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Glenmede

PRI reporting framework 2020

You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories (Private)


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          ESG survey sent to investment managers
        
Conducted by
Asset class
Scope and process

We asked all ESG-mandated  public market fund managers on our platform to fill out an RFI, updating their positive and negative screening strategies employed to capture any new strategies as well as changes in definitions (e.g., increasing the threshold at which a company is screened out). We ask all of our fund managers to populate an RFI, identifying if they use ESG integration. Should they select 'yes,' a more detailed survey on their ESG integration capabilities opens up for their input.

Outcomes

All ESG-mandated fund managers responded, across 20 equity and fixed income strategies, feeding directly into a resource used by Relationship Managers in guiding a client through portfolio construction. The RFI is in its initial phase of use with the goal to be a clear categorization of how all external and proprietary strategies are integrating ESG and offering clear documentation of how fund managers are addressing and incorporating ESG risks and opportunities into their investment approaches.

Topic or issue
          Role of ESG in credit analysis
        
Conducted by
Asset class
Scope and process

As ESG criteria becomes increasingly important in credit analysis, the Sustainable and Impact Investing team has started to regularly consult with our Fixed Income team as we continue to build out our Fixed Income products. For example, staff from our municipal bond team participated in the diligence process for an ESG muni bond search and provided input during the Investment Committee introduction and approval process. In another example, our Fixed Income team is also engaged in reading the latest ESG credit reports and conducting their own original research on the financial performance of products that incorporate ESG issues into their investment analysis and decision-making processes.

Outcomes

As ESG criteria becomes increasingly important in credit analysis, the Sustainable and Impact Investing team has started to regularly consult with our Fixed Income team as we continue to build out our Fixed Income products. For example, the Fixed Income team is actively engaged in exploring and designing how an ESG integration framework would apply to our proprietary fixed income products.
Our Fixed Income team is actively developing their own team's expertise on the role of ESG in credit risk and analysis and working to expand thought leadership through publication of original research.

Topic or issue
          Corporate governance of a fund manager's holding
        
Conducted by
Asset class
Scope and process

Conducted in-depth analysis of a fund manager's decision to maintain a hold on a security, despite negative headlines around the company's corporate governance framework

Outcomes

Fund manager agreed to share in-depth detail of their investment process and decision-making criteria around how they weigh E, S, and G criteria. In this specific example, the fund manager worked to justify why the environmental criteria associated with a certain holding outweighed its status as a laggard in corporate governance. Ultimately, the fund manager illustrated a consistent framework through which they balance business considerations with governance considerations, noting the strength of the company in managing short term risk, operational efficiency, and product safety. The fund manager also agreed to closely monitor this specific governance incident and provide updates to Glenmede on a future quarterly call.

09.2. Additional information.


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