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SBI Funds Management Private Limited

PRI reporting framework 2020

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You are in Strategy and Governance » Objectives and strategies

Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

SBIFMPL has monthly ESG Review Meetings. In these meetings, along with ESG performance of companies under coverage, broader responsible investment strategies are also discussed. Whenever there is an opportunity for new objectives discussed in the meetings, they are added to the responsibilities of the ESG teams within the organization. Two recent examples of these are:

a) Creation of an ESG based Blacklist of companies

b) Integration of ESG lens over Fixed Income Issuers

 

These disclosures form part of Principle 6 of our Stewardship Code:

SBIFMPL shall report to its clients/beneficiaries annually on how it has fulfilled its stewardship responsibilities which includes responsible investment responsibilities:

- SBIFMPL will report on each principle of its Stewardship Code annually.

- Voting responsibilities will continue to be reported separately on a quarterly basis.

SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator 

          - Continuous engagement with investee companies with lower ESG scores
- Submitting best practice documents to investee companies that need handholding to start looking at ESG

Progress achieved

- Very active involvement with 3 out of 5 Indian companies identified under Climate Action 100+ list

- Started preparation of an ESG blacklist of companies that will not be invested in 

- Active engagement with lowest 18 scoring companies on ESG basis. Level 1 engagement with 100%, level 2 engagement with 67% of them, level 3 engagement with 40% of them

- Engaged a domestic agency to provide customised rating for 28 companies who do not report on ESG issues publicly

- Engaged the service of an international service provider for Climate Risk Reports of Investee Companies

Key performance indicator 

          Introduced ESG Integration across Fixed Income assets also along with Listed Equity

Progress achieved

Initiated discussion with Fixed Income issuers under coverage to integrate E and S issues too. SBIFMPL has already been tracking the governance initiatives

Customised questionnaire has been prepared for Fixed Income issuers on ESG parameters

 
          More active engagement with international Investors

Key performance indicator 

          Signed UNPRI’s Investor Commitment to Support a Just Transition on Climate Change and Investor Expectation Statement on Climate Change for Aerospace and Airlines Industries

Progress achieved

  • Participated in first global call for Investor Commitment to Support a Just Transition on Climate Change
  • Engaged with Aviation companies under coverage on Investor Expectation Statement on Climate Change for Aerospace and Airlines Industries

other description (2) 

          More Frequent interaction with other stakeholders like Association of Indian Industries

Key performance indicator 

          Membership in Federation of Indian Chambers of Commerce and Industry's India-UK Working Group on Green Finance and leadership in taxonomy working group

Progress achieved

- Inputs provided on Draft working paper on UK-India Cooperation on Green Finance

- Attended three meetings of the Group

- Conducted first meeting of the Taxonomy working group

Financial performance of investments

other description (1) 

          Encourage all fund managers to integrate an ESG framework and start actively engaging with companies on the basis of ESG.

Key performance indicator 

          Work on list of blacklisted companies started

Progress achieved

One company blacklisted owing to its consistent poor performance on ESG indicators and involvement in tax evasion controversy. Internal notification for Blacklisting circulated.

ESG characteristics of investments

Key performance indicator 

          Thematic funds of SBIFMPL have weighted companies based on their ESG scores

Progress achieved

Ongoing process

Other activities

Key performance indicator 

          Joining new initiatives and actively participating in them

Progress achieved

Signed UNPRI’s Investor Commitment to Support a Just Transition on Climate Change and Investor Expectation Statement on Climate Change for Aerospace and Airlines Industries

Key performance indicator 

          Prepared best practice documents for various industrial sectors and shared with companies

Progress achieved

Sent best practice documents to 40% of the lowest scoring companies identified on the basis of ESG scores. Sent/preparing best practices and customised research reports for CA100+ companies where SBIFMPL is the lead investor.

06.2. Additional information.

IMPORTANT NOTE: India's financial year follows April to March Cycle. Our annual financials will be collated in March 2020, which is coinciding with the UNPRI Submission. Because our audited financials will not be in public domain by the time we submit the report, we are providing all financial figures for FY ending March 2019 in the section Organisation Overview. For all other sections (like Strategy and Governance), we are including figures from March 2019 to March 2020. From next year onwards, we will standardise the report according to our Stewardship Reporting Requirements.
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