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Ircantec

PRI reporting framework 2019

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

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories (Private)


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          PRI reporting
        
Conducted by
Asset class
Scope and process

During the selection process, we review if the manager is a signatory of the PRI.

Outcomes

Because our selection process is point based, managers that did not sign the PRI are given negative points.

Topic or issue
          ESG scores
        
Conducted by
Asset class
Scope and process

Our new systematic equity funds had lower ESG scores in last reports than other equity funds. A specific work has been conducted with their manager and ESG teams to understand where were the differences and what are the points for improvement.

Outcomes

It appears that the ESG scores as a whole have some common bias:

  • Small and mid caps are disadvantaged (less information available, loose proximity with rating agencies, etc.) ;
  • Extra-European companies are disadvantaged (different treatments and understandings of ESG issues) ;
  • ESG evaluation grid and components’ weight differs from one service provider to another (some are more demand on social issues, other more interested by environmental results, etc.).

Funds focusing on these investment categories or relying on a single ESG data provider have more difficulty to outperform standards ESG benchmarks.

Topic or issue
          Green Bonds reporting
        
Conducted by
Asset class
Scope and process

With the implementation of a dedicated green bonds fund, questions come up about the monitoring of an adequate reporting for such an asset.

Discussions was held with the specialized asset manager in charge of the fund to set a specific reporting model.

Outcomes

This model includes features on green bonds impacts and management, both at a line-by-line and portfolio levels.

Topic or issue
          Composition of the "focus list" for the voting campaign
        
Conducted by
Asset class
Scope and process

Each year, Ircantec organizes a dedicated mechanism with a proxy voting advisor and its equities asset managers for analysing annual meetings' resolutions of 30 companies and voting according to its core values:

  • Boards feminization;
  • Financial statements transparency;
  • Payment of a "responsible" dividend;
  • Consistent energy transition strategies;
  • Reducing excessive executives' compensations.

Issue was about strengthening the scope and reach of this mechanism.

Outcomes

Whereas companies were solely chosen in function of their Ircantec's market value, methodologies has been changed to also select companies that have high CO² emissions levels or stranded assets in their business.

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.

Ircantec pays more attention to the energy transition strategy of its top CO² emitters by now.

09.2. Additional information.


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