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Grupo Fineco

PRI reporting framework 2020

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Governance and human resources

SG 07. RI roles and responsibilities

07.1. Indicate the internal and/or external roles used by your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for responsible investment.

Roles

Select from the below internal roles

          Head of ESG Investments
        

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

The main responsibilities on ESG investments are in hands of:

- Board of Directors (BoD): they are committed to incorporate the concept of sustainability into the company. 2019 will be the second year where there is a Sustainability Annual Report, which is a great initiative to make public the importance of sustainability in the company. The great progress has been that the BoD has stated ESG as one of the pillars of the new strategic plan 2019-2021, with specific mention to achieving 100% of AuM with ESG integration by the end of 2021 and with a majority of funds with an ESG label by then. This means that now everybody at Fineco must be fully onboard into ESG integration in portfolios and when talking with clients. The Board also considers ESG world not only when investing but with active ownership initiatives (such as proxy voting, another important step we have done), engaging with public and private entities (events and conferences where we participate as speakers and as co-organizers), the creation of an independent ESG Committee, specific ESG training plan for the workforce and also with reporting ESG metrics such as relationship with SDGs.

- Chief Executive Officer: He increases his ESG role as the main person to execute BoD´s strategic plan. He has created a small team (members of the executive committee; the executive committee is the most important committee below the BoD) for designing the roadmap in ESG and every month there is a committee where the Head of ESG Investments does the briefing to the small committee of the achieved progress in different projects. He also keeps the role of reviewing the overall investment policies and methodologies, and establishing new ESG alliances and looking for new opportunities in this area. He is in close contact with public authorities to expand the ESG world in the financial, corporate, consultant, university (basically, all the agents in the ESG ecosystem) activities in the region.

- Head of Asset Allocation (CIO): he works with different Head of asset classes and the Head of ESG Investments to develop fully ESG integrated portfolios so that bankers can later propose to clients. 

- Chief Legal Officer: In charge of financial regulations and information disclosure, overlooks that the ESG fund and the information given to investors meet the requirements of the regulator
- Chief Risk Officer: Overlooks that analysts only buy financial products and companies that meet the ESG criteria and the maximum risks determined for the fund
- Head of ESG Investments: In charge of the overall ESG strategy and to execute the ESG projects selected by the small committee where he takes part. He is the support person for analysts, portfolio managers and bankers in order to be efficient in their training and implementation of the projects so that strategic goals are met by 2021. He is also in charge of designing training programs for the whole workforce in relation to ESG.
- Head of Fixed Income: She searches for new opportunities among fixed income assets, with a special focus on Green and Social Bonds. She is also in charge of overlooking that bonds and other assets in the fund meet the ESG criteria established for the fund and apart from qualitative analysis at SSA, corporate and financial level, she has started to develop internal analysis of ESG scores and credit spreads. We have added a new person with fixed income track record to strengthen our fixed income capabilities and to foster the ESG implementation in this asset class. Both persons also do the monitoring of external managers PIMCO and Amundi and demand an increasing non-financial reporting capabilities.

-Head of Structured Products: given that Fineco is very well known in Spain for its structured products capabilities and ideas, he has the task to switch all the structured products into ESG structured products. He has already done a great job screening different possibilites and we expect to be able to implement some of these ideas is 2020.

- Head of fund of funds: he has improved the due diligence questionnaire so that there is a more strict and demanding way to understand ESG integration in external managers. In addition, he is working to include ESG metrics in the quantitative model where he analyzes alpha generated (vs risk) by each fund manager.

- Analysts: ESG criteria is included as an additional factor when doing the analysis of each company on a qualitative basis, and then impacting the valuation models through adjustments to WACC and cash flow projections. In fixed income, as reported above, the analysis is done at qualitative level but steps are being taken to relate ESG with credit spreads in a more quantitative way.

- Head of Family Office: Family Office is a special department inside the company, it’s focused on clients with large net worth. He offers a customized advisory service for families with a holding of companies. He pushes different external entities to increase the percentage of assets with ESG techniques. 

- Bankers: they will increase their time spent on ESG training so that they can have a better dialogue with clients in relation to ESG and also they can be more demanding towards the Asset Management side to provide them with better ESG investment solutions.

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

1 Number

07.4. Additional information. [Optional]

The Head of ESG Investments is the coordinator to implement ESG criteria within Fineco, spending time with portfolio managers, heads of different departments, bankers, etc. He spends most of his time with all the workforce to help them integrate ESG in their daily work, and he is responsible for briefing the small team of the executive committee and delivering all the progress needed to achieve the goals set up at the strategic plan. 

Fineco obtains ESG scoring from MSCI ESG Research and increasingly from "traditional" sell side firms such as JPMorgan and Kepler that have upscaled significantly their ESG analysis and capacities.


SG 07 CC. Climate-issues roles and responsibilities (Private)


SG 08. RI in performance management, reward and/or personal development (Private)


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