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Colonial First State

PRI reporting framework 2020

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You are in Indirect – Manager Selection, Appointment and Monitoring » Selection

Selection

SAM 02. Selection processes (LE and FI)

02.1. Indicate what RI-related information your organisation typically covers in the majority of selection documentation for your external managers

Your organisation’s investment strategy and how ESG objectives relate to it

ESG incorporation requirements

ESG reporting requirements

Other

No RI information covered in the selection documentation

LE
FI - SSA
FI - Corporate (financial)
FI - Corporate (non-financial)
FI - Securitised
Infrastructure
Your organisation’s investment strategy and how ESG objectives relate to it
ESG incorporation requirements
ESG reporting requirements
Other
No RI information covered in the selection documentation

You selected an `Other` option in table SAM 02.1 above, please specify

Our exclusion list.

02.2. Explain how your organisation evaluates the investment manager’s ability to align between your investment strategy and their investment approach

Strategy

Assess the time horizon of the investment manager’s offering vs. your/beneficiaries’ requirements

Assess the quality of investment policy and its references to ESG

Assess the investment approach and how ESG objectives are implemented in the investment process

Review the manager’s firm-level vs. product-level approach to RI

Assess the ESG definitions to be used

Other

None of the above

LE
FI - SSA
FI - Corporate (financial)
FI - Corporate (non-financial)
FI - Securitised
Infrastructure
Assess the time horizon of the investment manager’s offering vs. your/beneficiaries’ requirements
Assess the quality of investment policy and its reference to ESG
Assess the investment approach and how ESG objectives are implemented in the investment process
Review the manager’s firm-level vs. product-level approach to RI
Assess the ESG definitions to be used
Other
None of the above

ESG people/oversight

Assess ESG expertise of investment teams

Review the oversight and responsibilities of ESG implementation

Review how ESG implementation is incentivised

Review the manager’s RI-promotion efforts and engagement with the industry

Other

None of the above

LE
FI - SSA
FI - Corporate (financial)
FI - Corporate (non-financial)
FI - Securitised
Infrastructure
Assess ESG expertise of investment teams
Review the oversight and responsibilities of ESG implementation
Review how is ESG implementation enforced /ensured
Review the manager’s RI-promotion efforts and engagement with the industry
Other
None of the above

Process/portfolio construction/investment valuation

Review the process for ensuring the quality of the ESG data used

Review and agree the use of ESG data in the investment decision making process

Review and agree the impact of ESG analysis on investment decisions

Review and agree ESG objectives (e.g. risk reduction, return seeking, real-world impact)

Review and agree manager’s ESG risk framework

Review and agree ESG risk limits at athe portfolio level (portfolio construction) and other ESG objectives

Review how ESG materiality is evaluated by the manager

Review process for defining and communicating on ESG incidents

Review and agree ESG reporting frequency and detail

Other, specify

None of the above

LE
FI - SSA
FI - Corporate (financial)
FI - Corporate (non-financial)
FI - Securitised
Infrastructure
Review the process for ensuring the quality of the ESG data used
Review and agree the use of ESG data in the investment decision making process
Review and agree the impact of ESG analysis on investment decisions
Review and agree ESG objectives (e.g. risk reduction, return seeking, real-world impact)
Review and agree manager’s ESG risk framework
Review and agree ESG risk limits at athe portfolio level (portfolio construction) and other ESG objectives
Review how ESG materiality is evaluated by the manager
Review process for defining and communicating on ESG incidents
Review and agree ESG reporting frequency and detail
Other, specify
None of the above

If you select any `Other` option(s), specify

For 'strategy' we need to assess the ability of the manager to satisfy our exclusion list.

For 'people' we need to review our consultant's view of the manager for ESG risks.

For 'process' we need the manager to review and agree compliance with our exclusion list.

 

02.3. Indicate the selection process and its ESG/RI components 

          Review manager ESG ratings from external providers as well as our consultant. Discuss ESG integration process in manager research and due diligence meetings

02.4. When selecting external managers does your organisation set any of the following:

ESG performance development targets

ESG score

ESG weight

Real economy influence

Other RI considerations

None of the above

LE
FI - SSA
FI - Corporate (financial)
FI - Corporate (non-financial)
FI - Securitised
Infrastructure
ESG performance development targets
ESG score
ESG weight
Real world economy targets
Other RI considerations
None of the above

You selected an `Other` option in table SAM 02.4 above, please specify

Carbon related metrics

02.5. Describe how the ESG information reviewed and discussed affects the selection decision making process.[OPTIONAL] 

          The ESG information will be reviewed and discussed as part of the short list process with the relevant investment manager. Selected external manager ESG information will be then discussed with the investment team and be presented in the Board paper as part of the overall selection decision making process. 
All other things being equal the manager with the better ESG rating will be preferred.

SAM 03. Evaluating engagement and voting practices in manager selection (listed equity/fixed income)

03.1. Indicate how your organisation typically evaluates the manager’s active ownership practices in the majority of the manager selection process.

Engagement

Review the manager’s engagement policy 1

Review the manager’s engagement process (with examples and outcomes)

Ensure whether engagement outcomes feed back into the investment decision-making process

Other engagement issues in your selection process specify

LE
Review the manager’s engagement policy
Review the manager’s engagement process (with examples and outcomes)
Ensure whether engagement outcomes feed back into the investment decision-making process
Other engagement issues in your selection process specify

If you select `Other` option, specify 

          We currently do not review our managers' engagement policy, but this is something that is forming part of our project to engage an external provider.

(Proxy) voting

Review the manager’s voting policy

Review the manager’s ability to align voting activities with clients’ specific voting policies

Review the manager’s process for informing clients about voting decisions

Ensure whether voting outcomes feed back into the investment decision-making process

Review the number of votes cast as a percentage of ballots/AGMs or holdings and available rationale

Other voting issues in your selection process; specify

LE
Review the manager’s voting policy
Review the manager’s ability to align voting activities with clients’ specific voting policies
Review the manager’s process for informing clients about voting decisions
Ensure whether voting outcomes feed back into the investment decision-making process
Review the number of votes cast as a percentage of ballots/AGMs or holdings and available rationale
Other active ownership voting issues in your selection process; specify

03.2. Describe how you assess if the manager’s engagement approach is effective.

03.3. Describe how you assess if the manager’s voting approach is effective/appropriate

03.4. Additional information [OPTIONAL] 

          We are currently in the process of defining a proxy voting and engagement project to roll out in 2020, due to the scale of our portfolio and the number of external managers / systems in use this is an extensive project
This will enable us to have visibility of votes across managers and across separate issues. Once this is in place we can have more effective conversations with managers around their investment decision making and active ownership. 
Once the demerger from the CBA group is completed there will no longer be an impediment to us voting across our portfolios, should we choose to take this responsibility from our managers. It is envisaged that we would utilise an external provider to do this on our behalf.
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