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First Sentier Investors (including First State Investments)

PRI reporting framework 2020

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ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe We have trialled and continue to support the Cambridge ILG Impact Framework which models a portfolios 3 environmental and 3 social impacts which can be mapped back to the SDG’s.
Describe We have started to test climate scenario analysis vendors and have completed a test review of one portfolio. We have trialled and continue to support the Cambridge ILG Impact Framework which includes climate stability as a future portfolio impact.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

          ESG issues are considered in all active management processes
        

13.3. Additional information. [OPTIONAL]

 

 


SG 13 CC.

13.4 CC. Describe how your organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, its results, and any future plans.

Describe

We are reviewing scenario analysis vendors and have completed a test of one portfolio and are awaiting results of asessments on 2 further equity portfolios.

Describe

Scenario analysis will be reviewed annually as part of our investment risk assurance activities with oversight from the Global Investment Committee.  This will become a formal part of the businesses governance and oversight process.

Describe

This work will feed directly into our engagement with companies.

13.5 CC. Indicate who uses this analysis.

13.6 CC. Indicate whether your organisation has evaluated the potential impact of climate-related risks, beyond the investment time horizon, on its investment strategy.

Please explain the rationale

Individual teams are each responsible for their own investment strategies. At a company level, guidance is provided by the RI team, but no overarching evaluation of climate-related risk beyond the investment time horizon has been completed.

For most of the active management teams, risks and opportunities are considered at asset level over an extended time horizon, typically ten years or more.

 

13.7 CC. Indicate whether a range of climate scenarios is used.

13.8 CC. Indicate the climate scenarios your organisation uses.

Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other

Other (1) please specify:

          2 degrees C
        
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

other description (1)

          Systematic tax avoidance, long term impacts of plastic pollution
        

other description (2)

          Transition and rates of change to a low carbon economy in the listed infrastructure sectors
        

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

other description

          Company engagement.
Climate change working group and internal investment team guidance.
        

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

MSCI is our carbon data provider. We have also 2 degree investing initiatives assessment for one portfolio and intend to roll it out for more in the near future.  The ILG Impact Framework includes a portfolio asssssment of Climate Stability.

14.5. Additional information [Optional]

Information on approach to climate change is provided in our RI Report: http://ri.firststateinvestments.com/our-approach/featured-content/climate-change/

Information on our views regarding the limitations of carbon footprinting methodologies is provided in our RI Report: http://ri.firststateinvestments.com/2016/improving-our-climate-risk-reporting.htm

Investment team specific statements and footprints are available in our RI report: https://www.firststateinvestments.com/uk/en/intermediary/about-us/responsible-investment/responsible-investment-reports-and-policies.html


SG 14 CC.

14.6 CC. Provide further details on the key metric(s) used to assess climate-related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Weighted average carbon intensity
          Risk assessment, governance
        
          CO2e / $M revenue
        
          Weighted average
        
Carbon footprint (scope 1 and 2)
          Risk assessment, engagement opportunity
        
          
        
          
        
Portfolio carbon footprint
          Risk assessment, engagement
        
          
        
          
        
Total carbon emissions
          Risk assessment, engagement
        
          
        
          
        
Carbon intensity
          Risk assessment, engagement opportunity identification.
        
          CO2e / $M revenue
        
          
        
Exposure to carbon-related assets
          Risk assessment
        
          Av number of fossil fuel co per portfolio
        
          
        
Other emissions metrics
          Risk assessment, engagement opportunity identification.
        
          
        
          
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risk management processes used for identifying, assessing and managing climate-related risks.

Please describe

Climate risk exposures are reported to our Global Investment Committee (investment assurance)

14.9 CC. Indicate whether your organisation, and/or external investment manager or service providers acting on your behalf, undertake active ownership activities to encourage TCFD adoption.

Please describe

Individual teams inlcuding the unlisted infrastructure team encourage TCFD adoption through direct company engagement and governance activity. 


SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

10.4 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

5 Percentage of AUM (+/-5%) per asset class invested in the area
10 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

A number of our listed equities teams (including but not limited to the Global Listed Infrastructure team and Stewart Investors) as well as our direct infrastructure team, invest in companies that derive revenue from renewable energy infrastructure and supporting products and services.

Asset class invested

5 Percentage of AUM (+/-5%) per asset class invested in the area
5 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Our Unlisted Infrastructure team owns Anglian Water in the UK along with water utility and technology assets in Australia.   Equity teams have exposure to a range of water utilities and technology companies.

          Our Stewart Investors team offers a range of sustainability funds with a focus on sustainable development as a key driver of long term investment performance.
        

Asset class invested

15 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Our Stewart Investors team offers a range of sustainability funds with a focus on sustainable development as a key driver of long term investment performance.

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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