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J.P. Morgan Asset Management

PRI reporting framework 2020

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (C) Implementation: Integration of ESG factors

(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

We have been working towards the objective of ensuring systematic integration of ESG factors into our various investment processes wherever possible. As at December 2019, we now have some 354 strategies across all asset classes which are fully integrated, representing USD1.3 Trillion of our long-term assets under management. Of these, 205 strategies/USD234bn relate to Listed Equities, representing some 85% of our Global Equities strategies. We continue to work towards our stated goal of 100% ESG integration in all of our in-scope strategies and asset classes by the end of Q1 2020.


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

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

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information. [Optional]

The portfolio managers use a variety of ESG inputs in their decision making process. Our ESG score (combined checklist plus quant score) is available to all teams across equities and is a direct input into the Behavioural Finance ESG funds such as European and Global sustainable strategies). Beyond this, the use of ESG varies by investment type.

Approximately USD300bn AUM is managed by fundamental research processes. ESG checklists have been completed for all investible stocks in this universe (2400 stocks) and we have either implemented or are implementing Strategic Classifications, which are an analyst judgement on the quality of a business, including ESG. Previously about half of the funds used Strategic Classifications and half used ESG outliers process - a process where the central Investment Stewardship team vetted all stocks for ESG quality.

The Behavioural Finance processes rely on the quantitatively derived ESG score (checklist and/or quant score) for assessing the ESG quality of their potential investments, although only a small portion of funds is directly run this way.

On top of formal investment processes, we also record all ESG engagements in the Spectrum database; all investment teams regularly review these as part of their investment decision making process.


LEI 10. Aspects of analysis ESG information is integrated into (Private)


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