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Cardano Risk Management

PRI reporting framework 2020

You are in Strategy and Governance » Asset class implementation not reported in other modules

Asset class implementation not reported in other modules

SG 16. ESG issues for internally managed assets not reported in framework

Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Listed equities – ESG incorporation

Listed equities form a very small part of our internally managed portfolio.  The majority of our equity exposure is achieved through derivatives where we are monitoring liquidity in "ESG-friendly" indices.

Cash

Cash balances are either invested in externally managed cash funds or held with a custodian.  We do not currently review custodians from an ESG perspective.  

Other (1) [as defined in Organisational Overview module]

There are two ways that we can consider ESG with regards to derivatives:

  • Consider the underlying exposure - currently we are aiming to gain cheap, liquid broad market exposure through the use of derivatives.  Therefore, we do not tailor the underlying indices to reflect ESG views given the poor liquidity in these derivatives markets.  However, we are monitoring this closely and if there is the opportunity to implement this in the future at reasonable cost we will consider inclusion in the portfolio
  • Counterparty - we are developing our approach to rating trading counterparties on ESG (see SG18) and how this impacts who we trade with 

 

16.2. Additional information [Optional].


SG 17. ESG issues for externally managed assets not reported in framework

17.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Commodities

Please see above and refer to the SAM module for a more extensive description of our ESG framework.  Our approach to rating and engaging with external managers of commodities on ESG is driven by whether we determine the strategy to be high focus or low focus (i.e. it depends on the financial materiality of the ESG risks) rather than the asset class specifically.

Hedge funds - DDQ

Select whether you use the PRI Hedge Fund DDQ

Hedge funds

Please see below and refer to the SAM module for a more extensive description of our ESG framework

Other (1) [as defined in Organisational Overview module]

These are derivatives mandates and therefore are deemed to be low focus.  However, we would require the manager to have a Responsible Investment Policy in place and report on their RI activities where appropriate.

17.2. Additional information.

We have developed and continue to refine our own ESG Questionnaires. These include some tailoring for different strategy types that could fall within the broader categorisation of 'Hedge Fund'


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