We include ESG criteria as an additional requirement when selecting and appointing an external manager. We value very positively that the manager is a PRI signatory although it is not an exclusion-criteria (we do not exclude a manager if it is not a PRI signatory)
For both equity and fixed income, we require our external managers to provide with the details of how the include they ESG criteria in their investement process. We ask them how they engage with companies where they invest in and the specific monitoring process for ESG variables when they invest in companies with poor sustainability ratings.
In our due diligence process, in addition to the "traditional" questionnaire to evaluate external managers, we have developed a comprehensive list of questions to understand their ESG approach. The answers we receive (both in relation to traditional finace and ESG approach) are included in a matrix where ESG plays a very important role in the final score.
For fixed income, given that we have given a "global fixed income mandate" to two managers (Amundi and PIMCO) in order to manage two sub-portfolios of one of our mutual funds, in addition to manage the portfolio using ESG criteria (this is not negotiable), we are asking our external managers to provide us with ESG reporting to understand better environmental and social impact of our investments although it is not easy to integrate afterwards information from both managers given the different concepts and methodology. There is a formal commitment to achieve in 2020 an ESG label (probably Luxflag) for the fund where the two sub-portfolios are.
For equities, our clients have the possibility to invest in two fund of funds (apart from one Fineco-directly selected stocks fund) where the ESG score in the external manager evaluating matrix pays a vital role.