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Nexxus

PRI reporting framework 2020

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (A) Implementation: Screening

(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

During the pre-financing phase we apply a negative screening to potential borrowers prior to analize a financing transaction and we rule out financing companies that participate in sectors or activities that are contrary to our principles (and our investors') and involve high reputational risk.

04.3. Additional information. [Optional]

We rule out financing companies that participate in any of the following businesses or activities:

  • Illegal economic activities: production, marketing or other activity, which is illegal under the laws or regulations of the jurisdiction of origin;
  • Tobacco and distilled alcoholic beverages - the production and trade of tobacco and distilled alcoholic beverages and related products;
  • Production and trade of weapons and ammunition: the financing of the production and trade of weapons and ammunition of any kind, including chemical weapons and the mining, processing and/or sale of uranium for weapons purposes
  • Casinos: the financing of casinos and equivalent undertakings.
  • Restrictions in the information technology sector: research, development or technical applications related to electronic data programs or solutions specifically aimed at internet gambling and online casinos.
  • Life sciences sector: where support is given to the funding of research, development or technical applications related to; (i) human cloning for research or therapeutic purposes; or (ii) genetically modified organisms (GMOs)
  • Dams that do not comply with the World Commission on Dams (WCD Framework).
  • Mining or trade in rough diamonds not certified by the Kimberley Process.
  • Artisanal mining (mining using rustic tools usually unregulated).
  • Manufacture, storage and transport of Persistent Organic Pollutants (as defined in the Stockholm Convention) and of certain hazardous industrial chemicals and pesticides (as defined in the Rotterdam Convention).
  • Nuclear energy-related activities that do not meet the standards outlined by the International Atomic Energy Agency.
  • Illegal logging and subsequent marketing of timber and related forest products.
  • Energy sector activities or projects within or adjacent to UNESCO World Heritage sites.

 


FI 05. Examples of ESG factors in screening process

05.1. Provide examples of how ESG factors are included in your screening criteria.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

During the pre-financing phase we apply a negative screening to potential borrowers prior to analyse a financing transaction and we rule out financing companies that participate in sectors or activities that are contrary to our principles (and our investors') and involve high reputational risk.

As a result, we do not have companies in the portfolio that participate in any of the following businesses or activities:

  • Illegal economic activities: production, marketing or other activity, which is illegal under the laws or regulations of the jurisdiction of origin;
  • Tobacco and distilled alcoholic beverages - the production and trade of tobacco and distilled alcoholic beverages and related products;
  • Production and trade of weapons and ammunition: the financing of the production and trade of weapons and ammunition of any kind, including chemical weapons and the mining, processing and/or sale of uranium for weapons purposes
  • Casinos: the financing of casinos and equivalent undertakings.
  • Restrictions in the information technology sector: research, development or technical applications related to electronic data programs or solutions specifically aimed at internet gambling and online casinos.
  • Life sciences sector: where support is given to the funding of research, development or technical applications related to; (i) human cloning for research or therapeutic purposes; or (ii) genetically modified organisms (GMOs)
  • Dams that do not comply with the World Commission on Dams (WCD Framework).
  • Mining or trade in rough diamonds not certified by the Kimberley Process.
  • Artisanal mining (mining using rustic tools usually unregulated).
  • Manufacture, storage and transport of Persistent Organic Pollutants (as defined in the Stockholm Convention) and of certain hazardous industrial chemicals and pesticides (as defined in the Rotterdam Convention).
  • Nuclear energy-related activities that do not meet the standards outlined by the International Atomic Energy Agency.
  • Illegal logging and subsequent marketing of timber and related forest products.
  • Energy sector activities or projects within or adjacent to UNESCO World Heritage sites.

 

05.2. Additional information.


FI 06. Screening - ensuring criteria are met

06.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening

06.2. Additional information. [Optional]

As responsible investors in our day-to-day, we integrate ESG factors in each of the phases of our financing process and emphasize two phases:

- perform an ESG Due Diligence to ensure that the Borrower meets our screening criteria and

- undertake a yearly Portfolio Review based on the ESG information provided by the Borrower to ascertain that it continues to meet our screening criteria throughout the life of the mezzanine loan.


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