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SBI Funds Management Private Limited

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes


LEI 01. Percentage of each incorporation strategy

01.1. 以下を記載してください。(1)組織でのアクティブ運用上場株式にどのESG組み入れ戦略や組み合わせを使用しているか(2)アクティブ運用している上場株式の戦略または戦略の組み合わせ別内訳

ESG組み入れ戦略 (当てはまるものをすべてお選びください)
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 5%)
98.55 %
アクティブ運用される上場株式に戦略が適用される割合 (推定 +/- 5%)
1.45 %
アクティブ運用している上場株式の合計 100%

01.2. 組織が実施しているESG組み入れアプローチ、および、特定のESG組み入れ戦略を選択している場合はその理由を説明してください。

At SBIFMPL, we integrate ESG factors into our research and investment decision making process. ESG research focuses on the critical environmental, social and governance factors which can have a material impact on the long-term sustainable performance of the company. We firmly believe companies with improved management of ESG practices, can optimise their business models thereby increasing productivity, creating a distinct competitive advantage and increasing consumers’ brand trust to deliver sustainable shareholder value. It also presents an avenue to effectively manage risks as well as take advantage of opportunities. This will not only unlock greater value for the company and its shareholders, but also contribute to the desirable social and environmental outcomes we believe in.

SBIFMPL has developed a fundamental, bottom-up investment framework to evaluate companies on ESG for its equity investments. ESG analysis is a mandatory component of our equity initiation reports. The first step involves a thorough financial analysis through SBIFMPL coverage. This is followed by an in-depth ESG analysis to determine final investment recommendations. We have a two-pronged approach for integrating ESG considerations in our equity portfolio:

Internal Framework for ESG integration: We have formulated an internal framework to score the ESG performance of every company in our coverage. Our ESG analysis is based on a Best-in-Class approach. The methodology consists of scoring companies on their ESG practices on over 40 parameters related to a firm’s disclosures on environmental, social and governance initiatives and aims at assessing its compliance as well as pro-active readiness for ESG issues on a scale of 1-100. The scores are assigned based on data available through primary and secondary sources. Material issues like carbon emissions, air emissions, waste management, water consumption, afforestation, effluent management and energy efficiency etc. are covered under the environment segment. The social aspect is assessed on the disclosures related to their relations with community, and workforce, especially with reference to diversity, wage, health and safety issues. We also have a firm belief that good governance is the key to a sustainable organisation, and therefore, we evaluate the board composition, accounting and audit quality and disclosures, anti-corruption policies etc. to assess their governance practices. Though overall ESG integration is the “best in class approach”, we also apply an exclusion methodology for certain specific funds. The framework is still evolving, and we endeavour to ensure robustness of our ESG assessment.

External Agency rating on ESG performance: We have partnered with both domestic and international service providers that rate companies on the basis of their ESG risk profiles and management initiatives. Risk profiles are determined on the basis of their business and geographic locations. The rating takes into account all environmental, social and governance issues material to the company. This provides us in depth data to assess a company’s performance year-on-year and across its sectoral peer groups. 


01.3. ESG組み入れ戦略の組み合わせを使用して資産を運用している場合、ESG戦略の組み合わせをどのように使用しているかを簡単に説明してください。 [任意]

For our thematic Fund, i.e. SBI Magnum Equity ESG Fund, we apply a combination of strategies for ESG integration:

Negative Exclusion:  In this screening, we exclude sectors that we believe are not aligned to our ESG philosophy. We exclude five sectors viz. Tobacco, Alcohol, Adult Entertainment, Controversial Weapons and Casinos. We do not invest in these sectors despite their financial profitability or positive ESG scores.

Best-in-class Approach: After screening out the negative sectors, we use our internal/external ESG scores to select and assign weights to the stocks in our portfolio.

IMPORTANT NOTE: For the purposes of every section of this report except Organisational Overview, we have considered March 2019 to March 2020 as the time period. Only in OO Module, we have reported figures from March 2019 as our audited accounts are not in public domain yet.

LEI 02. Type of ESG information used in investment decision

02.1. 組織でESG組み入れ戦略に使用しているESG情報およびこの情報の提供者を記載してください。








02.2. ブローカーに対しESG調査結果を提供するよう奨励しているかどうかについて記載してください。

02.4. 補足情報 [任意]

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

03.1. ESGへのエンゲージメントや(委任状による)議決権行使から得られる情報を投資の意思決定に利用できるプロセスが組織にあるかどうかを記載してください。

03.2. 補足情報 [任意]

ESG factors are an integral part of the decision-making process. the following steps are taken to include ESG bases analysis in investment decisions:

  • Financial analysts fill out the initiation ESG questionnaire for every company with support from ESG analysts
  • Financial analysts are marked on all communications that are sent to companies for ESG based discussions
  • Most meetings related to ESG are conducted in the presence of financial analysts responsible for the sector
  • Financial analysts are invited to monthly ESG Review meetings where score upgrades and downgrades are discussed 

A) 実施:スクリーニング

LEI 04. Types of screening applied

04.1. 組織内でアクティブ運用している上場株式に適用するスクリーニングの種類を記載し、説明してください。




SBIFMPL uses ESG based negative screening for all listed equities under our coverage. We score companies on an internal ESG based questionnaire as a process of Initiation in our universe. We have internally set thresholds to see if the companies score above por below the set benchmark. The companies scoring below the threshold are not invested in.

We also check the ESG scores of companies in our coverage on a monthly basis. We have hired services of one international and one domestic ESG ratings/service providers. Since international service providers use disclosure-based models to provide ratings, we have made a customised questionnaire with our domestic service provider in order to reach out to companies who do not publish ESG based information publicly. This serves a dual purpose of scoring them in a better manner and also encouraging them to publish this information on their periodic disclosures/website.

We also use a sector based negative screen in our SBI Magnum Equity ESG Fund along with ESG score-based screening. The idea is to first exclude sectors like Tobacco, Alcohol, Adult Entertainment, Controversial Weapons and Gambling from the list and overlay the ESG scores on top of this selection to construct the portfolio.

04.2. スクリーニング基準が変更された場合に顧客や受益者に通知する方法について説明してください。

  • We send out emails to investee companies when we make changes in our ESG questionnaire and ask them for new data points
  • We also (if needed) meet the companies in person to inform them about our new criteria

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

05.1. スクリーニングが徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを選択してください。

05.5. 補足情報 [任意]

LEI 06. Processes to ensure fund criteria are not breached

06.1. ファンドの基準に違反がないことを確認するために組織が使用しているプロセスを記載してください。

06.2. ファンドのスクリーニング基準に対する違反が判明した場合、これらの違反を是正するために従うプロセスを説明してください。

At SBIFMPL, we screen the investment universe for applied negative and positive screeners at the time of investing and at the end of every month to ensure the portfolio meets the specific criteria laid out.

The risk department acts as an independent internal audit. It screens the portfolio against the specific negative and positive criteria laid out and checks for breaches. Breaches can be at the time of initial investment or subsequent to the investment. At the time of investment, the breach is rectified within 30 days by selling the position. Post investment the cause of the breach is first analysed. The breach could have  occurred due to a change in the scoring criteria by the external agencies or an event occurring which has changed the score of the company. The process is to have an interaction with the investee company to understand the causes and any remedial action being taken as well as future mitigation strategies. Depending on the severity of the issues and the company response, portfolio action is determined.

All regulatory limits have zero tolerance and hence very stringent controls have been put in place to ensure compliance with the same. We have following two levels of control to check all limits pertaining to the investments made:

  1. Ex-ante control – Regulatory limits defined by SEBI and SID asset allocation limits are incorporated as hard limits in the front office system as a control to pre-empt the risk of a regulatory limit breach. There is a corresponding alert level defined for every regulatory hard limit. Some of the internal limits are also defined in the front office system as soft limits.
  2. Ex-post control – A second level control is exercised by the risk management team daily through the limit breach reports generated from the front office application.

Breaches, if any are flagged off as per the defined Breach escalation process laid down in the approved documented Risk Policy of the company.


06.3. 補足情報 [任意]

C) 実施: 統合

LEI 08. Review ESG issues while researching companies/sectors

08.1. E・S・Gの各要因が投資分析の一環として体系的に調査されている、アクティブ運用の上場株式ポートフォリオの割合を記載してください。








08.2. 補足情報 [任意]

100% of our investment universe is analysed for ESG based assessment.

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

09.1. ESG統合が徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを記載してください。

09.4. ESG統合戦略に使われる組織内調査を見直す頻度を示してください。

09.5. ポートフォリオ・マネージャーがどのようにしてESG情報を保有し、使っているのか説明してください。

09.6. 補足情報 [任意]

LEI 10. Aspects of analysis ESG information is integrated into


10.1. 投資分析のどの側面にESG情報を統合しているかを記載してください。




10.6. 補足情報 [任意]