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ACTIAM

PRI reporting framework 2020

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You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories

08.1. Describe how you ensure that best RI practice is applied to managing your assets

Measures

          We discuss RI practices with existing investment managers periodically and seek improvements in performance. Engagement can be started to improve the manager's practices or contract could be terminated when targets are not met.
        

Measures

          It is part of our selection process. If all other factors are equal, we select the external manager with the best ESG performance.
        

08.2. Additional information. [Optional]

In 2019, 6.9% of all externally managed assets was managed by non-PRI signatories.


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          ESG Screening for newly externally managed mandate
        
Conducted by
Asset class
Scope and process

While selecting a new external manager for an Emerging Market Debt mandate, ESG research is performed on the proposed portfolio. In the current external mandates, ACTIAM has a list of sovereigns and companies which are excluded from investing. This list is the outcome of our analysis assessing whether companies/countries comply with our Investment Policies.
Nevertheless, this list may not be complete, since ACTIAM did not screen every issuer (off-benchmarks) especially within High Yield and Emerging Market Debt, meaning there could be issuers in the investment universe that do not comply with our FIP but are not on the exclusion list. This can result in a purchase by external manager of issuers in which ACTIAM does not want to invest. ACTIAM wants, therefore, to prevent external managers to purchase bonds that are violating our FIP and not in the best interest of our client. To address this issue, ACTIAM has added relevant language to the investment guidelines directed to external managers.

Outcomes

To prevent any breaches of the type, ACTIAM added language to the investment guidelines that is in line with our FIP. Managers work with a buy-list, i.e. a list with all bonds that fall within their scope for the mandate. Every quarter, this updated list is screened by the ACTIAM ESG Team. The purpose of the submission is to enable us to perform a review of the names in this list and advise whether they are compliant with our Fundamental Investment Principles, before any action of purchase is taken by external managers. During this review period the manager will refrain from buying names on that list that are either: not already owned or have not been previously approved. The outcome is a safer process in which the risk of non-compliance with our policies is reduced.

Topic or issue
          The questionnaire used for initial appointment and yearly review of external managers is reviewed by a collaboration of SAM and ESG
        
Conducted by
Asset class
Scope and process

The annual survey and assessment questions for initial contracts of external managers is reviewed by ESG research, aiming to keep up-to-date with the most important devolpments in ESG criteria and performance assessment.

Outcomes

The already advanced ESG questions are reviewed and somewhat adjusted to provide a more holistic and complete assessment of the external managers' RI practices.

Topic or issue
          Collaboration between external manager and internal engagement team, towards a more sustainable product solution for our client
        
Conducted by
Asset class
Scope and process

Our client was interested in moving to even more sustainable products. The external manager, with the support of ACTIAM ESG team, searched for a more sustainable product in Emergin Market Debt. The ESG team analysed and screened the options proposed by the external manager, advising on the most sustainable fund options, as pursued by the client.

Outcomes

The external manager was able to provide the move towards a more sustainable fund, advised by the ACTIAM's ESG Team, fullfilling the client's expectations and improving ESG performance.

09.2. Additional information.


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