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Colonial First State

PRI reporting framework 2020

You are in Organisational Overview » Asset class implementation gateway indicators

Asset class implementation gateway indicators

OO 10. Active ownership practices for listed assets

10.1. Select the active ownership activities your organisation implemented in the reporting year.

Listed equity – engagement

Listed equity – voting

Fixed income SSA – engagement

Please explain why you do not engage directly and do not require external managers to engage with companies on ESG factors.

          We require our managers to have considered ESG risks before making their investment. The credit managers all have ESG overlay of some type, using either internal or external providers. The ESG teams will have differing levels of engagement with the issuers.
We are investigating the possibility of employing an external provider to engage on our behalf.
During the calendar year 2019, CFSIL began the process of identifying suitable third parties for the purposes of proxy voting and engagement. The initial focus is to have a consolidated report for CFSIL on equity voting across all managers. Further, we will review the process of engagement with the investee companies (across equity and fixed income),as we believe this is part of us being an active owner.
We are currently participating in the PRI collaboration to engage with index providers in order to encourage them to exclude controversial weapons from their indices.
        

Fixed income Corporate (financial) – engagement

Please explain why you do not engage directly and do not require external managers to engage with companies on ESG factors.

          We require our managers to have considered ESG risks before making their investment. The credit managers all have ESG overlay of some type, using either internal or external providers. The ESG teams will have differing levels of engagement with the issuers. 
We are investigating the possibility of employing an external provider to engage on our behalf.
During the calendar year 2019, CFSIL began the process of identifying suitable third parties for the purposes of proxy voting and engagement. The initial focus is to have a consolidated report for CFSIL on equity voting across all managers. Further, we will review the process of engagement with the investee companies (across equity and fixed income),as we believe this is part of us being an active owner.
We are currently participating in the PRI collaboration to engage with index providers in order to encourage them to exclude controversial weapons from their indices.
        

Fixed income Corporate (non-financial) – engagement

Please explain why you do not engage directly and do not require external managers to engage with companies on ESG factors.

          We require our managers to have considered ESG risks before making their investment. The credit managers all have ESG overlay of some type, using either internal or external providers. The ESG teams will have differing levels of engagement with the issuers. 
We are investigating the possibility of employing an external provider to engage on our behalf.
During the calendar year 2019, CFSIL began the process of identifying suitable third parties for the purposes of proxy voting and engagement. The initial focus is to have a consolidated report for CFSIL on equity voting across all managers. Further, we will review the process of engagement with the investee companies (across equity and fixed income), as we believe this is part of us being an active owner.
We are currently participating in the PRI collaboration to engage with index providers in order to encourage them to exclude controversial weapons from their indices.
        

Fixed income Corporate (securitised) – engagement

Please explain why you do not engage directly and do not require external managers to engage with companies on ESG factors.

          We require our managers to have considered ESG risks before making their investment. The credit managers all have ESG overlay of some type, using either internal or external providers. The ESG teams will have differing levels of engagement with the issuers. 
We are investigating the possibility of employing an external provider to engage on our behalf.
During the calendar year 2019, CFSIL began the process of identifying suitable third parties for the purposes of proxy voting and engagement. The initial focus is to have a consolidated report for CFSIL on equity voting across all managers. Further, we will review the process of engagement with the investee companies (across equity and fixed income), as we believe this is part of us being an active owner.
We are currently participating in the PRI collaboration to engage with index providers in order to encourage them to exclude controversial weapons from their indices.
        

OO 11. ESG incorporation practices for all assets

Select the externally managed assets classes in which you and/or your investment consultants address ESG incorporation in your external manager selection, appointment and/or monitoring processes.
Asset class
ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes
Listed equity

Listed equity - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Fixed income - SSA

Fixed income - SSA - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Fixed income - corporate (financial)

Fixed income - corporate (financial) - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Fixed income - corporate (non-financial)

Fixed income - corporate (non-financial) - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Fixed income - securitised

Fixed income - securitised - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Infrastructure

Infrastructure - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Fund of hedge funds

Fund of hedge funds - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Cash

Cash - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Other (1)

Other (1) - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

11.3b. If your organisation does not integrate ESG factors into investment decisions on your externally managed assets, explain why not.

Within alternatives we incorporate ESG factors in our review of long short equity managers and Multi strategy credit managers. We have not incorporated the process in Macro strategies due to the extensive use of derivatives.

Within Cash and Bank Deposits we do not incorporate ESG factors into investment decisions.

11.4. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

Our ESG and Climate Risk Management policy requires that a manager's ESG integration, voting and engagement process is considered as part of the manager selection and monitoring processes for all assets.

During the year, we changed our process to conduct ESG and climate risk analysis on managers much earlier in the selection process. It is now conducted on the shortlist of new managers. This allows for a more informed strategic allocation of funds and portfolio construction within asset classes with respect to ESG and climate risks of manager strategies.

Equity managers are required to report on their voting as part of their appointment process, and we plan to extend this to engagement and climate risk reporting.

We do not make separate allocations to FI - Corporate (Financials) and FI - Corporate (Non Financials), and see this as one allocation FI-Corporate.

 


OO 12. Modules and sections required to complete

12.1. Below are all applicable modules or sections you may report on. Those which are mandatory to report (asset classes representing 10% or more of your AUM) are already ticked and read-only. Those which are voluntary to report on can be opted into by ticking the box.

Core modules

RI implementation via external managers

Indirect - Selection, Appointment and Monitoring of External Managers

Closing module

12.2. Additional information. [Optional]

The process for Fixed income - SSA, Corporate (financial), Corporate (non-financial) and Securitised is the same so the same process applies across all 4 FI categories. 


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