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Ninety One

PRI reporting framework 2020

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Fixed income - Engagement

FI 14. Engagement overview and coverage

14.1. Indicate the proportion of your fixed income assets on which you engage. Please exclude any engagements carried out solely in your capacity as a shareholder.

Category
Proportion of assets
SSA

14.2. Indicate your motivations for conducting engagement (SSA fixed income assets).

Corporate (financial)

14.2. Indicate your motivations for conducting engagement (Corporate, Financial fixed income assets)

Corporate (non-financial)

14.2. Indicate your motivations for conducting engagement (Corporate, non-financial fixed income assets)

14.3. Additional information.[OPTIONAL]

SSA

Our approach to engagement on a sovereign level is to directly discuss difficult issues with government and central bank officials. During these discussions, our portfolio managers will voice their concerns or opinions directly to people who have the capacity to make meaningful changes, with their savings and we need to do the proper due diligence to ensure that we are lending to governments who have and will continue to govern in a responsible, credible, transparent and market-friendly manner. We do not have an explicit environmental or social policy in this regard, although our overall approach and principles are embedded in our attached stewardship statement, principles and approach.

Apart from the direct discussions with policy and lawmakers, our investment process offers another layer of thorough due diligence. We view investing in emerging market government debt as supporting the development of the countries we invest in. The development of a local currency bond market (in which we have been a pioneer investor) is a very positive development for a country; it underpins economic growth through the development of the financial market. More specifically an investable, liquid local bond yield particularly in relation to controversial weapons or governance issues and unsustainable environmental practices. This is an extremely fortunate position to have and we do not take it lightly. Investors entrust us curve allows companies to borrow at less onerous rates for longer terms directly from the market (as opposed to short-dated cash borrowing from banks). Banks can offer long-term mortgage products and hedge their risk whilst people get to own homes. Lastly, insurers can offer longer term annuity/life products that wouldn't be available otherwise.

Corporate

We look to promote ESG principles through our engagement process. Our approach to engagement with corporate issuers includes requesting information to understand company policies and activities. We ask for improved disclosure share insights and concerns with management to help them understand why we will not invest/disinvest if they have material weaknesses that they are not addressing. The point of our engagement is to improve a company’s overall credit quality and structural resilience which in turn will directly determine the discount factor or cost of debt. We also work with market participants and global organisations to progress ESG adoption across the companies we invest in and improve visibility of ESG across the financial industry, working with index providers, charities and specialist agencies..

Finally in addition to engagement with companies, we also engage with government officials and regulators. Our emerging market sovereign team has its own program of engagement with government officials and regulators, which have partnered with the efforts of the EM corporate team

 


FI 15. Engagement method

New selection options have been added to this indicator. Please review your prefilled responses carefully.

15.1. Indicate how you typically engage with issuers as a fixed income investor, or as both a fixed income and listed equity investor. (Please do not include engagements where you are both a bondholder and shareholder but engage as a listed equity investor only.)

Select all that apply
Type of engagement
SSA
Corporate (financial)
Corporate (non-financial)
Individual/Internal staff engagements
Collaborative engagements
Service provider engagements

15.2. Indicate how your organisation prioritises engagements with issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Size of holdings
Credit quality of the issuer
Duration of holdings
Quality of transparency on ESG
Specific markets and/or sectors
Specific ESG themes
Issuers in the lowest ranks of ESG benchmarks
Issuers in the highest ranks of ESG benchmarks
Specific issues considered priorities for the investor based on input from clients and beneficiaries
Other

15.3. Indicate when your organisation conducts engagements with issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
We engage pre-investment.
We engage post-investment.
We engage proactively in anticipation of specific ESG risks and/or opportunities.
We engage in reaction to ESG issues that have already affected the issuer.
We engage prior to ESG-related divestments.
Other, describe

If ‘other’ has been selected, please give a description

On country visits

15.4. Indicate what your organisation conducts engagements with issuers on.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
We engage on ESG risks and opportunities affecting a specific bond issuer or its issuer.
We engage on ESG risks and opportunities affecting the entire industry or region that the issuer belongs to.
We engage on specific ESG themes across issuers and industries (e.g., human rights).
Other, describe

15.5. Indicate how your organisation ensures that information and insights collected through engagement can feed into the investment decision-making process.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Ensuring regular cross-team meetings and presentations.
Sharing engagement data across platforms that is accessible to ESG and investment teams.
Encouraging ESG and investment teams to join engagement meetings and roadshows.
Delegating some engagement dialogue to portfolio managers/credit analysts.
Involving portfolio managers when defining an engagement programme and developing engagement decisions.
Establishing mechanisms to rebalance portfolio holdings based on levels of interaction and outcomes of engagements.
Considering active ownership as a mechanism to assess potential future investments.
Other, describe
We do not ensure that information and insights collected through engagement can feed into the investment decision-making process.

15.6. Additional information.[OPTIONAL]


FI 16. Engagement policy disclosure

16.1. Indicate if your publicly available policy documents explicitly refer to fixed income engagement separately from engagements in relation to other asset classes.

16.2. Please attach or provide a URL to your fixed income engagement policy document. [Optional]

16.3. Additional information [OPTIONAL]


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