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PRI reporting framework 2020

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

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]