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ACTIAM

PRI reporting framework 2020

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (B) Implementation: Thematic

(B) Implementation: Thematic

FI 07. Thematic investing - overview

07.1. Indicate what proportion of your thematic investments are (totalling up to 100%):

73 %
7 %
20 %

07.2. Describe your organisation’s approach to thematic fixed income investing

A combination of environmental and social themes is applied to our actively managed strategies, i.e. climate change, water, and land. ACTIAM identifies companies that contribute negatively and positively to these themes. The negative contributors are excluded from investment in the actively managed fund; the positive contributors receive an upgrade in their ACTIAM ESG score, thereby increasing the likelihood of being selected for investment.
ACTIAM has a specific policy for green, social and sustainable bonds. This policy requires bonds to be issued according to the Green Bond Principles, as well as a set of criteria for the use of proceeds, reporting and the ambitiousness and achievability of the projects and targets. The policy includes a blacklist of activities that we do not finance through sustainable bonds. Social or environmental impact needs to be measured through credible indicators, such as CO2 reduction, avoided CO2, health care equipment built, or units of affordable housing created. ACTIAM wants to prevent the locking in of money in less ambitious projects. As part of our Sustainable Investment policy, we use green bonds to stimulate socially and environmentally impactful activities. Bonds that are labelled 'green' by the in-house ESG team receive an ACTIAM ESG score of 75, 85 or 100. The score depends on the level of positive impact and whether the bond meets the ACTIAM future proof business test. For more, see: https://www.actiam.com/en/SysSiteAssets/4_verantwoord/documenten/en/esg-integration-in-green-and-social-bonds_assessment-proces.pdf

07.3. Additional information [OPTIONAL]


FI 08. Thematic investing - themed bond processes

08.1. Indicate whether you encourage transparency and disclosure relating to the issuance of themed bonds as per the Green Bonds Principles, Social Bond Principles, or Sustainability Bond Guidelines..

          Asking issuers to formulate/disclose targets (as CO2 reduction targets); encouraging issuers to issue green, social, sustainability bonds; also engaging on progress of sustainability performance
        

08.2. Describe the actions you take when issuers do not disburse bond proceeds as described in the offering documents.

ACTIAM's pre-assessment of every green/social/sustainable bond aims to prevent investment in non-credible issuances. We also consider whether the issuer makes real efforts, for example, towards an energy transition and more sustainability, in order to avoid green washing. The bond needs to meet the criteria of ACTIAM's green bond policy at the minimum. These criteria go beyond GBP or CBI principles. If this is not the case, the bond will not be registered as a green bond in ACTIAM's system, thereby decreasing the likelihood that this bond will be bought - if the bond is still bought.

Cases where disbursement is different than initial commitment, or asset reallocation occuring during holding period, will be reviewed by the ESG Team and the actual practice is assessed. A downgrade of ESG Score or loss of the ACTIAM green stamp can be applied in case we believe the allocation is less ambitious or not compatible at all with our standards. Both adjustments impact the decision-making by portfolio managers, since these must keep the portfolios ESG Score equal or above the benchmark.

08.3. Additional information. [Optional]

Portfolio Managers and ESG Analysts often attend Green, Social and Sustainable bonds roadshows, and also hold one-on-one meetings with issuers and banks. During such meetings, ACTIAM focus in discussing the whole bond framework, use of proceeds, strategy and ambitions of the issuer as a whole. The final decision of the internal 'Green Bond' mark and the ACTIAM ESG Score is a responsibility of the ESG team. 


FI 09. Thematic investing - assessing impact

09.1. Indicate how you assess the environmental or social impact of your thematic investments.

09.2. Additional information. [Optional]

Part of our green and social bond policy is that issuers need to report at least annually. These requirements are different for the other thematic bonds, as they are excluded or upgraded based on the analysis of the issuer, not the bond. We track progress on the (reporting) targets and impact of the projects/activities that are financed.

For our focus themes climate, water and land we have set long term targets. Twice a year we measure the progress on water and climate and we report on this. We have an independent audit conducted on the carbon and water footprint of our FI (and equities) investment funds.


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