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Fort Washington Investment Advisors, Inc

PRI reporting framework 2020

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (C) Implementation: Integration

(C) Implementation: Integration

FI 10. Integration overview

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

Fort Washington believes that credit analysis is a core competency. Our credit research process is driven by bottom-up, fundamental research, supplemented with quantitative tools, with ESG factors being an integral part of the process. Credit analysts are responsible for fundamental research, performance, and being apprised of ESG related factors impacting securities in their sectors. For example, if an analyst uncovers an ESG issue that could impact a company’s ability to service its debt, the analyst would most likely refrain from recommending the credit for purchase, or, if currently owned, would recommend selling the bond. We currently do not restrict purchases based solely on ESG factors. In the event a CCC issuer is held, the covering analyst is required to create a memo explaining why holding the investment is in the best interest of the client.

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

Corporate (financial)

Fort Washington believes that credit analysis is a core competency. Our credit research process is driven by bottom-up, fundamental research, supplemented with quantitative tools, with ESG factors being an integral part of the process. Credit analysts are responsible for fundamental research, performance, and being apprised of ESG related factors impacting securities in their sectors. For example, if an analyst uncovers an ESG issue that could impact a company’s ability to service its debt, the analyst would most likely refrain from recommending the credit for purchase, or, if currently owned, would recommend selling the bond. We currently do not restrict purchases based solely on ESG factors. In the event a CCC issuer is held, the covering analyst is required to create a memo explaining why holding the investment is in the best interest of the client.

Corporate (non-financial)

Fort Washington believes that credit analysis is a core competency. Our credit research process is driven by bottom-up, fundamental research, supplemented with quantitative tools, with ESG factors being an integral part of the process. Credit analysts are responsible for fundamental research, performance, and being apprised of ESG related factors impacting securities in their sectors. For example, if an analyst uncovers an ESG issue that could impact a company’s ability to service its debt, the analyst would most likely refrain from recommending the credit for purchase, or, if currently owned, would recommend selling the bond. We currently do not restrict purchases based solely on ESG factors. In the event a CCC issuer is held, the covering analyst is required to create a memo explaining why holding the investment is in the best interest of the client.

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
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]

ESG factors are integrated into regular investment analysis in the selection and monitoring processes. Analysts utilize multiple tools to research their investments. ESG factors are used as part of the core set of models and due diligence processes to determine portfolio eligibility. On a monthly basis, MSCI reporting is created for each strategy that outlines the portfolio, segment and security level ESG scores. If a security has a rating of CCC, the analyst is required to write an internal memo indicated why holding that investment is in the best interest of meeting the client's goals.


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
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.

Corporate (financial)

ESG factors are integrated into regular investment analysis in the selection and monitoring processes. Analysts utilize multiple tools to research their investments. ESG factors are used as part of the core set of models and due diligence processes to determine portfolio eligibility.

On a monthly basis, MSCI reporting is created for each strategy that outlines the portfolio, segment, and security level ESG scores. If a security has a rating of CCC, the analyst is required to write an internal memo indicating why holding that investment is in the best interest of the client.

Corporate (non-financial)

ESG factors are integrated into regular investment analysis in the selection and monitoring processes. Analysts utilize multiple tools to research their investments. ESG factors are used as part of the core set of models and due diligence processes to determine portfolio eligibility.

On a monthly basis, MSCI reporting is created for each strategy that outlines the portfolio, segment, and security level ESG scores. If a security has a rating of CCC, the analyst is required to write an internal memo indicating why holding that investment is in the best interest of the client.

12.3. Additional information.[OPTIONAL]


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