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Federated Hermes, Inc. (formerly Federated Investors, Inc.)

PRI reporting framework 2020

You are in Direct - Fixed Income » Outputs and outcomes

Outputs and outcomes

FI 17. Financial/ESG performance

17.1. Indicate whether your organisation measures how your incorporation of ESG analysis in fixed income has affected investment outcomes and/or performance.

Select all that apply
SSA
CorporateĀ (financial)
Corporate (non-financial)
Securitised
We measure whether incorporating ESG impacts portfolio risk.
We measure whether incorporating ESG impacts portfolio returns.
We measure the ESG performance/profile of portfolios (relative to the benchmark).
None of the above

17.2. Describe how your organisation measures how your incorporation of ESG analysis in fixed income has affected investment outcomes and/or ESG performance. [OPTIONAL]

We have developed multiple in-house capabilities and systems to measure ESG performance and risk, both absolute and relative to a benchmark or peers, for our Fixed Income strategies.  All of our investment teams are equipped with multiple-level portfolio ESG analytics.  Our suite of proprietary tools includes a Portfolio Snapshot, Carbon Footprint, and Engagement Measurement.  Collectively, these tools allow us to quantify ESG momentum, assess carbon-related risks and engagement coverage and in our portfolios. 

The Federated Hermes Responsible Investing Office, in collaboration with the Risk Management Committee and Portfolio Attribution division, have created various mechanisms for measuring ESG risk and performance.  Using advanced statistical risk modeling and factor-based software applications, we are able to quantify the active ESG risks our various fixed income portfolios are exposed to relative to their benchmark and category peers ex-ante.  Ex-post portfolio attribution formally occurs on a monthly basis, but in periods of heightened volatility or specific client requests, a comprehensive review isolating specific ESG factor exposures can be performed in real-time.  On a quarterly basis the Risk Management Committee meets to review all Fixed Income product performance which includes a dedicated and systematic assessment of material ESG risk exposures.

17.3. Additional information.[OPTIONAL]


FI 18. Examples - ESG incorporation or engagement (Private)


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