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BNP Paribas Asset Management

PRI reporting framework 2020

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

実施プロセス

LEI 01. Percentage of each incorporation strategy

01.1. 以下を記載してください。(1)組織でのアクティブ運用上場株式にどのESG組み入れ戦略や組み合わせを使用しているか(2)アクティブ運用している上場株式の戦略または戦略の組み合わせ別内訳

ESG組み入れ戦略 (当てはまるものをすべてお選びください)
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 5%)
95 %
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 5%)
5 %
アクティブ運用している上場株式の合計 197.5%

01.2. 組織が実施しているESG組み入れアプローチ、および、特定のESG組み入れ戦略を選択している場合はその理由を説明してください。

Through our Global Sustainability Strategy (GSS) launched in March 2019, we committed to integrating sustainable investment practices across all our assets. This includes actively managed listed equities .

Underpinning our approach to sustainable investment and working towards a sustainable future are our beliefs that:

1.     We are long-term, forward looking investors

„ As active investors, we are forward looking.  We analyse the past in order to better anticipate future developments; we place greater emphasis on  identifying and helping to promote positive change in the future than rewarding (or punishing) past or current behaviour.

„ We are long-term investors, and are prepared to be patient to achieve better results for our clients, and for the world at large.

2.     Our fiduciary duty is aligned with sustainable investment

„ We believe that our fiduciary duty to our clients includes taking environmental, social and governance risks into consideration in our investment decisions.

„ We have a fiduciary duty to our clients to make informed decisions taking reputational, operational and financial risks into careful consideration.

3.     Stewardship is an opportunity and an obligation

„ Stewardship is an integral, and crucial, part of sustainable investment. As active asset owners, we believe that we should use company engagement, proxy voting and policy advocacy to influence companies and the world for the better.

„ Stewardship, if done correctly, can reduce risk, unlock value and impact the world around us in a positive way through the promotion of improved sustainability practices, disclosure levels and transparency.

„ We believe that engagement is generally more effective than exclusion but divestment can be effective as a last resort.

„ Company disclosure is a fundamental requirement for sound investment decision-making.

„ Collaboration with other long-term investors and stakeholders can help to achieve our common environmental and social aims, particularly when engaging with companies and regulatory bodies.

„ We are also committed to engaging with our clients to promote greater acceptance and implementation of sustainable investing.

4.     ESG integration helps us achieve better risk-adjusted returns 

As mentioned in our sustainable investment philosophy: 

„ Sustainability is a long-term driver of investment risks, and returns (although these risks also manifest in the short-term).

„ Sustainability is imperfectly understood, under-researched and inefficiently priced – different players have different goals, approaches, accesses to information, levels of understanding, integration into investment processes etc. Information and disclosure levels are imperfect, incomplete and inconsistent.

„ We will make better investment decisions, based on a richer and deeper understanding of risks and opportunities, if we systematically and explicitly integrate ESG factors into our investment analysis and investment decision-making.

„ Risk management needs to incorporate ESG risks.

5.     A sustainable economic future relies on sustainable investment practices

„ We can deliver the same or better financial returns in the long term than traditional investments by investing sustainably, while generating positive environmental, social and governance outcomes.

„ The way we invest, and engage with companies and regulators, can help shape the world around us.  Effectively managing ESG risks will help promote greater market stability, and more sustainable long-term growth.

„ A 4°C warmer world will be uninvestable – we need to align our investments and use engagement to support successful implementation of the Paris agreement.

„ We should carefully monitor ESG performance, and try to measure the impact of our investments. 

6.     Walking the talk is critical to achieving excellence

 

Lastly, we believe that walking the talk is critical to achieving excellence:

„ As a sustainable asset manager, we should match or exceed in our corporate practices, and in disclosure, the standards we expect from the entities in which we invest.

„ Fostering a sustainable culture internally drives sustainable investment by our staff. 

 

As part of the GSS, we define five pillars of sustainable investment:

1.     ESG Integration: Our ESG Integration Guidelines and Policy apply to all of our investment processes (and therefore funds, mandates, and thematic funds). However, they are ‘non-applicable’ for index funds and exchange-traded funds (ETFs).

2.     Stewardship: Shareholder-engagement and public policy advocacy activities are undertaken on behalf of all of our assets under management. 

3.     Responsible Business Conduct policies and sector-based exclusions: To date, we have applied these policies to all our funds, but related exclusions are not currently applied to all client mandates. During 2020, this will become the default approach for new mandates, and we will approach existing clients to seek their approval to apply the policy to existing mandates. 

4.     Forward-looking perspective – the ‘3Es’: As set out in Part II of our GSS, we will measure our exposure to key issues across our full assets under management, and undertake related research in support of all investment processes.

5.     ‘Sustainable +’ solutions: these include our Enhanced ESG, thematic and impact investing strategies, enabling investors to allocate to sustainable investment opportunities.

Together, these approaches strengthen the way we invest, including how we generate investment ideas, construct optimal portfolios, control for risk, and use our influence with companies and markets. Further information on each of these components can be found in the GSS.

https://www.bnpparibas-am.com/en/sustainability/as-an-investor/

 

 

 

 

01.3. ESG組み入れ戦略の組み合わせを使用して資産を運用している場合、ESG戦略の組み合わせをどのように使用しているかを簡単に説明してください。 [任意]

 

Screening and ESG integration, guided by our sustainable investment approach and ESG integration Guidelines (as explained in LEI 01.2) are mandatory for all our equity open-ended funds. 100% of investment processes in our ESG Validation scope has been reviewed as of end of December 2019.

Screening, ESG integration and thematic approach: In addition to implementing the four pillar of sustainable investment, our Sustainable + funds go a step further, by implementing more explicit ESG tilts and/or adopting a thematic or impact approach. Thematic funds invest in companies that provide products and services providing concrete solutions to specific environmental and/ or social challenges, seeking to benefit from the future growth anticipated in these areas while contributing capital towards the transition towards a lowcarbon, inclusive economy.

 

 


LEI 02. Type of ESG information used in investment decision

02.1. 組織でESG組み入れ戦略に使用しているESG情報およびこの情報の提供者を記載してください。

ESG情報の種類

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

この情報の提供者を選択してください

          Academics, NGOs, investor initiatives and/or multi-stakeholder initiatives
        

この情報の提供者を選択してください

02.2. ブローカーに対しESG調査結果を提供するよう奨励しているかどうかについて記載してください。

02.3. ブローカーに対しどのように奨励しているかを記載してください。

Historically, BNP Paribas AM was a co-founder of the Enhanced Analytics Initiative, an initiative to financially support the development of SRI brokerage in Europe. The commitment was to dedicate at least 5% of BNP Paribas AM's total brokers' fees to ESG/SRI brokers. Since 2004, this 5% level has always been surpassed.

 

02.4. 補足情報 [任意]


LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. ESGへのエンゲージメントや(委任状による)議決権行使から得られる情報を投資の意思決定に利用できるプロセスが組織にあるかどうかを記載してください。

03.2. 補足情報 [任意]

Engagement with investee companies is a key pillar of our sustainable investment approach. We have been actively engaging with the companies we invest in, encouraging them to adopt best practices and commit to a greater transparency of their strategy to mitigate ESG risk. Engagement with investees is an integral part of our portfolio managers' investment process and follows the guidelines defined in our Stewardship policy.

When engaging with companies, we focus on material ESG areas:

·         Governance and the quality of management are our key priorities when participating in AGMs and voting resolutions.

·         We also pay attention to the '3 Es': Energy transition, Environmental sustainability, Equality and inclusive growth.

·         Finally, beyond excluding the worst offenders, we monitor and engage with companies that face serious controversies related to Human and Labour rights, the Environment and Corruption.

We commit to making the results of engagement available in front office tools per relevant company, as we believe we can leverage on engagement to supplement our qualitative and quantitative ESG data.

We also publish the results of our Proxy voting activity in an annual public report.

 


A) 実施:スクリーニング

LEI 04. Types of screening applied

04.1. 組織内でアクティブ運用している上場株式に適用するスクリーニングの種類を記載し、説明してください。

スクリーニングの種類

スクリーニング実行者

説明

1) All funds ought to comply with our Responsible Business Conduct policy, which:

- Excludes companies in severe breach of the UN Global Compact Principles and OECD Guidelines for Multinational Enterprises (OECD MNEs Guidelines). These are based on the international conventions in the areas of human rights, labour standards, environmental stewardship and anti-corruption. These exclusions can therefore be based on corporate governance practices (e.g. corruption), as well as environmental and social practices and performance (human rights, labour standards, environmental stewardship).

- We have a series of sector policies that set out the conditions for investing in particular sectors, products and activities (e.g. agriculture, palm oil, nuclear).

- We have another set of policies that commit us to exclude particular sectors or activities (tobacco, coal, controversial weapons or asbestos), as we deem them to be in violation of international norms, or to cause unacceptable harm to society and/or the environment, without counterbalancing benefits. These are generally sectors where engagement makes little sense.

 

You can refer to question LEI 04.02 for more details.

2) All SRI labeled funds must also exclude companies active in alcohol, tobacco, gambling, pornography, armament sector (if revenue >10% of the activity).

 

スクリーニング実行者

説明

1) All funds:

Using our proprietary ESG scoring methodology, we avoid investing in a weakly rated entity (lowest decile) without actively engaging particularly on the key issues identified, and we may disinvest from weakly rated entities which do not respond to engagement.

2) Sustainable + funds with a Best-in-Class approach: We do not invest in companies belonging to the three lowest ESG scoring decile.

スクリーニング実行者

説明

Since 2012, we have applied the UN Global Compact Principles as a filter to all our open-ended funds. As a result, we exclude those companies in systematic breach from all open-ended funds across BNPP AM. Through our Responsible Business Conduct (RBC) policy we also exclude companies in breach of the OECD Guidelines for Multinational Enterprises. Compliance officers are in charge of ensuring the exclusion lists are respected by portfolio managers. The exclusion list is programmed into our compliance systems, which can block pre-trade and post-trade activity.

We use the UN Guiding principles on Business and Human Rights when analysing how companies are monitoring social risks, in particular in their supply chains, or how companies are enforcing good practices on business ethics. We use the UN Guiding Principles as an analytical framework not as a screening tool.

 

04.2. スクリーニング基準が変更された場合に顧客や受益者に通知する方法について説明してください。

We are aware that Responsible Business Conduct (RBC) practices impact the value and reputation of entities in which we invest. We expect companies to meet their fundamental obligations in the areas of human and labour rights, protecting the environment and ensuring anti-corruption safeguards, wherever they operate, in line with the UN Global Compact Principles and OECD Guidelines for Multinational Enterprises (OECD MNEs Guidelines). These are shared frameworks, recognised worldwide and applicable to all industry sectors, based on the international conventions in the areas of human rights, labour standards, environmental stewardship and anti-corruption. We aim to engage with companies where they fall short, and exclude the worst offenders.

We have a series of sector policies that set out the conditions for investing in particular sectors, and guide our screening requirements and stewardship activities. These criteria are based on relevant international conventions and regulations (including the supplemented criteria provided by the OECD for sensitive sectors such as responsible agricultural supply chains or conflict minerals), BNP Paribas Group CSR Policies, and voluntary industry standards. In each sector, we highlight mandatory sector RBC requirements which have to be met by issuers in order for BNP Paribas Asset Management to invest. We do this because if the activities in question are not conducted properly, then they could cause serious social or environmental damage (such as palm oil). In addition to the compulsory standards, we have also developed additional criteria that we encourage companies to comply with. The latter provides a good framework for further analysis and dialogue with companies.

We have another set of policies that commit us to exclude particular sectors or activities (tobacco, coal, controversial weapons or asbestos), as we deem them to be in violation of international norms, or to cause unacceptable harm to society and/or the environment, without counterbalancing benefits. These are generally sectors where engagement makes little sense.

Implementation:

We are committed to ensuring the consistent implementation of our Responsible Business Conduct policy to all open-ended funds managed or delegated by BNP Paribas Asset Management entities, but related exclusions are not currently applied to all client mandates. This is now the default approach for new mandates, and we will approach existing clients to seek their approval to apply the policy to existing mandates.

Affiliated entities over which BNP Paribas Asset Management or the BNP Paribas Group do not have operational control are invited to adopt this strategy and implement the components of our Responsible Business Conduct Policy. Where we use affiliates or external investment managers for our open-ended funds, we expect them to incorporate Responsible Business Conduct policies in line with our sustainable investment philosophy.

In applying our Responsible Business Conduct Policy, we take into account specific circumstances as they relate to the environmental, social and governance practices of individual issuers. BNP Paribas Asset Management bases its judgment on data gathered from issuers and third-party research providers, and does its best to gather relevant information. However, it is dependent on the quality, accuracy and timeliness of the information collected.

We strive to implement this Policy in the best interest of our clients and operate at arms' length from the BNP Paribas Group and its subsidiaries or affiliate companies.

Our Responsible Business Conduct Policy is publicly available on BNP Paribas Asset Management's website and is reviewed regularly in order to reflect the evolution of ESG standards and market practices.

 


LEI 05. Processes to ensure screening is based on robust analysis

05.1. スクリーニングが徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを選択してください。

          - Participation of the Portfolio Managers to ESG sector reviews with ESG analysts
- One-to-one interviews with companies by ESG analysts
        

05.2. ESGスクリーニング戦略の一環で包括的なESG調査の対象となるアクティブ上場株式ポートフォリオの割合を示してください。

05.3. 第三者のESG評価がスクリーニング目的で更新される頻度を示してください。

05.4. 組織のESGスクリーニングを構築するための組織内リサーチを精査する頻度を示してください。

05.5. 補足情報 [任意]

We are able to assess ESG issues on both quantitative and qualitative aspects. The qualitative overlay takes into account a forward looking analysis based on the firm-wide strategy and ambition.

The ESG analysis of issuers is carried out by grouping companies into peer groups based on geographic, sectorial and sample size considerations. 

By creating a strong analytical framework around ESG research, the ESG team is able to make an independent judgement on companies' commitments to sustainable development, and assess the extent to which their results are consistent with those commitments.

Our proprietary scoring methodology combines a quantitative scoring methodology, which is currently being enhanced, and a qualitative assessment. It then enables an ESG ranking of issuers. This information is disseminated firm-wide: the results are presented formally to fund managers and financial analysts.

The ESG analyst monitors and follows the sector's ESG evolution and the companies' ESG behaviour throughout the year. When a company faces a relevant change and/or controversy, it will be monitored and a meeting may be set up with the company. Depending on the outcome of the meeting, the analyst may raise or lower the company's score and rating, and may or may not recommend to continue allowing portfolio managers to include it in portfolios.

As explained in section 04.2, Responsible Business Conduct and sector policies exclusions are reviewed quarterly - information from our external provider on UN Global Compact breaches is reviewed internally by our ESG research & Stewardship teams. They are then presented to the Sustainability Committee chaired by our CEO for final approval four times a year.

 


LEI 06. Processes to ensure fund criteria are not breached

06.1. ファンドの基準に違反がないことを確認するために組織が使用しているプロセスを記載してください。

          Updated exclusions and watchlist are sent to investment teams monthly.
        

06.2. ファンドのスクリーニング基準に対する違反が判明した場合、これらの違反を是正するために従うプロセスを説明してください。

Based on the UN Global Compact Principles, our sector policies and Sustainable + products that are Best in Class or thematic, the exclusion list and the buy list are programmed into our Compliance systems, which can block pre-trade and post-trade activity.

In case of a breach, an escalation process is activated, from on-screen alert messages and emails up to informing the CIO. The portfolio manager then has a maximum time frame of one month to sell the position in the best interest of the client.

06.3. 補足情報 [任意]


B) 実施:テーマ

LEI 07. Types of sustainability thematic funds/mandates

07.1. 組織が運用している、サステナビリティをテーマとするファンドやマンデートの種類を記載してください。

07.2. 組織でのサステナビリティをテーマとしたファンドのプロセスについて説明してください。 [任意]

All thematic funds follow a three-step process:

1) Controversies screening

All companies are thoroughly analysed to ensure they have not been involved in controversies due to poor practices. Companies that pass this first screen are compliant with the UN Global Compact, OECD MNEs Guidelines and BNPP AM sector policies.

2) ESG scoring

All companies are evaluated according to an ESG scoring process to assess their performance in terms of their Environmental, Social and Governance practices. In line with our ESG Integration Guidelines, portfolios avoid investing in companies belonging to the bottom ESG decile (10% of the total universe) without actively engaging (or planning to actively engage in the near future) particularly on the key issues identified, and such holdings need to be justified by additional qualitative analysis integrating ESG factors, working closely with the sustainability centre.

3) Contribute towards identified solutions

The environmental and social themes targeted vary depending on the fund, and will be clearly articulated in the fund’s investment philosophy and process documents. This will relate to the activities and business models that are investible for each sustainable strategy, and specify the detail about the activities included. For example, in the context of energy efficiency we may focus on sub-themes, such as: building energy efficiency, industrial and power. For each, we can further specify a list of technologies that are included and the conditions they need to meet. Companies must have coherent activities and a minimum exposure to the identified themes (e.g 20%). The documentation may also cover the potential controversies that may arise in any given sector, and how these may be managed/mitigated.


C) 実施: 統合

LEI 08. Review ESG issues while researching companies/sectors

08.1. E・S・Gの各要因が投資分析の一環として体系的に調査されている、アクティブ運用の上場株式ポートフォリオの割合を記載してください。

ESG問題

影響を受ける割合
E(環境)

E(環境)

S(社会)

S(社会)

コーポレートガバナンス

コーポレートガバナンス

08.2. 補足情報 [任意]

With the implementation of our Global Sustainability Strategy, all our actively managed investment strategies, covering all asset classes and geographies, now include the integration of material E, S and G criteria in their process. Our ESG integration process has been overseen by an ESG Validation Committee and is guided by formal ESG Integration Guidelines, including KPIs ensuring our portfolios display favourable ESG characteristics.

 


LEI 09. Processes to ensure integration is based on robust analysis

09.1. ESG統合が徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを記載してください。

09.2. 組織の統合戦略の一環で包括的ESG調査の対象になるアクティブ運用上場株式の割合を記載してください。

09.3. ESG統合戦略に使われる第三者のESG評価が更新される頻度を示してください。

09.4. ESG統合戦略に使われる組織内調査を見直す頻度を示してください。

09.5. ポートフォリオ・マネージャーがどのようにしてESG情報を保有し、使っているのか説明してください。

09.6. 補足情報 [任意]

In 2016, we developed an IT solution to store our ESG research and companies' ESG profiles. ESG scores are available in Aladdin, the firm’s front to back solution.

In 2018 and 2019, we appointed ESG champions within each investment team to help promote ESG integration within each investment team and to liaise with the Sustainability Centre. Trainings sessions are organised centrally, both for the ESG Champions as well as across investment teams, as we work to enhance the firm's overall capabilities on sustainability issues. 

 

 


LEI 10. Aspects of analysis ESG information is integrated into

この指標には新しい設問が追加されています。事前に入力されている回答を精査してください。

10.1. 投資分析のどの側面にESG情報を統合しているかを記載してください。

アクティブ運用する上場株式の内投資分析をする割合

アクティブ運用する上場株式の内投資分析をする割合

アクティブ運用する上場株式の内投資分析をする割合

アクティブ運用する上場株式の内投資分析をする割合

アクティブ運用する上場株式の内投資分析をする割合

10.3. ESG情報をポートフォリオの加重にどう統合しているかを説明してください。

Sustainable + funds with a Best-In-Class approach cannot invest in companies with a negative recommendation (corresponding to decile 8, 9 and 10), have a weight constraint on companies with neutral recommendation (corresponding to decile 4, 5, 6 and 7) and can be overweight on companies with positive recommendation (corresponding to decile 1, 2 and 3). This weight constraint has been put in place to guide these funds towards best-in-class companies.

Moreover, our full range of investment strategies now adopts a sustainable investment approach, involving the systematic integration of E, S and G considerations into investment processes. Our ESG integration process is guided by formal ESG Integration Guidelines, including KPIs ensuring our portfolios display better ESG characteristics, including targeting a higher weighted average ESG score and a lower carbon intensity than their benchmarks. These KPIs entail the overweight of holdings with a better than average ESG score and a lower carbon footprint.

 

10.6. 補足情報 [任意]


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