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Robeco

PRI reporting framework 2020

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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

Robeco's Exclusion Policy is based on the following negative and norms based screening:

Negative screening:

  • Controversial weapons
  • Tobacco
  • Controversial countries

Norms based screening

  • Controversial behavior: Robeco acts in accordance with the United Nations Global Compact (UNGC) to assess the behavior of listed companies. An enhanced engagement process is applied with listed companies that are severly breaching the UNGC principles. If this enhanced engagement, which may last up to a three year period, does not lead to the desired change, Robeco can decide to exclude the listed company from its investment universe.

Robeco’s exclusion policy and exclusion list are available on our website:

https://www.robeco.com/docm/docu-exclusion-policy-and-list.pdf

04.3. Additional information. [Optional]

Positive screening:

In collaboration with RobecoSAM, we have developed a proprietary methodology using a three step approach to assess a company’s alignment with the SDGs. The methodology has been formalized in the SDG Guidebook. The three steps in the SDG Guidebook comprise the products or services the company provides, how the company operates to produce these products or services, and if any controversies are known.

Furthermore Robeco uses screening to identify thematic engagement opportunities on ESG issues and to pick engagement and investment themes, and select companies. The identification and prioritization of themes and candidates for engagement involve rigorous research and analysis to determine the relevance of a particular theme, the sectors and companies being mostly impacted by that theme, and the performance of companies in that respect. Our screening process is backed by proprietary research as well as external analyses provided by specialized parties.


FI 05. Examples of ESG factors in screening process

05.1. Provide examples of how ESG factors are included in your screening criteria.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Negative screening: we exclude controversial weapons, such as cluster munition.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

We exclude companies based on behaviour that is not compatible with the UN Global Compact.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

In collaboration with RobecoSAM, we have developed a proprietary methodology using a three step approach, to assess a company’s alignment with the SDGs. The methodology has been formalized in the SDG Guidebook. The three steps in the SDG Guidebook comprise the products or services the company provides, how the company operates to produce these products or services, and if any controversies are known.

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Our country sustainability ranking is used in our sustainable government bond portfolios to select securities

Type of fixed income

ESG factors

Screening

Description of how ESG factors are used as the screening criteria

Robeco deems investing in government bonds (federal or local) of countries where serious violations of human rights or a collapse of the governance structure take place as unsustainable. In addition, Robeco will follow applicable sanctions of the UN, EU or US to which it is subject and follows any mandatory (investment) restrictions deriving therefrom. To identify these countries we use data from: 1. World Bank: World Governance Index (WGI) on Political Stability and Absence of Violence/ Terrorism. 2. Freedom House: Freedom in the World (FIW) index on Political rights and civil liberties. 3. Fund for Peace: Fragile States Index (FSI). 4. International sanctions. 

05.2. Additional information.


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
Positive/best-in-class screening
Norms-based screening

06.2. Additional information. [Optional]

The exclusion policy is monitored and coded by Investment Restrictions.

Positive screening:

Monthly (on the first business day of every month), the Fixed Income Portfolio Information (hereafter FI PIM) team extracts the most recent SDG scores as input for the FI PIM screening tool from the RobecoSAM database where the SDG scores are being stored. Secondly, the FI PIM team extracts from the most recent coverage list of the Robeco Credit Analyst team the tickers of all issuers currently under coverage, the Bloomberg (BB) Global ID and their respective score from the Robeco Credit Analyst team. This is to ensure control over the ultimate eligible universe only consisting of names that are under actual coverage of the Robeco Credit Analyst team in Rotterdam (as the Investment Team from Rotterdam is ultimately responsible for the investment decisions of the above mentioned funds). The coverage list is of key importance and contains separately monitored key controls.

The screening tool is fed with the following data:

  • Most recent SDG scores
  • Most recent coverage list from the Robeco Credit Analyst team composed of covered tickers and individual identifiers labelled as “green bonds” (with their own scores)
  • Most recent Enhanced Exclusion list constituents

The ultimate eligible ticker list is sent to the COO Data Management team and the Compliance Restrictions monitoring team. The COO Data Management team safeguards that no ineligible ticker can be invested without a pre-trade alert. The compliance team permanently coded the restrictions as such that any ticker not being eligible will be flagged and results into a pre-trade compliance alert that needs to be addressed by the pre-trade restriction team and the portfolio manager responsible for the respective fund. In addition, the eligible ticker and green bond ISIN enables the daily Compliance post-trade check, ensuring the portfolios being monitored are compliant on an ongoing basis.

To safeguard a sound backup, continuous operation and present detailed operational knowledge in case of ad-hoc client/prospect and portfolio manager questions, FI PIM safeguards sound knowledge sharing within their team and that at least two people evaluate the changes and investable universe list together.


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