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First Sentier Investors (including First State Investments)

PRI reporting framework 2020

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Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          Global Stewardship Policy (Principles)
        

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

We recognise our significant responsibilities as stewards of our clients’ assets. These include our role in maintaining the integrity and quality of the markets in which we operate, the allocation of investment capital to productive purposes, and the use of sound judgement and detailed analysis to make investment decisions which protect and enhance our clients’ capital over the long term. Our approach to stewardship and, in particular, to the ownership obligations which arise from individual investments made and held on behalf of our clients, rests upon these fundamental objectives.

We interpret our fiduciary duty to include assessment of ESG, and climate-related risk with regard to investment decision making, and also to manage those risks in line with our responsibilities as stewards of our client's capital.

Actively monitoring and engaging with company management and diligently executing our ownership obligations are central to our approach to the stewardship of our clients’ capital. In managing our clients’ assets through our investment strategies, the integration of environmental, social and governance factors is embedded into our investment processes. We believe that this enhances the quality of our investment processes and will therefore deliver long term benefits to our clients. 

 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

The key elements of our investment policies covering responsible investment are captured in our:

  • Global Stewardship Principles
  • Guidelines and principles for corporate engagement on governance, environmental and social issues; and

  • Policy on cluster munitions and anti-personnel mines

  • Policy on cigarettes and tobacco related products 

Our unlisted infrastructure team have asset class specific guidelines which are designed for this particular illiquid asset class.  

01.6. Additional information [Optional].

          Further information and policies can be found on our public website
https://www.firststateinvestments.com/global/responsible-investment/responsible-investment-reports-and-policies.html
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

We understand Climate Change will impact different assets in different ways, both in relation to their contribution to climate change in the form of greenhouse gas emissions, but also their exposure to changes occurring in the physical environment, this is taken into account in investment decisions. Climate change considerations have been incorporated into the organisational and investment governance structures. Climate change and Stranded Assets working groups have been set up with a reach across all investment teams to put additional focus on these specific areas of risk and opportunity.

Management of climate change related risk is incorporated into our broader responsible investment strategy. The governance structures and strategy we have in place have been designed so that they are flexible enough to cater to the needs of our diverse organisation while remaining clear and practical. Given the diversity of our investment capabilities and consequently the range of risks and opportunities posed by climate change, we believe this integrated approach is more effective than a stand-alone strategy.

With climate change as a key consideration in the investment process, our active managers look to invest in companies that are actively taking steps to solve the climate change problem, or at least recognise and are adapting to the risks and opportunities posed by it.

Reports and policies can be found on the following URL: https://www.firststateinvestments.com/global/responsible-investment/responsible-investment-reports-and-policies.html. Our Climate Change Statement is available at the following URL:https://www.firststateinvestments.com/global/responsible-investment/responsible-investment-and-climate-change.html.  Each investment team has also provided a climate change statement in their team profile on this website so that the way they consider climate change and related issues for their specific investment strategies is clear to clients and other stakeholders. 

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

In general, our investment teams take a long term approach to risk, often maintaining an interest in an investee company or country for over a decade, therefore the consideration of very long term (>10 year) risks is integral to our investment process.

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

Climate change has been considered and incorporated as an investment risk, including in relation to product strategy. 

As a strategic response in 2015, a Climate Change working group was formed (joining the existing Stranded Assets Working Group) as a sub group of the Global ESG Committee. The group was charged with developing guidance for all investment teams on the integration and management of climate change risks and opportunities. The output has been integrated into organisation-wide governance structures and broader responsible investment strategy. Given the diversity of our investment capabilities and consequently the range of risks and opportunities posed by climate change, we believe this integrated approach is more effective than a stand-alone strategy. The key elements of our Responsible Investment Strategy which are directly related to climate change are:

  • Integration of carbon and other climate related data into our systems and reporting processes including portfolio assessments for climate change risks.
  • Actively engaging with our clients to ensure we can anticipate and meet their needs now and into the future.
  • Including climate change as part of our training program for example by inviting in external experts to present and engage with our investment teams.
  • Improved disclosure of climate change as a material business and investment issue.
  • Continued support of the IGCC and other industry bodies who are working on climate change.

Climate change, and in particular the carbon exposure of portfolios, was raised at the Global Investment Committee in March 2016. In December 2016 we appointed MCSI to provide carbon and related data which we are now regularly reporting to the committee and also publicly. The Global Investment Committee is responsible for monitoring the risk and performance of all investment capabilities across our global business and meets quarterly. The committee is chaired by the CEO and includes the Chief Investment officers of each asset class and the Global Head of RI.

We have prepared our climate change disclosures to align as much as practicable with the TCFD and The Global Investor Coalition on Climate Change - Guide to Investor Disclosure.

In addition each investment team is required to provide a climate change statement in their team profile on our public website so that the way they consider climate related risk in their specific investment strategies is clear to clients and other stakeholders.

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

specify

          Company website: https://www.firststateinvestments.com/global/responsible-investment/responsible-investment-and-climate-change.html
        

SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

All of our policies can be accesses on our website at:

https://www.firststateinvestments.com/global/responsible-investment/responsible-investment-reports-and-policies.html

We report annually on our progress and the approach taken to RI by our investment teams:

 

https://www.firststateinvestments.com/global/responsible-investment/responsible-investment.html

Detailed information on individual investment teams can also be found in both our RI Report and on our website: 

https://www.firststateinvestments.com/global.html

 

 


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Conflicts of interest may arise from time to time in the course of our business activities. At all times the interests of our clients are put first and we are committed to implementing the highest standards of governance and control. In recognition of this, FSI maintains and implements a conflicts of interest policy.

Our conflicts of interest policy sets out how FSI define, record, monitor, escalate and resolve potential conflicts. Our conflicts of interest statement is available on our website:

https://www.firststateinvestments.com/about-us-files/CFSGAM-FSI-Conflicts-of-Interest-Statement.pdf

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

All investment teams have access to the Reprisk controversy monitoring service. Watch lists for each team are created with our latest holdings information and made available to the teams.

The RI Team has access to all watch lists and monitors the service. In addition ESG risks reporting is provided to the Global Investment Committee which includes information on incidents.


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