial)

As mentioned previously, ESG topics have been determined for each sector in order to have a relevant analysis. For non-financial companies, ESG topics will be analysed regarding their materialty on the issuer.

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)

ESG factors are part of each issuers analysis. These factors are determined on a sector level. A company will be assessed regarding its exposure to this topic and assessed on its ability to manage this exposure.

Corporate (non-financial)

ESG factors are part of each issuers analysis. These factors are determined on a sector level. A company will be assessed regarding its exposure to this topic and assessed on its ability to manage this exposure.

12.3. Additional information.[OPTIONAL]


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