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Ålandsbanken

PRI reporting framework 2020

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (C) Implementation: Integration

(C) Implementation: Integration

FI 10. Integration overview

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

We have a dedicated ESG team, which also includes portfolio management (called “risk takers”). Thus, the portfolio manager who makes the investment decision has all the information needed to advance the process. We do not just look at the financial figures as separated from ESG definition and information set, but they go together throughout the investment decision process. Therefore, there is no 'gap' in the consideration of the ESG factors in relation to the investment decision as a whole. It is important that collective discussion is used to identify the factors that affect valuation and to share responsibility for the construction of the portfolio. There is no difference between ESG analysis and traditional financial statement analysis. Nor is there any difference between the traditional roles of the analyst and the portfolio manager in the team. Team members are all risk takers who share common ESG awareness and knowledge.
 

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

Corporate (financial)

Please see previous answer.

Corporate (non-financial)

Please see previous answer

10.3. Additional information [OPTIONAL]


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 in Additional Information

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)

We use different serviceprovides information on E, S and G on all the issues that are included in the portfolios. We especially look if there are some risks to the downside from one of these and if that could have an impact on repayment ability of the company. The worst case scenario would be a default due to one of these factors. 

Corporate (non-financial)

We use different serviceprovides information on E, S and G on all the issues that are included in the portfolios. We especially look if there are some risks to the downside from one of these and if that could have an impact on repayment ability of the company. The worst case scenario would be a default due to one of these factors. 

12.3. Additional information.[OPTIONAL]


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