This report shows public data only. Is this your organisation? If so, login here to view your full report.

Ninety One

PRI reporting framework 2020

Export Public Responses
Pdf-img

You are in Direct - Fixed Income » Outputs and outcomes

Outputs and outcomes

FI 17. Financial/ESG performance

17.1. Indicate whether your organisation measures how your incorporation of ESG analysis in fixed income has affected investment outcomes and/or performance.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
We measure whether incorporating ESG impacts portfolio risk.
We measure whether incorporating ESG impacts portfolio returns.
We measure the ESG performance/profile of portfolios (relative to the benchmark).
None of the above

17.2. Describe how your organisation measures how your incorporation of ESG analysis in fixed income has affected investment outcomes and/or ESG performance. [OPTIONAL]

We do not believe that short-term financial performance currently accurately reflects the benefits of considering ESG issues, so we do not measure it separately from other investment factors. ESG research adds value from the perspective of gaining a greater appreciation of the risks, which may materialise in the medium- to long-term and the key question is how to apply this to gain the greatest value for our clients.

SSA

For some clients we do work on providing ESG profile of their portfolios. This can include exposure to our ESG 8-factor trend scores, carbon intensity of portfolio and other metrics tailored to client requirements. It is still at an early stage and we will seek to expand and fine tune our ESG reporting over time.

17.3. Additional information.[OPTIONAL]


FI 18. Examples - ESG incorporation or engagement

18.1. Provide examples of how your incorporation of ESG analysis and/or your engagement of issuers has affected your fixed income investment outcomes during the reporting year.

ESG issue and explanation

We arranged a phone call with Grupo Mexico, the holdco for Southern Copper, a miner based in Mexico and Peru. We asked how the company had dealt with the spill from the Buenavista del Cobre; its plans for water usage and handling of complaints about water use and air pollution around the Tia Maria mine, and community relations around its mines in general.  

Impact on investment decision or performance

Gained further information. We are mindful of the company’s ongoing ESG risks, and have sold when credit spreads did not compensate for these risks, for example, in November 2019 we sold our position. 

ESG issue and explanation

We met with Adani group and Adani Transmission. We communicated our concern about the Carmichael coal project, and the company’s use of coal power in India, and how that has negatively impacted our scores on E and G for the company. We also discussed the company’s renewables projects and potential expansion into sanitation projects. 

Impact on investment decision or performance

Gained further information. We communicated that concerns about the group’s governance and environmental issues had led to investment restrictions.

ESG issue and explanation

Arranged a call with Gerdau (Brazil based steel manufacturer) where we discussed the Board of Directors composition and how greater diversification and fewer family members could improve the governance score; and how the company was managing its reporting of GHG emissions, tailing dams and follow up on the closure of the investigation on Operation Zealots.

Impact on investment decision or performance

Gained further information.

ESG issue and explanation

From a governance perspective, it was disappointing to see Turkey’s central bank governor fired by presidential decree and then nine senior and well-respected staff removed. This damages the central bank’s credibility and points to a lack of independence.

Impact on investment decision or performance

We maintain our very negative governance score, particularly on Turkey’s institutional capacity sub-score.

ESG issue and explanation

Significant acceleration of deforestation in Brazil, as made clear by satellite imagery. Brazil’s current administration has openly supported development in the Amazon, with the president challenging critics and sacking some of his own scientists.

Impact on investment decision or performance

These worrying developments led us to reduce further our land and water management ESG sub-score for Brazil.

18.2. Additional information.


Top