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Santander Pensiones, Entidad Gestora de Fondos de Pensiones, S.A. (Delisted)

PRI reporting framework 2020

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ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
100 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.

We follow Grupo Santander's Defence Policy in all of our investment products. This is a list of listed companies which are excluded from our portfolios due to its relation with the production or distribution of controversial weapons. Thus, this is the first line of action of our Responsible Investment approach.

In addition, the SRI policy defines SAM’s ESG assessment, which takes into account different components:

  • A valuation analysis where the behaviour of issuers is assessed in relation to different environmental, social and governance factors. For this assessment, SAM uses the information provided by external data providers, incorporating it into its own valuation methodology. This methodology is designed by the SRI team and based on market references and the main international frameworks and standards resulting in an ESG rating of each issuer.
  • Exclusions based on the nature of the activities carried out by the issuers or on the identification of risks through the monitoring of possible controversial issues. The exclusions are based on the policies of Santander Group, which apply to different sensitive sectors. In addition, other exclusions are applied for non-compliance with regulations or are related to specific SRI products conditions.

The ESG assessment of companies is composed of general analysis criteria - common to all sectors - and specific criteria - depending on the sector and activity - covering all relevant ESG aspects related to the essential thematic areas for an environmental, social and good governance analysis (e.g. Climate change, Natural resources, Human Capital, Labour Rights, Corporate Governance, Business Ethics, etc.)

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]


LEI 02. Type of ESG information used in investment decision (Private)


LEI 03. Information from engagement and/or voting used in investment decision-making (Private)


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

We exclude companies taking into account activity or product criteria.

We exclude all companies forbidden by Santander Group’s Defence Policy.

Additional exclusionary criteria that can be taken into account in the products are:

  • Controversial activities or products : tobacco, gambling, pornography, alcohol, etc.

Screened by

Description

We use ESG information from an external data provider and assess companies with our in-house methodology, which have a sectorial approach. We obtain a final ESG rating for each company.

Screened by

Description

Controversies or not compliance with international norms related to human rights, labour rights, etc.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

Screening criteria is established by the SRI team based on the Responsible Investing approach depicted in the SRI policy. The review of the criteria in our investment process is performed on an ad-hoc basis.

We notify changes to clients and/or beneficiaries during the control commissions’s sessions (governance body of the pension funds) where Santander Pensiones participates.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

          Exclusion list sent regularly to fund managers and compliance to avoid investment in these companies
        

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

We update our records from third party ESG information every 4 months. Nevertheless, in 2020 this frequency will be higher (monthly).


LEI 06. Processes to ensure fund criteria are not breached (Private)


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