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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 » ESG incorporation in actively managed fixed income » Implementation processes

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.
SSA
0 Screening alone
0 Thematic alone
0 Integration alone
100 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.

Sovereign, municipal and supranational bonds are managed in-house. ERAFP's investment team is thus directly in charge of the implementation of the SRI policy defined by the Board. This approach is based on an ESG rating framework comprising ERAFP's five values (Human rights, Social progress, Employee democracy, Environment, Governance and transparency) which are declined into about forty criteria adapted to the specificities of countries and local governments.

Aside from the integration of best in class ESG criteria the Board of Directors decided to add three specific exclusion criteria for sovereign bonds. Are excluded from the investment universe, countries which:

- have not abolished the death penalty,

- practice torture,

- have recourse to child soldiers.

Our investment universe for direct investment is relatively limited since it only comprises € denominated bonds issued by OCDE countries. As a consequence rather than implementing issuer selection rules based on a ranking of European countries, it has been decided to set a minimum ESG average score to obtain in order to be eligible for investment : ERAFP cannot invest in a country with an overall ESG score which is below the average (50/100).

01.3. Additional information [Optional].

In addition, ERAFP invests in three sovereign Climate-related Bonds issued by EIB, French State and Ile de France region


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
SSA
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

Based on customised ESG scores and analysis provided by Vigeo, ERAFP's investment team ensures that investment proposals comply with ERAFP's SRI policy for this asset class: ERAFP cannot invest in issuers with an ESG score below average (50/100). On a bi-annual basis our ESG third-party providers (Vigeo) assesses our bond portfolios and reviews are conducted with the Investment Policy Committee of the Board. The SRI team completes Vigeo analysis with more qualitative data when it's necessary and reports to the ERAFP investment team.

In addition, ERAFP monitors environmental impacts of its sovereign bonds portfolio based on the analysis of its service provider for this asset class. In 2018, ERAFP has monitored carbon intensity, green and brown shares, trajectory in term of temperature and also physical risks for its portfolio and its Benchmark. This analysis allows ERAFP to manage its portfolio climate-related risks and opportunities. In 2019, as ERAFP has changed its service provider which is more specialist of corporate issuers, analysis have been conducted on carbon footprint and energy mix only. We will work to improve the scope of analysis in future years but as the portfolio almost does not move, the 2018 results are still quite relevant. 

02.4. Additional information. [Optional]

q


FI 03. Processes to ensure analysis is robust

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

specify description

          The internal SRI team reviews the service provider's ESG analysis and completes it with its own research if necessary
        

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

03.3. Additional information. [Optional]


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