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ERAFP - Etablissement de Retraite Additionnelle de la Fonction Publique Pension Scheme

PRI reporting framework 2020

You are in Direct - Fixed Income » Fixed income - Engagement

Fixed income - Engagement

FI 14. Engagement overview and coverage

14.1. Indicate the proportion of your fixed income assets on which you engage. Please exclude any engagements carried out solely in your capacity as a shareholder.

Category
Proportion of assets
SSA

14.2. Indicate your motivations for conducting engagement (SSA fixed income assets).

14.3. Additional information.[OPTIONAL]

Considering that as a significant debt holder of some local governments ERAFP could have an influence on these issuers' ESG practices it has initiated an engagement process with those in which it was most likely to invest :

Between 2008 and 2011, ERAFP wrote to 26 rated local authorities to explain its SRI investment policy and requirements. It then focused its efforts on authorities in its portfolio with lower ESG ratings, informing them that it would not be able to invest further in their securities unless they improved their ratings. The impact of these discussions was particularly positive with one authority, which achieved a significant improvement in its average SRI rating.

In 2013, we had a meeting with the ARF (association of French regions) to present them our SRI policy and ESG selection rules, to discuss about the quality of ESG reporting of regions, and to encourage them issuing sustainable (green and/or social) bonds.

Since then ERAFP has not subscribed to bonds newly issued by local governments. It continues to dialogue with some of its current local government issuers. For instance, ERAFP has gone to visit some infrastructures developed by the lle de France region.

Moreover, ERAFP' ESG provider, Vigeo, dialogues with local authorities when it updates their ESG evaluation. Vigeo send a questionnaire to complete and discuss with issuers to better understand their answers and tries to improve the transparency.


FI 15. Engagement method

New selection options have been added to this indicator. Please review your prefilled responses carefully.

15.1. Indicate how you typically engage with issuers as a fixed income investor, or as both a fixed income and listed equity investor. (Please do not include engagements where you are both a bondholder and shareholder but engage as a listed equity investor only.)

Select all that apply
Type of engagement
SSA
Individual/Internal staff engagements
Collaborative engagements
Service provider engagements

15.2. Indicate how your organisation prioritises engagements with issuers.

Select all that apply
SSA
Size of holdings
Credit quality of the issuer
Duration of holdings
Quality of transparency on ESG
Specific markets and/or sectors
Specific ESG themes
Issuers in the lowest ranks of ESG benchmarks
Issuers in the highest ranks of ESG benchmarks
Specific issues considered priorities for the investor based on input from clients and beneficiaries
Other

15.3. Indicate when your organisation conducts engagements with issuers.

Select all that apply
SSA
We engage pre-investment.
We engage post-investment.
We engage proactively in anticipation of specific ESG risks and/or opportunities.
We engage in reaction to ESG issues that have already affected the issuer.
We engage prior to ESG-related divestments.
Other, describe

15.4. Indicate what your organisation conducts engagements with issuers on.

Select all that apply
SSA
We engage on ESG risks and opportunities affecting a specific bond issuer or its issuer.
We engage on ESG risks and opportunities affecting the entire industry or region that the issuer belongs to.
We engage on specific ESG themes across issuers and industries (e.g., human rights).
Other, describe

If ‘other’ has been selected, please give a description

We explain the ERAFP SRI approach and ESG framework to issuers

15.5. Indicate how your organisation ensures that information and insights collected through engagement can feed into the investment decision-making process.

Select all that apply
SSA
Ensuring regular cross-team meetings and presentations.
Sharing engagement data across platforms that is accessible to ESG and investment teams.
Encouraging ESG and investment teams to join engagement meetings and roadshows.
Delegating some engagement dialogue to portfolio managers/credit analysts.
Involving portfolio managers when defining an engagement programme and developing engagement decisions.
Establishing mechanisms to rebalance portfolio holdings based on levels of interaction and outcomes of engagements.
Considering active ownership as a mechanism to assess potential future investments.
Other, describe
We do not ensure that information and insights collected through engagement can feed into the investment decision-making process.

15.6. Additional information.[OPTIONAL]

In addition to engagement with its own portfolio's issuers, ERAFP could also dialogue with sovereign bond issuers. For instance, in 2018, ERAFP has met a representant of a german local government  to present it its SRI policy and approach. By this way, ERAFP tries to encourage issuers to adopt ESG best practices.


FI 16. Engagement policy disclosure

16.1. Indicate if your publicly available policy documents explicitly refer to fixed income engagement separately from engagements in relation to other asset classes.

16.3. Additional information [OPTIONAL]

Our shareholder engagement guidelines are applicable for both equities and bond issuers


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