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Avanda 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.

In traditional analysis we already include evaluation of issuers' corporate governance. Now we incorporate ESG ratings from service providers as an additional screening criteria. 

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

SSA

We apply our screening criteria first.

No external ESG ratings are used but we evaluate the governance of the countries' governments. 

Corporate (financial)

We apply our screening criteria first.

Then external ESG ratings are used, complemented by internal research. 

Corporate (non-financial)

We apply our screening criteria first. 

Then external ESG ratings are used, complemented by internal research. 

10.3. Additional information [OPTIONAL]

ESG scores from various databases are generally integrated into our financial analysis. 


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 incorporate all ESG factors in our integration process for SSAs.

Corporate (financial)

We incorporate all ESG factors in our integration process for Corporates.

Through our research we have noticed that some companies we cover may receive lower a ESG rating in a particular year even when they have put in greater efforts on the ESG front than in the previous year. We have been informed that some of these ratings are relative to other companies in the respective sector or country, and we do take that into consideration when looking at their ESG efforts.

Corporate (non-financial)

We incorporate all ESG factors in our integration process for Corporates.

Through our research we have noticed that some companies we cover may receive lower a ESG rating in a particular year even when they have put in greater efforts on the ESG front than in the previous year. We have been informed that some of these ratings are relative to other companies in the respective sector or country, and we do take that into consideration when looking at their ESG efforts.

12.3. Additional information.[OPTIONAL]


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