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SBI Funds Management Private Limited

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy


SG 01. RI policy and coverage


01.1. 責任投資アプローチをカバーする投資ポリシーを策定しているかどうかを明示してください。

01.2. ポリシーの構成要素/種類と対象範囲を示してください。


01.3. 投資ポリシーが以下のどの項目をカバーしているか明示して下さい:

01.4. 組織の投資原則および全体の投資戦略、受託者義務(または同等のもの)の解釈、ならびに、ESGファクターおよび実体経済の影響をどのように考慮に入れているかについて説明してください。

SBIFMPL's vision is to be a trusted and respected asset manager and mission is to be an ethical, responsive and innovative partner in investment solutions. Our fiduciary responsibilities towards our clients include long-term wealth creation and risk mitigation, and towards the community at large including matters of social, governance and environmental factors. As part of our fiduciary responsibility, value system and risk management strategy, it is our core belief that a business, run in best interests of all stakeholders seldom fails to create a lasting value for its investors. This responsibility can be best served, not by trying to maximise short-term profitability, but by ensuring optimisation of long-term return and risks.

Our Responsible Investment strategy is to ensure longer term wealth creation for our clients. The core areas, applicable across all asset classes are:

Integration: We include material ESG considerations within the investment decision making processes
Engagement, voting and stewardship: We fulfil our obligations as an active owner and use our influence as a major institutional investor to promote good ESG practices
Market transformation activities: We engage with various stakeholders including policy makers, regulators, industry bodies, market participants and media to create a supportive ecosystem for responsible investing

01.5. 責任投資アプローチをカバーする組織の投資ポリシーの重要な構成要素、バリエーション、例外事項を簡潔に説明してください。[任意]

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.

We have 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 our 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.

Engagement and voting at listed companies have been core RI activities at SBIFMPL. As an institutional investor that takes its fiduciary duty and stewardship obligations seriously, SBIFMPL is an active owner and considers the effective management and board oversight of ESG issues to be integral to long-term performance. SBIFMPL monitors investee assets and actively encourages good corporate governance practices and responsible corporate behaviour.


The investment team monitors and engages with the investee companies on ESG matters. Engagement can take many forms, such as sending letters to individual investee companies, participating in collaborative engagements or one-to-one meetings with the investee companies’ management team.

The aims of individual engagements can also vary, including for example:

Stewardship engagement to monitor assets and ensure appropriate ESG standards are being applied.
Relationship engagement to ensure that SBIFMPL develops a strong relationship with management, as a long-term investor.
Active engagement to encourage change in order to see material value enhancement or ESG risk reduction. Some of the issues that we focus during such dialogues are:

  • Improvement in ESG standards and disclosures
  • Importance of sustainability initiatives and transparency, with relevance to their business
  • Peer comparison and global/national positioning with respect to sectors
  • Evolving regulatory frameworks with an increased focus towards ESG

SBIFMPL undertakes all the above forms of engagement on a continuous basis and as appropriate. The engagements may be proactive or reactive. Engagements may be event driven or undertaken in response to specific opportunities such as collaborative initiatives led by other investors. SBIFMPL also prepares and provides compendiums of relevant global as well as domestic best practices to encourage learning and knowledge sharing.

Engagement priorities are determined by the investment team considering our stakes in the companies as well as their weights in various benchmark indices. For example, the engagement is much more intense with companies where the cumulative shareholdings of portfolios managed by SBIFMPL is above 3% of the company’s equity.


At SBIFMPL, we consider shareholder voting to be an important shareholder right and a valuable tool in the engagement process and endeavour to vote on all board resolutions of investee companies which are critical for protecting and enhancing the investor’s interests. While we use proxy voting advisory services from reputed service providers to help analyse company proxy materials and statements, all votes are confirmed in house by the analyst team, in discussion with the portfolio manager/s. We aim to vote in an informed and pragmatic manner, taking into consideration a company’s unique circumstances. We take into consideration any additional information we may receive from the company before making a final decision.

Public Policy & Market-wide Initiatives

At SBIFMPL, we seek to influence and address thematic, sector and market related issues that could impact the performance of its investments. We actively engage with the regulators and other stakeholders on policy advocacy matters. We also actively contribute to consultations and participate in industry debates on these topics. We also participate in various forums regarding our experience of ESG integration and the roadmap ahead as a means to share knowledge as well as create awareness.


01.6. 補足情報 [任意]

          At SBIFMPL, we do  not have a separate screenings/exclusion policy, however, our Responsible Investment policy mentions that we use exclusions of sectors for our thematic ESG based Fund.

SG 01 CC. Climate risk (Private)

SG 02. Publicly available RI policy or guidance documents


02.1. 一般に入手できる組織の投資ポリシー文書を記載してください。その文書のURLを記入し、該当文書を添付してください。











02.2. 一般に入手できる組織の投資ポリシー文書を記載してください。その文書のURLを記入し、該当文書を添付してください。









02.3. 補足情報 [任意]

The Responsible Investment Policy itself has guidelines on Environmental, Social and Corporate Governance Factors. There are no separate documents for these.

There are no Asset Specific RI Guidelines attached here as the Responsible Investment Policy is applicable to all asset classes as mentioned in responsible investment policy document on page 2.

We have a negative screening list for our ESG Fund, but there is no specific Exclusions Policy since this exclusion list may differ for different kinds of thematic funds.

ESG Governance is given in our Responsible Investment Policy and the team constituents are available on the weblink and attachment.

Reporting responsibilities are clearly elucidated in the Principle 6 of our Stewardship Code.

SG 03. Conflicts of interest

03.1. 組織として、投資プロセスにおける潜在的な利益相反を管理するポリシーを策定しているかどうかについて明示して下さい。

03.2. 投資プロセスにおける潜在的な利益相反を管理するポリシーについて説明してください。

In order to ensure the protection and primacy of client’s interests and to comply with the applicable regulations, SBIMFPL has implemented policy and procedures aimed at preventing situations involving conflict of interests and resolving such situations should they arise. SBIFMPL manages conflicts of interests as:

  • In case investments are in any group company or the investee company has substantial investments in the schemes of SBIFMPL, the Proxy Voting Committee (PVC) will review and take voting decisions in the best interest of unit holders
  • While voting for the parent of SBIFMPL or a group company no employee nominated by the parent will form part of the PVC
  • There will be a clear segregation of the voting function and sales functions
  • any services engaged with investee companies including associates, sponsor & group companies shall be selected in the best interests of the AMC/AMC’s clients
  • Persons having a potential conflict can recuse from decision making in the transaction
  • For conflicts other than Voting, the Conflict of Interest Committee will decide the course of action
  • Adequate Steps have been taken to manage internal conflicts of interests between teams and employees like Chinese walls, physical barriers, code of conduct, dealing policy, best execution policy etc.

03.3. 補足情報 [任意]

For our policy on conflict of interest, please refer to the Stewardship Code at's%20Stewardship%20Code.pdf

Other than the Stewardship code, SBIFMPL also has a separate Conflict of Interest Policy, however, it is not available in the public domain as of now. Most parts of the policy however, have been made available in the Stewardship Code.

SG 04. Identifying incidents occurring within portfolios

04.1. 組織では、投資先企業において発生するインシデントの特定と管理を行うプロセスを設定しているかどうか明示して下さい。

04.2. インシデントを管理するプロセスを説明して下さい

SBIFMPL has a multi-pronged approach of monitoring ESG incidents within investee companies. Following are the ways in which incidents are monitored:

  • Active monitoring by Financial Analysts: SBIFMPL's investment research team engages with investee companies on a day-to-day basis and monitors all kinds of developments within a company like mergers, acquisitions, controversies, new launches, employee layoffs, strikes etc. which may have a potential negative/positive impact on the company
  • Active Monitoring by ESG Analysts: The ESG analysts track companies for possible incidents/controversies with the help of news sources, google alerts, regulators' orders websites and databanks where recent court decisions are uploaded on a daily basis.
  • Controversies Scores by External ESG Rating Providers: SBIFMPL takes services of a large multi-national ESG Ratings provider that provides controversy scoring to the companies under SBIFMPL's coverage. SBIFMPL's ESG Analysts track the changes in controversy scores monthly.

Incident Response and Action by SBIFMPL:

  • SBIFMPL's analysts record and relay the information regarding any ESG incidents noted in the investee universe in periodic meetings with the team. Emails are sent across the investment team to apprise the team of the incident and its potential impact
  • The controversy scores are discussed during the monthly ESG Review Committee Meetings
  • Appropriate actions are then discussed and executed. For instance, at times, the analysts write to individual companies seeking a response to the controversy/allegation and asks for mitigation/preventive measures that may be taken by the company. In case the controversy scores persist for long and pull the ESG score below the internally agreed threshold of ESG Scores, then the company does not form part of our investment. Our Magnum ESG Equity Fund has an active example of such an exclusion despite the profitability of the stock. 

Following are the intervention mechanisms adopted by SBIFMPL:

  • Engagement: Sending letters to individual investee companies, one-to-one meetings with the management team, engagement with specific teams etc. to resolve any concerns including steps to be taken to mitigate such concerns.
  • Re-Engagement: In the event the management of the investee company fails to undertake constructive steps to resolve the concerns raised by SBIFMPL within a reasonable timeframe, the AMC shall take all reasonable steps to re-engage with the management to resolve its concerns.
  • Collaboration: The AMC shall also consider collaboration with other institutional investors, professional associations like AMFI, regulators, and any other entities it deems necessary for a collective engagement or joint representation with the investee company.
  • Escalation: In case there is no progress despite the above three steps, SBIFMPL may engage with the Board of the investee company (through a formal written communication) and elaborate on the concerns. Further, the AMC may take appropriate steps to resolve the concerns including exiting its investments.
  • Voting: SBIFMPL will vote against or abstain from voting in case the governance practices of the investee company are improper.
  • Legal Recourse: SBIFMPL may take a legal recourse against a company if deemed necessary instead of exiting its investment.
  • Blanket Bans: SBIFMPL may consider extending a blanket ban on a section of companies or create a list of black-listed companies as required if there is no engagement or improvement from the companies’ side.