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Optimum Asset Management Inc

PRI reporting framework 2020

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

(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

We have retained the services of Groupe Investissement Responsable (GIR) to provide an ESG rating for corporate issuers on the basis of four scores: environmental, social, governance and overall ESG. The weightings and justifications are detailed. The scores range from 0 to 10, with 10 being the highest score. The weighting of environmental, social and governance factors is defined by the issuer's sector of activity. For example, the environmental weighting, at 45%, is greater in the energy sector, whereas the social weighting, at 50%, is greater in the health care sector. We compare ratings of our portfolios with their benchmarks.

Our policy includes the following exclusions:

Coal: Companies that derive more than 25% of their income from coal-fired power plants. In addition, the Company must have demonstrated that in recent years it has reduced its Greenhouse Gas (GHG) emissions and plans to continue in this direction.

Tobacco: Businesses that derive more than 10% of their revenues from the manufacture of tobacco products.

Weapons: Any company involved in the manufacture and sale of anti-personnel mines, cluster munitions and biological or chemical weapons that contravenes the rules of International Humanitarian Law (IHL). Our ESG Committee reviews the prohibited and watch-list securities.

04.3. Additional information. [Optional]

Optimum Asset Management is of the view that responsible investment leads to better long-term results, which is in line with our investment values and philosophy. Our managers seek companies with long-term profitability and as a result, they manage financial and non-financial risks proactively. The intention is to make a constructive contribution to the success, sound governance and reputational risk management of companies with the view of optimizing their financial performance and the preservation of investors' capital.

Optimum Asset Management wants the companies which it invests in for its clients to behave as good corporate citizens in the environments where they operate, namely to act responsibly and to take part in the economic and social life of their communities.

Optimum Asset Management (OAM) has a formal internal policy concerning ESG factors, namely its Responsible Investment Policy. The policy has an impact on internally managed strategies.

Our ESG Committee, chaired by the Chief Investment Officer, Fixed Income, meets on a regular basis to review our practices and to conduct an internal analysis of securities rated below 3 by GIR. This internal committee is also responsible for drawing up a list of prohibited securities and watch-list securities. As already stated, the OAM investment teams exclude certain securities.


FI 05. Examples of ESG factors in screening process (Not Completed)


FI 06. Screening - ensuring criteria are met

06.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening

other description

          Watchlist and prohibited issuers list.
        
Positive/best-in-class screening

other description

          Front-office system integrates ESG ratings
        

06.2. Additional information. [Optional]


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