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Česká spořitelna – penzijní společnost, a.s.

PRI reporting framework 2020

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ESG incorporation in actively managed fixed income

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
SSA
90 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
10 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
40 Screening alone
10 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
50 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
40 Screening alone
10 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
50 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

We have screeningin traditionally managed funds, where criteria like banned weapons or tabacco are incorporated. For responsible fund we use a broad holistic RI investment approach including screening, thematic and integration strategies. The combination of minimum standards, positive and negative criteria, exclusion criteria, best-in-class approach (selection of the best companies in each sector), active engagement and voting process (dialogue with companies, exercise of voting rights) plus the rigourous review of finanicial performance objectifies the management approach.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

We combine external ESG research data with internal screening and scoring including criteriology screening, positive screening and norms-based screening for financial and non-financial corporate issuers as well as for SSAs and securitised issuers.

04.3. Additional information. [Optional]


FI 05. Examples of ESG factors in screening process (Private)


FI 06. Screening - ensuring criteria are met

06.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

06.2. Additional information. [Optional]


(B) Implementation: Thematic

FI 07. Thematic investing - overview (Private)


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..

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

We require the reporting duties as necessary condition for investment. If it is not fulfilled we do not invest or we divest. 

08.3. Additional information. [Optional]


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]


(C) Implementation: Integration

FI 10. Integration overview

10.1. Describe your approach to integrating ESG into traditional financial analysis.

ESG research and valuation are one step ahead of traditional financial analysis that we take internally in cooperation wirth ERSTE Asset management. We valuate each issuer with its environmental, social and governance score combining external research and internal analysis. Having these inputs each issuer receives an EAM ESG score and furthermore lead to an inclusion or exclusion in our ESG investment universe. Based on this data traditional financial analysis that combines bottom-up and top-down research is conducted. The combination of minimum standards, positive and negative criteria, exclusion criteria, best-in-class approach (selection of the best companies in each sector), active engagement and voting process (dialogue with companies, exercise of voting rights) plus the rigourous review of finanicial performance objectifies the management approach.

10.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

SSA

Approach is similar for all types of fixed income. For sovereign, supra-national and agency issuers the ESG valuation is also an upstreamed step in the investment process with emphasis on exclusion criteria like death penalty, human rights, corruption or nucler weapons.

Corporate (financial)

Approach is similar for all types of fixed income.

Corporate (non-financial)

Approach is similar for all types of fixed income.

10.3. Additional information [OPTIONAL]


FI 11. Integration - ESG information in investment processes

11.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
ESG analysis is integrated into fundamental analysis
ESG analysis is used to adjust the internal credit assessments of issuers.
ESG analysis is used to adjust forecasted financials and future cash flow estimates.
ESG analysis impacts the ranking of an issuer relative to a chosen peer group.
An issuer`s ESG bond spreads and its relative value versus its sector peers are analysed to find out if all risks are priced in.
The impact of ESG analysis on bonds of an issuer with different durations/maturities are analysed.
Sensitivity analysis and scenario analysis are applied to valuation models to compare the difference between base-case and ESG-integrated security valuation.
ESG analysis is integrated into portfolio weighting decisions.
Companies, sectors, countries and currency and monitored for changes in ESG exposure and for breaches of risk limits.
The ESG profile of portfolios is examined for securities with high ESG risks and assessed relative to the ESG profile of a benchmark.
Other, specify in Additional Information

11.2. Additional information [OPTIONAL]


FI 12. Integration - E,S and G issues reviewed

12.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
SSA

Environmental

Social

Governance

Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

12.2. Please provide more detail on how you review E, S and/or G factors in your integration process.

SSA

ESG factors and ratings are an essential part of the screening before an investment decision and lasting during the whole live of investment. It is valid for all fixed income asset classes.

Corporate (financial)

ESG factors and ratings are an essential part of the screening before an investment decision and lasting during the whole live of investment.It is valid for all fixed income asset classes.

Corporate (non-financial)

ESG factors and ratings are an essential part of the screening before an investment decision and lasting during the whole live of investment. It is valid for all fixed income asset classes.

12.3. Additional information.[OPTIONAL]


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