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Vancity Investment Management

PRI reporting framework 2020

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

(C) Implementation: Integration

FI 10. Integration overview

10.1. Describe your approach to integrating ESG into traditional financial analysis.

Before investing, VCIM develops a complete picture of issuer-specific strengths, weaknesses, opportunities or threats by evaluating policies, performance and practices regarding the environment, social responsibility and corporate governance. This thorough ESG review is combined with rigorous financial analysis to determine whether the issuer's securities are appropriate for the funds managed on behalf of investors. The ESG Team and Financial Team work in the same physical environment  and participate in the decision-making process for selecting equities and fixed income.  Through active discussions of the analytical findings, portfolio needs and materiality of risks we integrate ESG and financial information to make a determination of eligibility.

10.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

SSA

We use a combination of positive and negative screening to choose companies for portfolios we manage. Our ESG evaluation includes an analysis of revenue from products or processes that we have determined are unsustainable: tobacco, nuclear power, military armaments, adult entertainment and gaming. We evaluate the company for strengths or weaknesses according to 26 indicators, under the seven criteria: corporate governance, environmental performance and policy, diversity, community relations, labour relations, human rights and exposure socially or environmentally beneficial products or services. Companies that are found to have significant weaknesses in aggregate are deemed ineligible for investment   

Corporate (financial)

We use a combination of positive and negative screening to choose companies for portfolios we manage. Our ESG evaluation includes an analysis of revenue from products or processes that we have determined are unsustainable: tobacco, nuclear power, military armaments, adult entertainment and gaming. We evaluate the company for strengths or weaknesses according to 26 indicators, under the seven criteria: corporate governance, environmental performance and policy, diversity, community relations, labour relations, human rights and exposure socially or environmentally beneficial products or services. Companies that are found to have significant weaknesses in aggregate are deemed ineligible for investment                                         

 

 

Corporate (non-financial)

We use a combination of positive and negative screening to choose companies for portfolios we manage. Our ESG evaluation includes an analysis of revenue from products or processes that we have determined are unsustainable: tobacco, nuclear power, military armaments, adult entertainment and gaming. We evaluate the company for strengths or weaknesses according to 26 indicators, under the seven criteria: corporate governance, environmental performance and policy, diversity, community relations, labour relations, human rights and exposure socially or environmentally beneficial products or services. Companies that are found to have significant weaknesses in aggregate are deemed ineligible for investment

10.3. Additional information [OPTIONAL]


FI 11. Integration - ESG information in investment processes

11.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
ESG analysis is integrated into fundamental analysis
ESG analysis is used to adjust the internal credit assessments of issuers.
ESG analysis is used to adjust forecasted financials and future cash flow estimates.
ESG analysis impacts the ranking of an issuer relative to a chosen peer group.
An issuer`s ESG bond spreads and its relative value versus its sector peers are analysed to find out if all risks are priced in.
The impact of ESG analysis on bonds of an issuer with different durations/maturities are analysed.
Sensitivity analysis and scenario analysis are applied to valuation models to compare the difference between base-case and ESG-integrated security valuation.
ESG analysis is integrated into portfolio weighting decisions.
Companies, sectors, countries and currency and monitored for changes in ESG exposure and for breaches of risk limits.
The ESG profile of portfolios is examined for securities with high ESG risks and assessed relative to the ESG profile of a benchmark.
Other, specify in Additional Information

11.2. Additional information [OPTIONAL]


FI 12. Integration - E,S and G issues reviewed

12.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
SSA

Environmental

Social

Governance

Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

12.2. Please provide more detail on how you review E, S and/or G factors in your integration process.

SSA

We use a combination of positive and negative screening to choose companies for portfolios we manage. Our ESG evaluation includes an analysis of revenue from products or processes that we have determined are unsustainable: tobacco, nuclear power, military armaments, adult entertainment and gaming. We evaluate the company for strengths or weaknesses according to 25 indicators, under the seven criteria: corporate governance, environmental performance and policy, diversity, community relations, labour relations, human rights and exposure socially or environmentally beneficial products or services. Companies that are found to have significant weaknesses in aggregate are deemed ineligible for investment

Corporate (financial)

We use a combination of positive and negative screening to choose companies for portfolios we manage. Our ESG evaluation includes an analysis of revenue from products or processes that we have determined are unsustainable: tobacco, nuclear power, military armaments, adult entertainment and gaming. We evaluate the company for strengths or weaknesses according to 25 indicators, under the seven criteria: corporate governance, environmental performance and policy, diversity, community relations, labour relations, human rights and exposure socially or environmentally beneficial products or services. Companies that are found to have significant weaknesses in aggregate are deemed ineligible for investment

Corporate (non-financial)

We use a combination of positive and negative screening to choose companies for portfolios we manage. Our ESG evaluation includes an analysis of revenue from products or processes that we have determined are unsustainable: tobacco, nuclear power, military armaments, adult entertainment and gaming. We evaluate the company for strengths or weaknesses according to 25 indicators, under the seven criteria: corporate governance, environmental performance and policy, diversity, community relations, labour relations, human rights and exposure socially or environmentally beneficial products or services. Companies that are found to have significant weaknesses in aggregate are deemed ineligible for investment

12.3. Additional information.[OPTIONAL]

Before investing, VCIM develops a complete picture of issuer-specific strengths, weaknesses, opportunities or threats by evaluating policies, performance and practices regarding the environment, social responsibility and corporate governance. This thorough ESG review is combined with rigorous financial analysis to determine whether the issuer's securities are appropriate for the funds managed on behalf of investors. The ESG Team and Financial Team work in the same physical environment  and participate in the decision-making process for selecting equities and fixed income.  Through active discussions of the analytical findings, portfolio needs and materiality of risks we integrate ESG and financial information to make a determination of eligibility.

We conduct on-going monitoring of the portfolio holdings and, when new information becomes available we integrate it into our investment process and make a determination as whether or not the ESG risk is material. We then determine if engagement or divestment is required.


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