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Hwabao WP Fund Management Co., Ltd

PRI reporting framework 2020

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

C) 実施:ESG問題の統合

FI 10. Integration overview

10.1. ESGを従来の財務分析に統合するアプローチを説明してください。

We believe that ESG factors has a certain correlation with the performance of financial indicators of enterprises .On the basis of traditional internal credit rating framework, the influence of ESG factors on credit risk is identified and evaluated.

For industrial enterprises, ESG factors will directly or indirectly affect production costs. Enterprises with advantages of energy conservation and safe production will show higher gross profit rate and relatively healthy cash flow performance through higher production efficiency and lower cost and loss.We can get more reliable conclusions by combining ESG performance with corporate financial indicators.

Corporate governance factors  (such as the management change, affiliate transaction, guaranty, etc.) will bring new potential contingent liabilities and  negative effect to the financial sustainability. We incorporate these factors into our financial analysis, especially in the study of accounting accounts that may be prone to sugar-coating, and lower the credit scores for companies that are exposed to this risk.

10.2. 投資する債券の各種類に対してESG統合アプローチをどのように調整するのか説明してください。

SSA

We focus on ESG factors: for example, local government debt ratio, growth momentum, industrial structure (whether high pollution, overcapacity), government governance efficiency, population structure, per capita disposable income, social welfare , environmental protection, mutual insurance of regional enterprises, etc.

社債(金融)

Key ESG factors: enterprise nature (whether listed or state-owned), equity structure, corporate governance, affiliate transaction, business strategy, management stability, risk management level, employee compensation and benefits, government support, inclusive finance, green credit, etc.

社債(非金融)

Key ESG factors:enterprise nature (whether listed or state-owned), actual control, corporate governance, affiliate transaction, external guarantee, industrial policy,  energy consumption, waste emission, employee compensation and welfare, and negative news, etc.

10.3. 補足情報 [任意]


FI 11. Integration - ESG information in investment processes

11.1. ESG情報が、通常、投資プロセスの一部としてどのように使用されるのか記載してください。

当てはまるものをすべて選択してください
SSA
社債(金融)
社債(非金融)
ESG分析をファンダメンタル分析に組み込んでいる
ESG分析が発行体の内部信用評価を調整するために利用される
ESG分析が予想財務業績および将来キャッシュフロー予測を調整するために利用される
ESG分析が発行体の同業グループと比較したランキングに影響する
発行体のESG債スプレッドおよび同セクター企業に対するその相対価値が、すべてのリスクが織り込まれているか否かを把握するために分析される
各種デュレーション/満期の発行体債券へのESG分析の影響が分析される。
感度分析およびシナリオ分析が、ベースケースとESG組み込み証券評価の差を比較する評価モデルに適用される
ESG分析が、ポートフォリオのウェイティング決定に組み込まれている
会社、セクター、国、通貨が、ESGエクスポージャーの変化およびリスク制限の違反についてモニタリングされる
ESGリスクが大きい証券についてポートフォリオのESGプロファイルが検討され、ベンチマークのESGプロファイルと比較して評価される
その他(具体的に記載してください)

11.2. 補足情報 [任意]


FI 12. Integration - E,S and G issues reviewed

12.1. 組織の統合プロセスでESG問題をどのように検討するか示してください。

E(環境)
S(社会)
G(ガバナンス)
SSA

E(環境)

S(社会)

G(ガバナンス)

社債(金融)

E(環境)

S(社会)

G(ガバナンス)

社債(非金融)

E(環境)

S(社会)

G(ガバナンス)

12.2. 組織の統合プロセスでE/S/G要因を検討する方法を詳しく説明してください。

SSA

We incorporate ESG factors into a traditional credit analysis framework.For SSA investment, we focus on ESG factors: for example, local government debt ratio, growth momentum, industrial structure , government governance efficiency, population structure, per capita disposable income, social welfare security, environmental protection, etc.Governance, the most important of the three, is directly linked to the government's ability and repayment willingness.

社債(金融)

Corporate governance is still the most important aspect. In addition, financial institutions also play an Important role in assuming social responsibilities (e.g., inclusive finance, green finance, financial stability, etc.).

Key ESG factors:for example,enterprise nature (whether listed or state-owned), equity structure, corporate governance, affiliate transaction, business strategy, management stability, risk management level, employee compensation and benefits, government support, inclusive finance, green credit, etc.

社債(非金融)

In the study of industrial and commercial enterprises, we focus on: for example, enterprise nature (whether listed or state-owned), actual control, corporate governance, affiliate transaction, external guarantee, industrial policy,  energy consumption, waste emission, employee compensation and welfare, and negative news, etc

We still take the level of corporate governance as an important factor to consider, while for private enterprises, the actual controller of the enterpris often plays a key role in the development of enterprises.

12.3. 補足情報 [任意]


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