This report shows public data only. Is this your organisation? If so, login here to view your full report.

Lazard Frères Gestion

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 (financial)
0 Screening alone
0 Thematic alone
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 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.

Credit analysts consult the extra-financial research provided by our partners and check the financial valuation is consistent with extra-financial ratings, meaning the spread level remains interesting from a credit risk perspective.

Issuers having the weakest extra-financial ratings based on Vigeo's analysis are quarterely monitered.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


FI 03. Processes to ensure analysis is robust

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

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

03.3. Additional information. [Optional]

We have created a database accessible via excel with all ESG information from our extra-financial partners, Vigeo Eiris and Trucost.

The database is accessible to all fund manager-analysts in the fixed income department. The database consists of quantitative data from our extra-financial partners Vigeo Eiris and Trucost. The goal of the database is to facilitate the access of ESG data to our fund manager-analysts.

The data from Vigeo are : 

  • The ratings from all 6 domains (Environment, Human Resources, Human Rights, Customers and Suppliers, Community Involvment, Corporate Governance)
  • The overall company rating

The data from Trucost are: 

  • Scope 1 & 2 emissions
  • Carbon intensity scope 1 & 2

We are currently working on a classification by sector and country of the best and worst performing companies. 


(C) Implementation: Integration

FI 10. Integration overview

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

We use the ESG evaluation performed by our partner Vigeo Eiris, which focuses on 6 Domains (Environment, Human Rights, Human Ressources, Corporate Governance, Customers and Suppliers, Community Involvment).

We also have access to the data from in-house analysis realized by our equity department, for which public information and brokers information are used.

Finally, we can also refer to a database containing all ESG quantitative data from our partner Vigeo and Trucost.

Fixed Income analysts consult all available extra-financial research and check the financial valuation is consistent with extra-financial ratings, meaning the spread remains interesting from a credit risk perspective.

In addition, our fixed income funds are subject to a quarterly ESG analysis, based on Vigeo’s data.

For each fund, the global ESG rating of all issuers in the portfolio are specified in a file sent on a quarterly basis to fund manager-analysts : This file highlights, for every of each issuers, the overall ESG rating as well as the ratings of the 6 domains analyzed.

Furthermore, the ESG team writes a comment on issuers with low overall rating (overall rating “weak”), using quantitative data from Vigeo, the comments are also sent on a quarterly basis to fund manager-analysts.

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

Corporate (financial)

The ESG evaluation is focused on 6 Domains (Environment, Human Rights, Human Ressources, Corporate Governance, Customers and Suppliers, Community Involvment), which can be summed up in 3 : Environment, Governance & Social. The evaluation is based on criteria, which are weighted depending on their importance within the firm's sector.

 

Corporate (non-financial)

The ESG evaluation is focused on 6 Domains (Environment, Human Rights, Human Ressources, Corporate Governance, Customers and Suppliers, Community Involvment), which can be summed up in 3 : Environment, Governance & Social. The evaluation is based on criteria, which are weighted depending on their importance within the firm's sector.

 

10.3. Additional information [OPTIONAL]

SSA

The SSA analysis approach is based on 3 pilars, Environment, Social & Governance. Different criteria are activated depending on the situation of the country, to evaluate the situation within its context. The indicators used are based on the Sustainable development objectives defined by the UN.


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)

The ESG evaluation is focused on 6 Domains (Environment, Human Rights, Human Ressources, Corporate Governance, Customers and Suppliers, Community Involvment), which can be summed up in 3 : Environment, Governance & Social. The evaluation is based on criteria, which are weighted depending on their importance within the firm's sector.

Corporate (non-financial)

The ESG evaluation is focused on 6 Domains (Environment, Human Rights, Human Ressources, Corporate Governance, Customers and Suppliers, Community Involvment), which can be summed up in 3 : Environment, Governance & Social. The evaluation is based on criteria, which are weighted depending on their importance within the firm's sector.

12.3. Additional information.[OPTIONAL]


Top