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Ircantec

PRI reporting framework 2019

You are in Indirect – Manager Selection, Appointment and Monitoring » Appointment

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

ESG Objectives

          Asset managers can propose their own ESG strategy during the selection process, but they have to cope with the Ircantec SRI Charter. Most of the managers currently under contract implement best-in-class strategies (and its derivatives, best-effort or best solutions), resulting generally in a 20-30% reduction of the investment universe.
        
          As specified in the management agreement :
exclusion of companies producing and/or marketing controversial weapons; 
exclusion of companies exploiting coal under specified thresholds;
exclusion of companies from the tobacco sector;
exclusion from traditional oil and gas sector bonds;
exclusion of companies from specialised oil and gas sector, as well as in non-European equities and integrated companies whose investment expenditure is not compatible with a 2°C trajectory.
        
          Asset managers can propose their own ESG strategy during the selection process. Most of the managers currently under contract implement best-in-class strategies (and its derivatives, best-effort or best solutions), resulting generally in a 20-30% reduction of the investment universe.
        
          Managers have to take into account values of the scheme (as expressed in the SRI Charter) and the Ircantec engagement policy as they act on its behalf. Themes and sectors are proposed in the engagement policy, but asset managers decide in last resort whether they engage in specific areas.
        
          Asset managers vote according the voting rules of Ircantec on the whole portfolio. While voting process is mainly automatically and electronically proceeded, Ircantec and its managers have a closer watch on resolutions from their largest invested companies, major contributors to carbon emission and biggest holders of stranded assets ("focus list") : resolutions are analysed by a consulting firm and positions are confirmed by a lead trustee. 
In addition, prior to the voting process, each annual general meeting with a high environmental impact is the subject of an analysis of the energy and ecological transition carried out by the SRI team and validated by the trustees, in order to better assess the company's positioning in the transition.
This allows Ircantec to better consider climate and social dimensions.
        

Incentives and controls

Reporting requirements

Benchmark

          Barclays Euro-Aggregate Treasury ; Barclays Global Treasury Majors ex Japan ; Barclays World Govt Inflation Linked Bonds 1-10 Year ; Barclays Inflation Linked Euro CPI 1-10 Year
        

ESG Objectives

          Asset managers can propose their own ESG strategy, based upon Ircantec's values and SRI Charter.
        
          The Ircantec Board of Directors has decided to focus on States that: 
- promote social progress;
- implement environment-friendly policies;
- have exemplary governance;
- have ratified international treaties and conventions (including prohibited weapons).
        
          Asset managers have to follow Ircantec values based upon the SRI charter, and ESG considerations (public policies, climate strategy, etc...) are factored in the investment process.
        

Incentives and controls

Reporting requirements

Benchmark

          Barclays Euro Aggregate Corporate
        

ESG Objectives

          Asset managers can propose their own ESG strategy during the selection process. Most of the managers currently under contract implement best-in-class strategies (and its derivatives, best-effort or best solutions), resulting generally in a 20-30% reduction of the investment universe.
        
          As specified in the management agreement :
exclusion of companies producing and/or marketing unconventional weapons; 
exclusion of companies exploiting coal under specified thresholds;
exclusion of companies from the tobacco sector;
exclusion from traditional oil and gas sector bonds;
exclusion of companies from specialised oil and gas sector, as well as in non-European equities and integrated companies whose investment expenditure is not compatible with a 2°C trajectory.
        
          Asset managers can propose their own ESG strategy and methodology during the selection process. Most of the managers currently under contract implement best-in-class strategies (and its derivatives, best-effort or best solutions), resulting generally in a 20-30% reduction of the investment universe. Criteria of the ESG assessment are based upon a range of indicators, differing between managers.
        

Incentives and controls

Reporting requirements

Benchmark

          Barclays Euro Aggregate Corporate
        

ESG Objectives

          Asset managers can propose their own ESG strategy during the selection process. Most of the managers currently under contract implement best-in-class strategies (and its derivatives, best-effort or best solutions), resulting generally in a 20-30% reduction of the investment universe.
        
          As specified in the management agreement :
exclusion of companies producing and/or marketing unconventional weapons; 
exclusion of companies exploiting coal under specified thresholds;
exclusion of companies from the tobacco sector;
exclusion from traditional oil and gas sector bonds;
exclusion of companies from specialised oil and gas sector, as well as in non-European equities and integrated companies whose investment expenditure is not compatible with a 2°C trajectory.
        
          Asset managers can propose their own ESG strategy and methodology during the selection process. Most of the managers currently under contract implement best-in-class strategies (and its derivatives, best-effort or best solutions), resulting generally in a 20-30% reduction of the investment universe. Criteria of the ESG assessment are based upon a range of indicators, differing between managers.
        

Incentives and controls

Reporting requirements

Benchmark

          We don't use a standard benchmark on this asset class.
        

ESG Objectives

          Asset managers can propose their own ESG strategy, and some of the funds are oriented towards green business solutions. An asset manager will execute the global ESG reporting of the Ircantec unlisted portfolio, alongside a ESG rating firm (Vigeo)
        
          Any business model not compatible with a 2°C trajectory.
        
          Asset managers can propose their own ESG integration methodology.
        

Incentives and controls

Reporting requirements

Benchmark

          We don't use a standard benchmark on this asset class.
        

ESG Objectives

          Our segregated property fund mainly invests in social housing (student residences, nursing homes, affordable housing).
        
          The fund is assessed by a ESG third-party (including energy consumptions and other related data).
        

Incentives and controls

Reporting requirements

Benchmark

          We don't use a standard benchmark on this asset class.
        

ESG Objectives

          Asset managers can propose their own ESG strategy, and funds are mainly oriented towards energy transition (renewable energies, energy efficiency) and social infrastructures sectors. An asset manager will execute the global ESG reporting of the Ircantec unlisted portfolio, alongside an ESG rating firm (Vigeo).
        
          Our infrastructure portfolio is focused on green and social infrastructure.
The objective is to support the energy transition of the territories, by financing local authorities, public institutions, small infrastructure projects, in the areas of renewable energies, energy transition and environment.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

04.4. Provide additional information relevant to your organisation's appointment processes of external managers. [OPTIONAL]

          As part of the appointment processes of external managers, Ircantec implements a tender aimed at assessing the ESG proposition of each candidate through the coherence and quality of the proposed management process, the clarity of the organization and efficiency of the conduct of operations. The questions cover many topics such as the inclusion of SRI criteria or the integration of the energy transition into the investment universe. The answers to the questions must enable Ircantec to assess the organization of the process and the means in place.
        

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