This report shows public data only. Is this your organisation? If so, login here to view your full report.


PRI reporting framework 2020

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income

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.
0 Screening alone
0 Thematic alone
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied

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

We use an integration approach. The fixed interest team has found that while the financials of a company give an indication of current credit quality, other factors need to be taken into account in order to determine its sustainability. Governance considerations are important, and environmental and social considerations are starting to play a bigger role in our credit assessment process. We therefore incorporate ESG considerations as inputs into determining a borrower assessment rating. Both qualitative and quantitative measures are considered in our Moody's Risk Analyst tool. ESG considerations affect the qualitative measures used as inputs. By incorporating ESG scoring and using it as a risk-management tool, we believe we are in a better position to invest in issuers where current credit quality is more sustainable. Inclusion of ESG factors also highlights certain risks that are not traditionally considered. We now focus specifically on ESG related risk factors when we meet with management teams.

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]

(C) Implementation: Integration

FI 10. Integration overview

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

In order to determine a borrowing rating we consider the following factors:

Environmental - sustainability risks idendified, climate change, energy resource use and pollution management

Social - sustainability risks identified, general stakeholder engagement and management, product responsibility, health and safety, diversity and inclusion

Governance - incentive structures, audit practices, board expertise and independednce, transparency/disclosure, financial policy,business integrity



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


same as FI 10.1

10.3. Additional information [OPTIONAL]

Same as FI 10.1

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
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.





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


In order to determine a borrowing rating we consider the following factors:

Environmental: sustainability, climate change, energy resource and management, general management of pollution.

Social:  employee relations, consumer relations, human rights, community and stakeholder relations, product responsibility, health and safety, diversity.

Governance:  incentive structures, audity practices, board expertise and independence, transparency/disclosure, financial policy, business integrity.

12.3. Additional information.[OPTIONAL]