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

PRI reporting framework 2020

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

Monitoring

SAM 05. Monitoring processes (listed equity/fixed income)

05.1. When monitoring managers, indicate which of the following types of responsible investment information your organisation typically reviews and evaluates

ESG objectives linked to investment strategy (with examples)

Evidence on how the ESG incorporation strategy(ies) affected the investment decisions and financial / ESG performance of the portfolio/fund

Compliance with investment restrictions and any controversial investment decisions

ESG portfolio characteristics

How ESG materiality has been evaluated by the manager in the monitored period

Information on any ESG incidents

Metrics on the real economy influence of the investments

PRI Transparency Reports

PRI Assessment Reports

RI-promotion and engagement with the industry to enhance RI implementation

Changes to the oversight and responsibilities of ESG implementation

Other general RI considerations in investment management agreements; specify

None of the above

LE

FI - Corporate (financial)
FI - Corporate (non-financial)
ESG objectives linked to investment strategy (with examples)
Evidence on how the ESG incorporation strategy(ies) affected the investment decisions and financial / ESG performance of the portfolio/fund
Compliance with investment restrictions and any controversial investment decisions
ESG portfolio characteristics
How ESG materiality has been evaluated by the manager in the monitored period
Information on any ESG incidents
Metrics on the real economy influence of the investments
PRI Transparency Reports
PRI Assessment Reports
RI-promotion and engagement with the industry to enhance RI implementation
Changes to the oversight and responsibilities of ESG implementation
Other general RI considerations in investment management agreements; specify
None of the above

05.2. When monitoring external managers, does your organisation set any of the following to measure compliance/progress

ESG score or assessment

ESG weight

ESG performance minimum threshold

Real world economy targets

Other RI considerations

None of the above

LE

FI - Corporate (financial)
FI - Corporate (non-financial)
ESG score
ESG weight
ESG performance minimum threshold
Real world economy targets
Other RI considerations
None of the above

If you select any `Other` option(s), specify

External managers are investment companies which are mandated by ERAFP to make investments in accordance with its SRI Charter. They have the duty to inform and alert ERAFP about the implementation of the Charter. On a bi-annual basis, the compliance with ERAFP SRI Charter of the investments made on its behalf is discussed during investment committee meetings with investment managers. In order to prepare these meetings, ERAFP recourses to the services of an ESG research provider who conducts on a bi-annual basis an exhaustive review of the portfolio aiming at monitoring the compliance of ERAFP's investment with its SRI requirements.

In addition to ESG performance, ERAFP evaluates engagement activities (dialogue, collaborative initiatives and voting results) led by the external managers.

After the revision of ERAFP's SRI charter in 2016, external managers have also the duty to measure ESG impacts of their portfolio (example: the portfolio's carbon footprint, percentage of women on boards, % of turnover,...) and to monitor controversies.

Our work with service providers on Climate also allows us to monitor asset manager's portfolios environmental performance  

05.3. Provide additional information relevant to your organisation`s monitoring processes of external managers. [OPTIONAL]

          
        

SAM 06. Monitoring on active ownership (listed equity/fixed income)

06.1. When monitoring managers, indicate which of the following active ownership information your organisation typically reviews and evaluates from the investment manager in meetings/calls

Engagement

Report on engagements undertaken (summary with metrics, themes, issues, sectors or similar)

Report on engagement ESG impacts (outcomes, progress made against objectives and examples)

Information on any escalation strategy taken after initial unsuccessful dialogue

Alignment with any eventual engagement programme done internally

Information on the engagement activities’ impact on investment decisions

Other RI considerations relating to engagement in investment management agreements; specify

None of the above

LE

FI - Corporate (financial)
FI - Corporate (non-financial)
Report on engagements undertaken (summary with metrics, themes, issues, sectors or similar)
Report on engagement ESG impacts (outcomes, progress made against objectives and examples)
Information on any escalation strategy taken after initial unsuccessful dialogue
Alignment with any eventual engagement programme done internally
Information on the engagement activities’ impact on investment decisions
Other RI considerations relating to engagement in investment management agreements; specify
None of the above

(Proxy) voting

Report on voting undertaken (with outcomes and examples)

Report on rational of voting decisions taken

Adherence with the agreed upon voting policy

Other RI considerations relating to (proxy) voting in investment management agreements; specify

None of the above

LE

Report on voting undertaken (with outcomes and examples)
Report on voting decisions taken
Adherence with the agreed upon voting policy
Other RI considerations relating to (proxy) voting in investment management agreements; specify
None of the above

If you select any `Other` option(s), specify

We also ask for a report on supported, filed or co-filed shareholder resolutions


SAM 07. Percentage of (proxy) votes

07.1. For the listed equities for which you have given your external managers a (proxy) voting mandate, indicate the approximate percentage (+/- 5%) of votes that were cast during the reporting year.

99.69 %

Specify the basis on which this percentage is calculated.

07.2. For the listed equities for which you have given your external managers a mandate to engage on your behalf, indicate the approximate percentage (+/- 5%) of companies that were engaged with during the reporting year.

326 Number of companies engaged
69 Proportion (to the nearest 5%)

07.3. Additional information [OPTIONAL]

          The engagement with companies represents 83% of the market value of the ERAFP's equity portfolio. The engagement conducted by asset managers of listed equity portfolios on ERAFP's behalf is mostly direct engagement (293 companies vs.250 in 2018). It represents 77% of ERAFP's listed equity portfolio value. For some companies, there are both direct and collaborative engagements or only collaborative engagement led (collaborative engagement with 125 companies vs. 54 in 2018).                   
All ERAFP's asset managers for listed equity mandates conduct at least direct engagement and most of them also conduct collaborative engagement with ERAFP portfolio's issuers. ERAFP also monitors the number of issuers that changed or made a formal commitment to change in the reporting year following asset manager's engagement activities. Even if engagement's results should be measured on several years, the number of companies who has made a commitment to change or improved their ESG practices in 2019 is encouraging (97 companies).
ERAFP also engages with its corporate bond portfolio's issuers via its external asset managers. Even if the engagement is not yet as developed as for listed equities, it continues to improve. In 2019, asset managers have led engagement with 117 corporate bonds issuers (including corporate bonds and convertibles bonds, vs. 97 in 2018).
Note that equity portfolio represents a significant higher weight in ERAFP portfolio than corporate bond portfolio.
        

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